The next time you wheel out your recycling bin, think about something seemingly unlikely: economic nationalism.
China has stopped importing much of the recyclable materials from Australia and pretty much everywhere else on the planet. In doing so, they’re seeking to increase their domestic ability to deal with their population’s growing mountains of post-consumer material.
The Chinese are super-charging their home-grown recycling industry because it makes sense for jobs and a cleaner environment.
This “environmental patriotism” by the Chinese has caused a seismic shift underneath Australian recycling – a suburban institution that 90 per cent of Australians voluntarily participate in. (How many would vote if it weren’t compulsory, one wonders by comparison.)
For a long period, our own system has been free-market based and therefore reliant on the prices paid by Chinese importers.
It’s meant that kerbside recycling has been very affordable and cost a typical Australian household (as part of their rates) less than $50 per year – or less than a coffee per week.
But, as some commodity prices have now fallen below zero and dozens of local services across the country are on the brink, immediate intervention is needed to keep millions of tonnes out of the ground and stockpiles and to keep some 50,000 jobs including regional ones.
We shouldn’t resent the Chinese for what they’ve done – we should emulate them.
It’s time to re-set and re-boot Australian recycling to be more resilient to global impacts. We can move from being mostly about “push” (collecting material) to more “pull” (using that material to make recycled content products in Australia as part of a more circular economy).
That involves standard business and policy practices like: a) containing systemic costs; b) expanding markets, and; c) providing the certainty to ensure investment.
And, it involves assertive action.
In the first respect, work needs to happen on more viable contracts between companies and Councils. The cheapest contract isn’t the best one; in fact, it’s often the one that most exposes a community to a cessation of services.
Even now, one Council in Victoria is giving a 75% weighting to the cheapest bid in a recycling tender. That’s not reducing the community’s risk; it’s increasing the risk of a service falling over because it’s financially unrealistic.
Better contracts can cope with the up’s and down’s by recognizing the service’s real value.
Ever get confused about what can go in the bin or not? Me too! From Council to Council, it’s often unclear what’s being collected and what’s not.
When the wrong things go in the recycling bin, that’s called contamination; it stops some batches of collected stuff being made into new products. Bad bin behaviour leads to rotten results and climbing costs – which need to be borne somewhere.
That’s why we need a consistent approach – across Councils and very transient and diverse communities – about what materials are recyclable. And, as individuals, we need to accept that we’re a link in a chain of making new stuff (and saving virgin resources) and it’s our responsibility to successfully sort.
Recycling companies suffer for these sins of others.
Namely, when a load of material is so contaminated that it has to go to landfill, a levy is paid by the recycling company.
It’s the same levy applied to rubbish that has had no positive effort invested in it. It’s a slug that the vast majority of overseas competitors never face and it seems to put some behind the 8-ball.
Indeed, as part of the global market, Australian recyclers and reprocessors, who also have comparatively high energy and high labour bills, singularly face this level of high-tax regime, and it needs to be reformed for them to stay not competitive – but just in business.
Those steps are first-aid. It’s time to go further like China and European countries have before us. It’s time to transform recycling into an important Australian substitute industry as the conventional economy contracts and we seemingly stop making things. Not everybody can be king or queen of the keyboard – we need quality “doing” jobs too.
That means investing in local operators that make recycled content products here from material collected here, including supporting expanded paper remanufacturing, directing capital funding to new remanufacturing capacity for mixed plastic and glass, and positive procurement and demand creation by all levels of Government of recycled content product – which is a norm for 20 years in the United States.
Leadership looks like directing that the colossal construction of Snowy 2.0 contains collected glass and mixed plastic – not solely virgin materials – in applications like concrete, road base and bitumen.
What a great outcome it would be to turn our empties and throw-away plastic into infrastructure and employment.
So, where’s the money come from and why should recycling “get a leg up”?
The previously mentioned landfill levy exists in several States including the two most populous – Victoria and NSW.
Taxpayers would not generally know that they indirectly pay around $1 billion per year in landfill levies, and it’s one State’s has increased by more than 250% in recent years.
More than 90% goes to consolidated revenue of State Governments rather than back to the environmental purposes for which it was originally established.
It seems to many in this perfect storm that it’s the perfect time to put more of this hidden cash stash back into recycling’s resilience – and not just for the immediate crisis.
To provide a comparison, agriculture is about 3% of the economy and is worth around $60 billion per year; in the last two big droughts, that sector appropriately got around $1 billion both times in relief.
We equally support our miners when times are tough due to price swings.
Given the resource recovery sector is about .5% of GDP and worth around $20 billion per year, it’s not blue sky to suggest a one-off injection of $150 million from existing landfill levies toward industry development – including making more recycled content products.
(Currently, only about $20 million of public money is going toward forms of recycling infrastructure, while in one State vouchers for kids to do sport cost around $40 million per year.)
When it comes to recycling, we surfed a Chinese wave of demand. Now, the tide is out.
Market reality is different and we have to act differently if we want to continue to divert from landfill to conserve energy, water and jobs, and keep faith with the public.
Driving domestic demand for what’s collected at kerbs across the country needs to be the new normal.
As part of that, the claimable opportunity before Australia’s Ministers for the Environment, gathering next month to deal in part with the current crisis, is committing to constructing Australia’s first-ever National Recycling Resilience Plan.