The Federal Government has told packaging stakeholders that it will not introduce a new Commonwealth packaging scheme during its current term, as environment ministers prepare to discuss packaging regulation at a meeting scheduled for mid-September.
In a notification to consultation participants seen by PKN, the Department of Climate Change, Energy, the Environment and Water said the government was considering reforms that balanced environmental outcomes with broader economic and cost-of-living pressures.
“The Minister has communicated that a new Commonwealth scheme for packaging will not be introduced in this term of Government,” the department said.
It said the government was now focused on working with state and territory governments to identify opportunities to improve Australia’s packaging regulations and policies in the nearer term.
The cost-of-living rationale has been challenged by MRA Consulting managing director Mike Ritchie. In a letter to DCCEEW seen by PKN, Ritchie argued that packaging reform would deliver savings across kerbside collection, recycling efficiency, landfill disposal, packaging labelling, council waste charges and litter management.
According to Ritchie, modelling by APCO and MRA indicated that a properly administered scheme would cost about 0.3 cents per packaging item, or approximately 20 cents on an average weekly shop, before indirect savings were considered.
Ritchie said the net cost to the economy would be “zero or very low”, depending on the scheme’s ambitions for recycled content, landfill diversion and litter reduction. He argued that without a regulatory impact statement, the government could not properly assess the relative costs and benefits of reform.
While the broader Commonwealth scheme has been deferred, DCCEEW is still considering the possible application of an updated Design for Kerbside Recyclability Grading Framework.
The department appointed qDesign Enterprises in February 2026 to review the framework originally released for stakeholder feedback in December 2024. More than 65 interviews were conducted between March and May with packaging manufacturers, brand owners, recyclers, reprocessors and industry bodies. The resulting framework has now been delivered to the department.
DCCEEW described it as a “robust and evidence-based guidance tool” that could help industry improve packaging recyclability and meet obligations under the National Environment Protection Measure (Used Packaging Materials) and Australian Packaging Covenant.
However, no decision has been made on whether or how it will be applied. The department is considering whether the framework could provide guidance within the existing co-regulatory system for used packaging.
The notification comes ahead of the September Environment Ministers Meeting, where packaging regulation is expected to return to the agenda. Industry, recycling organisations and environmental groups have been calling on ministers to establish a national regulatory pathway incorporating mandatory design requirements and extended producer responsibility.
Australia’s environment ministers agreed in 2022 that packaging regulation should be reformed to ensure packaging was designed for recovery, reuse and recycling. Consultation on broader reform options subsequently closed in late 2024.
The government’s decision means a new national packaging scheme requiring Commonwealth legislation or regulation will not be introduced before the next federal election, although changes pursued jointly with state and territory governments remain possible.
Ed’s note: After years of lobbying for packaging reform – and amid unusually broad alignment among environmental groups, industry associations and businesses – the decision not to introduce a new Commonwealth packaging scheme this term has been met with deep disappointment and frustration by stakeholders consulted by PKN. Coming shortly before the September Environment Ministers Meeting, the notification will intensify pressure on governments to explain what meaningful reform can now be delivered in the nearer term.
