13 March 2023

Waste myth #2: REDCycle stockpiling plastic shows that recycling is a rort

We keep hearing and reading (what we think are) “waste myths” on-line and in on mainstream media. Mike Ritchie has decided to dispel those myths in this "Waste myths" series of articles.

By Mike Ritchie, Director, MRA Consulting Group

Amidst all the media hyperventilating about the demise of REDcycle and the stockpiling of plastic, it is easy to think that all plastic recycling, and all recycling for that matter, is broken or worse still a fraud. It isn’t.

Unfortunately, the rot set in when previous Prime Minister Scott Morrison misquoted the statistics in a press release. He said only 12% of yellow bin plastic was being recycled implying that the rest is sent to landfill. That is, that you and I are wasting our time putting out the yellow bin.

What he meant to say was that only 12% of total Australian plastic was being recycled from the economy. He did not correct the record.

Ever since the media has been waiting for “gotcha” moments to show that the whole recycling sector is a fake.

It is extremely frustrating.

Here are some plastic facts:

We generate 2.5 million tonnes of plastic waste streams each year;
Of that we recycle about 400,000 t mainly PET (such as coke bottles), HDPE (milk bottles) and LDPE (pallet wrap etc);
Only 150,000 t is soft plastic (bread bags, plastic bags etc);
REDcycle collected less than 7,500 t/yr of that; and therefore
REDcycle represents less than 5% of available soft plastic and a miniscule fraction of all plastic available for recycling.

The success or failure of REDcycle is immaterial to recycling rates in Australia.
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It is obvious that our recycling rate for plastic generally is pathetic. About 15%. Even plastic packaging rates are low at about 18%. The economics of plastic recycling are busted. It is most often cheaper to landfill it than recycle it.

Which points to the bravery of companies like REDcycle, Close the Loop, Visy, PACT, Brightmark, QENOS, Plastic Forest and others who are having a go in spite of massive economic disincentives for recycling.

REDcycle was always pushing it uphill as a small business trying to set up a consumer facing take back scheme for soft plastic. Coles and Woolies endorsed it because it was the right thing to do. Everyone in that supply chain should be congratulated for giving it a go.

But it was always going to be hard because there is no money in recycling soft plastic. There simply aren’t enough markets which want to pay for the resulting plastic pellets to put enough money in the supply chain. So, when headwinds arise there simply isn’t enough value to weather the storms (of normal business ups and downs).

What frustrates me is the media trying to “gotcha” REDcycle for doing the right thing.

REDcycle faced a dilemma when Close the Loop, the user of the soft plastic, had a fire in its processing plant. Close the Loop thought it would be up and running in 6 months. It took longer. So what should REDcycle do?:

Stop collecting from Coles and Woolies and tell all residents the service is no longer available?;
Stockpile the material while they wait for Close the Loop and other reprocessors to come back on stream; or
Keep collecting but landfill the soft plastic.

In my view they did the right thing in stockpiling it. They kept the collection going and did not undermine confidence in recycling by landfilling it. That is what every other business in the economy does when supply or demand moves up or down. They buffer by warehousing material.

If I had a criticism, it would be that REDcycle needed to inform the EPA’s and others in the supply chain straight away. Transparency would have prevented the media trying to “gotcha” them.

We need companies like REDcycle to succeed. We don’t need the media undermining the utility and validity of recycling. We need governments to step up to fix the economics of recycling generally.
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The recycling industry diverts 40 MT from landfill every year back into the productive economy. As a result of their efforts only 27MT is landfilled. Imagine the chaos if all recycling in Australia was undermined. 67 MT of material would be landfilled, a $15B/yr industry would collapse and over 15,000 people would lose their jobs. Greenhouse gas emissions would rise by at least 40 MT CO₂-e/year (almost 10% of Australia’s emissions).

Recycling is challenging but it is not broken, and it is definitely not a “rort”.

Mike Ritchie is the Managing Director at MRA Consulting Group.

This article has been published by the following media outlets: