On 1 July 2022, the Circular Economy (Waste Reduction and Recycling) Act 2021 (Act)commences and Recycling Victoria is established as a new regulatory agency for the Victorian waste and resource recovery sector.[1] These reforms support Victoria’s transition to a circular economy and implement the Victorian Government’s circular economy policy, ‘Recycling Victoria: A new economy’ (Circular Economy Policy).

In addition to this, the new Environment Legislation Amendment (Circular Economy and Other Matters) Bill 2022 (Bill) was introduced to Parliament in June 2022. It proposes to amend the Act, the Environment Protection Act 2017 and the Sustainability Victoria Act 2005 and gives effect to the key commitments of the Policy.

In this alert we revisit some of the major initiatives of the Act as well as a number of key areas of change the Bill proposes.

1. Recycling Victoria – a new regulator

One of the major changes under the Act is the creation of Recycling Victoria. The various Waste and Resource Recovery Groups will be abolished. Recycling Victoria will be established and begin operations from 1 July 2022. The key functions of Recycling Victoria include:

  • administering the container deposit scheme.
  • providing strategic planning for waste, recycling and resource recovery services.
  • providing assistance to local governments in procurement and building capacity for municipal waste.
  • conducting inquiries under the Act.
  • enforcement and compliance with the Act.

Industry participants should consider how best to develop a working relationship with Recycling Victoria. The Act provides for a number of forums and processes that facilitate consultation and engagement with Recycling Victoria.

2. Data Collection – reporting requirements

The Act requires certain entities to report prescribed information to Recycling Victoria. Entities are categorised as either regular reporting entities or occasional reporting entities. Regular reporting entities include local governments and must give Recycling Victoria prescribed information, whilst occasional reporting entities will be issued a direction to provide the relevant information by Recycling Victoria.

Recycling Victoria will have powers to use, disclose or publish the information collected. The information will feed into the Victorian Recycling Infrastructure Plan and yearly market strategies report which will enhance insight into the sector and provide for more efficient solutions to issues and risks.

The collection, transfer and use of data may be commercially sensitive to industry participants. Ultimately, such data is intended to enhance government’s planning and policy development for the sector.

[1] Divisions 1 and 2 of Part 3, Part 6 and sections 61, 74, 199 and 208 of the Act do not come into operation. Notably this includes the container deposit system.

3. Introduction of Service Standards

The Act empowers Recycling Victoria to prepare service standards for the delivery of waste, recycling and resource recovery services. The Minister must approve these standards and a consultation process is currently underway. The standards will detail:

  • separating and sorting types of waste and recycling material
  • methods of identifying types of waste and recycling material
  • service performance and reporting
  • differing standards or requirements for different types of services, material or waste for different areas.

The service standards are intended to promote uniformity across sector. Once approved by the Minister, industry participants will have to consider what impact they will have on existing contractual arrangements.

4. Container Deposit Scheme – coming soon

The Act establishes a Container Deposit Scheme (CDS) to further encourage recycling of eligible containers such as cans, cartons and bottles. The CDS will be administered by a Scheme Coordinator and Network Operators will be appointed to collect the eligible containers. The CDS will commence in 2023. The CDS will:

  • provide Victorians a refund for every eligible can, carton or bottle that is returned
  • be funded by beverage suppliers via an in-arears payment model as they are ‘first suppliers’
  • introduce civil and criminal penalties for the disposal of eligible containers at landfill if a collection point operator has paid a refund amount for them.

The CDS will raise the value of eligible containers and create a market for those containers. Industry participants will be closely watching the impact of the CDS on existing contractual arrangements, particularly with municipal kerbside collection services and recyclables processing.

5. Four Bins

The Act creates a fourth type of waste stream for glass. Municipal councils and alpine resorts must offer waste services for the four waste streams:

  • food organics and garden organics service;
  • recycling service (other than glass);
  • glass recycling service; and
  • residual waste service.

The food organics and garden organics service and the glass recycling service will be progressively introduced on a prescribed date in areas where they are not already in service.

Municipal councils will need to budget and plan ahead for these new services and engage with Recycling Victoria regarding their plans.

6. Victorian Recycling Infrastructure Plan

The Bill introduces additional powers and responsibilities for Recycling Victoria by shifting responsibility for infrastructure planning from Sustainability Victoria to Recycling Victoria. Recycling Victoria is now required to prepare and publish the inaugural Victorian Recycling Infrastructure Plan (VRIP).

The VRIP is a single 30-year strategic plan for Victoria’s waste, recycling and resource recovery infrastructure needs at State, regional and local levels. The objectives of the VRIP include:

  • to provide long-term strategic planning to guide and inform decision-making in relation to waste, recycling and resource recovery infrastructure at State, regional and local levels
  • to enable waste, recycling and resource recovery infrastructure planning to be informed appropriately by land use and development planning and policy, environmental regulatory approvals and policy, and transport planning and policy
  • to support risk, consequence and contingency planning for the waste, recycling and resource recovery infrastructure networks
  • to provide long-term strategic planning in relation to Victoria's waste, recycling and resource recovery infrastructure needs for a period of 30 years.

In preparing the VRIP, Recycling Victoria must consult with organisations including, Sustainability Victoria, the Environment Protection Authority and the Municipal Association of Victoria. The VRIP will be regularly reviewed.

Industry participants will take a keen interest in the VRIP to ensure their infrastructure projects are endorsed by Recycling Victorian. It is hoped the VRIP will encourage much needed investment in infrastructure across Victoria.

7. New Waste to Energy Scheme

The Bill also provides for a new waste to energy scheme in Victoria following the recent release of the Victorian Waste to Energy Framework.

Thermal waste to energy is a process to recover energy from heat or to produce fuel from waste. The Bill proposes to regulate waste to energy projects by placing limits through cap licences on the amount of permitted waste that can be processed by licence holders in thermal waste to energy facilities.

Permitted waste is waste that cannot be the subject of any further recycling and includes residual municipal waste if it is collected within at least a three bin system and industrial waste if is sorted and separated in accordance with any prescribed requirements that applies to the entity sorting and separating the waste.

Persons proposing to operate a thermal waste to energy facility or seeking to the increase amount of permitted waste processed are required to submit expressions of interests to Recycling Victoria as part of the application process. Existing licence holders may also apply for an existing operator licence within 6 months after the commencement date.

Key Takeaways

  • The creation of Recycling Victoria on 1 July signals a major step in the implementation of the Government’s Circular Economy Policy.
  • Recycling Victoria has been given significant new powers to regulate the waste and resource recovery sector. As a result industry participants will have to navigate a new regulatory environment with additional complexity.
  • The VRIP and Waste to Energy Scheme will drive investment and longer term planning for critical infrastructure to support Victoria’s new circular economy.
  • Please get in contact with our team to find out how these changes affect your enterprise.