The State of Waste 2014
Where are we today, and what will be game changing in resource recovery?
First, the facts. Australia generates 48 MT/year of waste (latest National Waste Data Report 2014).
Despite steady increases in the rate of recovery (average 52%), the waste generated between 2002 and 2009 grew by 40%, while population increased by only 10% (SoE Report NSW, 2013). There are more of us and we are generating more waste each year per person.
Offsetting the increased generation of waste, most States are now seeing recycling growing at a rate fast enough to start reducing total tonnages of waste to landfill.
The significant exception to this is QLD, where the government lowered the costs of landfill by removing the $35/t landfill levy. Since doing so, there has been a 20% reduction in recycling (and loss of jobs) as waste tonnes flood back into artificially cheap landfill.
It has also seen 400,000 tonnes of waste being transported from Sydney to Brisbane to take advantage of the cheap disposal. That is an additional 10,000 truck movements per year on the Pacific Highway, in each direction! The sooner the QLD government catches up with the rest of Australia, the better.
Landfill in south east Queensland is now the cheapest in Australia at less than $30/t and as low as $10 per tonne, since the QLD government removed the landfill levy. If you can landfill for $10/t, why bother recycling? Rational business owners make rational decisions.
The really good news is that the growth in recycling in all the other states is creating new recycling jobs. Recycling jobs are largely recession proof, green collar jobs. Recycling is one of the only growth areas in the manufacturing sector in Australia. We create nine jobs in recycling for every job in landfill.
Given the job creation potential of recycling, why does landfill continue to be the de facto method of waste disposal for 50% of what we generate? First and foremost – cost. Landfill is cheap. Most landfills were inherited from past generations and most still don’t include the cost of replacement in their pricing.
Many landfills still do not make provisions for future liabilities such as 40 year monitoring, rehabilitation and gas management. The Productivity Commission (2006) rightly stated that all landfills should price in the full costs of operation and externalities. Most private landfills do, many Council landfills do not.
Unfortunately even some consultants still price landfills as free assets. One recent study advised a council that their cost of landfilling was only $23/t. On proper review and inclusion of post closure costs, asset replacement and more the cost jumped to over $150/t.
Increasing landfill prices via levies (to reflect their true environmental and financial cost) is starting to have an effect. Sydney landfill prices crossed the $300 per tonne threshold in 2012 and combined with new grant funding, is seeding a renaissance in recycling job creation and new infrastructure development.
It is important to note that landfill levies are avoidable. If you don’t want to pay the levy – recycle. It only applies to waste put in the hole. As such we have seen landfill operators being one of the main beneficiaries of levies.
They charge for the levy at the gate house and then use the levy as an effective subsidy for their recycling and diversion activities and only send the residual to the actual landfill. Only that residual attracts the levy.
Landfill price rises are driving reform in all waste streams.
In the local government sector, key reforms include the implementation of a third “green” bin for household garden and food waste and new 360 litre recycling bins for those households who fill their yellow top recycling bin each fortnight. (About 17% of households fill their recycling bin to capacity each fortnight and 30% of all recyclables are still incorrectly placed in the wrong bin and go to landfill).
Many councils are also contracting “Alternative Waste Technologies” to recover recyclables and organics for compost or digestion and only dispose of the unrecoverable fraction. Minor streams such as mattresses, polystyrene and e-waste are now also getting attention.
Commercial waste remains a key challenge, with many businesses having either no recycling or just paper plus cardboard and metals. Landfill pricing provides a key incentive for more on-site recycling because economically rational business owners weigh up the labour costs of sorting materials against the costs of landfilling. Cheaper landfill equals lower recycling rates and vice versa.
A move to weight based charging for C+I front and rear lift waste will provide a key circuit breaker for business owners. At present most waste bins are charged by volume not by weight. So a business can pay as much for a skip filled with polystyrene, as another with half a tonne of rubble. New weighing systems now permit legal trade based on weights. Weight based charging will provide a direct price signal to business managers and will be the biggest single reform in the commercial waste sector for decades.
Building new “C+I dirty MRF’s” to recover recyclables from mixed business waste is also a real game changer. We have a few small plants in Australia not nearly enough. The rise in landfill levies combined with new Government infrastructure grants, is now making large scale sorting plants commercially viable for the first time.
Another emerging trend, again driven by landfill costs, grants and new State policies, is the rise of Energy from Waste (EfW) proposals. EfW is standard practice in Europe and Asia. Best practice EfW includes gasification, pyrolysis, plasma arc and incineration and variations on those themes.
Recently, both the NSW, Vic and WA EPA’s have given the green light to EfW, on the proviso the material treated has first been processed to recover recyclables. Such plants must also meet best practice air emission standards and must be used for energy generation, not just waste disposal.
The final piece of the waste puzzle is the C+D sector, which generates 40% of Australia’s total waste. This sector has the highest recovery rates, because the materials it processes can be more homogenous (timber, metal, concrete), costly to dispose of (and as such responsive to levies), and can be sold in large volumes back into robust construction markets. Much of the residual C+D stream wastes lend themselves to an EfW solution as well.
Role of Government
It is perfectly legitimate for governments to take different positions on the “recovery spectrum” extending from low cost landfills and low recycling rates, through to higher recycling rates and generally higher cost landfill (so long as all environmental externalities and risks are covered).
The role of government is to clearly articulate where on that spectrum they intend to sit and then to develop the appropriate policy settings and funding arrangements to make it happen. It is the function of government to weigh the competing interests of resources, sustainability and cost. The industry is there to assist and invest where it can, once the direction is set.
Setting clear goals and ambitions is the most important thing government can do. It is therefore pleasing to see many governments at the National, State and local level taking a new interest in waste.
Community engagement is a key aspect of such decisions. MRA has worked with governments around Australia to create realistic pricing and funding systems which maximise resource recovery while increasing community engagement and consent.
In our experience most communities support higher recycling rates and higher landfill prices driven by levies, so long as the levy revenues are hypothecated to better environmental outcomes. No-one likes paying taxes but if we have to, better they be progressive taxes and send the right market signals, than the wrong ones.
Better that we tax pollution and improve recycling, than tax payrolls and increase unemployment.