The State of Waste 2013
The Australian waste industry is a rapidly changing space, with surging waste volumes and new government policies creating both opportunities and challenges.
Improving the efficiency of collection, transport and recovery of waste and recyclables is critical to maximising resource recovery, a critical factor in the environmental footprint of our economy.
But waste generation has been growing at a historic average of 4-7% per year and still is. That means the volume of waste the industry has to process is doubling every ten to eighteen years. Recycling rates have improved, averaging approximately 50% across the country, but generally, recycling is not increasing fast enough to drive down waste to landfill.
The good news is that we are recycling a lot more and generating recycling jobs which are largely recession proof, green collar jobs. Recycling is probably the only growth area in the manufacturing sector in Australia. Recycling generates 3 jobs to every 1 landfill job.
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 has always been relatively cheap and in most States continues to be so. Many landfills still do not make provisions for future liabilities such as 40 year monitoring, rehabilitation and gas management. Few landfills make provision for void replacement. The Productivity Commission (2006) rightly stated that all landfills should price in the full costs of operation and externalities. Some private landfills and large Council landfills are doing this, and in itself that creates a market distortion between those who do and those that don’t.
Most State Governments are increasing landfill prices via levies, to reflect the true environmental and financial costs of landfill. While there is a vigorous debate about how much of this is, and should be, hypothecated back to supporting recycling, the levies themselves do have an effect on behaviour.
It is important to note that landfill levies only apply to waste put in the ‘hole’. As such landfill operators are one of the main beneficiaries of levies. They use the levy as a partial subsidy for recycling, by charging the levy at the weighbridge but recycling the waste so that it does not go into the hole.
Councils are responding to landfill price signals and also to growing landfill scarcity. Key reforms include the implementation of a third “green” bin for household garden and food waste, AWT processing and optional 360 litre recycling bins to reduce the one third of recyclables lost to the garbage bin. Minor streams such as mattresses, polystyrene and e-waste are now getting attention. There are now robust composting and diversion technologies for many household waste streams.
Another emerging trend is the rise of Energy from Waste (EfW) proposals. Recently, the NSW, Vic and WA EPA’s have released EfW policies. These generally have three provisos:
- The EfW plant must not cannibalise recycling
- the plant meets best practice air emission standards and
- it must be for energy generation, not just waste disposal.
EfW in Australia though is still a nascent technology. Any Council which invested in it now, would inevitably6 be taking capital and operational risk (irrespective of how the contract is written – but that is another article).
Commercial waste remains a key challenge, with many businesses having little or no recycling on-site. Economically rational business owners weigh up the labour costs of sorting materials against the costs of landfilling.
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. A move to weight based charging for skips will provide a direct and clear price signal to business managers.
But on-site sorting alone is not enough. Building new ‘C+I dirty MRF’s” to recover recyclables from business waste is the real game changer. Most regional Councils own and run the landfill. Consequently the prices they set at the weighbridge are the key driver for private sector investment in dirty MRFs. Again cheap landfill erodes the business case for recycling.
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 (approx 70%), because the materials it processes is more homogenous (timber, metal, concrete), more costly to landfill because it is heavy, and can be sold in large volumes back into robust construction markets.
Role of Government
Let’s be frank. Limiting landfill and diverting waste back to the productive economy is neither easy nor cheap. Ultimately, it is the role of Government to decide the extent and speed of the transition from landfill to resource recovery, or not. It is the function of government to weigh the competing interests of resources, sustainability and cost. The industry is there to assist once the direction is set. Having said that, Councils and State Governments spend a fortune on waste management and recycling.
MRA has worked with governments across Australia to create sustainable systems which maximise resource recovery with community engagement and consent. In my experience most communities support higher recycling rates (with higher landfill prices) so long as much of the landfill revenues are hypothecated to better environmental outcomes.
Mike Ritchie is the Director of MRA Consulting. For more information call 0408 663 942 or email [email protected].