PKN EXCLUSIVE: Three months on from the release of the Rennie Report, Australia’s packaging manufacturers and recyclers say the window for action is narrowing fast. Industry leaders warn that without a clear signal from Canberra, local investment, sovereign capability and the circular economy ambitions government has backed with public funding could begin to unravel.
Australia’s packaging reform agenda is at a critical juncture.
That was the clear message from a roundtable PKN convened on 11 March at Planet Protector Group’s Altona facility, where leaders from the packaging manufacturing and recycling sector gathered to discuss what is at stake if the federal government continues to delay national packaging regulation.
Participants around the table represented different parts of the packaging value chain, but their message was strikingly aligned: industry has invested, capability has been built, consultation has been exhaustive, and the case for reform has already been made. What is missing now is government action.
The urgency has only sharpened since the release in January of the Rennie Report, commissioned by ACOR and APCO with support from Rennie Advisory. The report laid out in clear terms the risks of further delay and called for government to indicate its intentions within three months. With that timeframe now almost elapsed, frustration across industry is growing.
For Pact Group head of Strategic Communications Simon Dowding, the Australian packaging sector is now at a crossroads.
“We are operating in what is effectively an unregulated environment,” he said. “We have a co-regulatory system, but it’s simply not working. We haven’t reached the national packaging targets, and we’re now seeing a lot of imported packaging, whether filled or unfilled, coming into the country that doesn’t necessarily meet the standards we would expect.”
Dowding said industry is no longer debating whether reform is needed, but waiting for the federal government to follow through on its commitment to introduce national packaging laws.
“For the first time, we have broad support from across the supply chain for national packaging reform as promised by the government,” he said. “The consultation has been done. The changes can be made under existing legislation. The time is now.”
Cleanaway head of Innovation Jeroen Wassenaar said uncertainty around the shape and timing of reform is already stalling progress.
“Brands are reluctant to pay the true cost of recycled content in Australia while the policy direction remains unclear,” he said. “That uncertainty is creating stagnation. Companies are holding back from increasing recycled content or redesigning packaging because they don’t know what the rules will be.”
Imports and market pressure
That policy vacuum is being felt across the value chain. Local producers say they are under growing pressure from low-cost imports, particularly in recycled PET, while domestic recyclers are struggling to secure the demand needed to keep Australian-made material flowing through the system.
Jeremy Selhore, general manager Technology at Kuraray Plantic, said the market remains highly price pressured and increasingly saturated with imported material.
“As a packaging producer we’re operating in an extremely price-pressured market,” he said. “There has been a lot of door-knocking from importers.”
Selhore said the issue is not only price, but credibility.
“The PCR content is what separates the two,” he said. “What is the actual recycled content in imported rPET? In many cases, it’s impossible to know.”
Martogg Group commercial manager David Finlayson said the influx of imported recycled material into Australia reflects broader shifts in global recycling markets. Many recycling plants across Asia were built to supply Europe and the United States, he said, and as those markets tighten their regulatory settings, surplus capacity is increasingly looking for alternative outlets.
“Australia is seen as a sophisticated market where recycled PET can be sold,” Finlayson said. “But it’s also a relatively small market. You don’t need to bring in a huge volume of imported material to have a very significant impact on domestic producers.”
Concerns over traceability were also raised during the discussion. Participants said any future reform must include robust, auditable chain-of-custody requirements so that recycled content claims can be verified, especially where imported material is involved.
But traceability alone will not solve the current problem. The bigger issue, several participants argued, is that in the absence of mandatory settings, brand owners remain free to choose the cheapest option – and too often that means virgin or imported material rather than locally recycled content.
Finlayson said the consequences of that are already rippling upstream.
“If the Australian market won’t buy domestic made rPET pellets, then we won’t make PET hot wash flake feedstock, which means we won’t be able to buy CDS PET bottle raw materials to feed our production plants.” he said. “All of a sudden, the whole supply chain gets clogged upstream.”
Wassenaar underscored the point from the collection side.
“The bottles keep flowing onto the market,” he said. “CDS collection doesn’t stop. Volumes continue to grow, so the question becomes: where does that material go if there is no demand for it?”
Investment waiting on policy
That question sits at the heart of the current policy gap. Governments have supported collection and recycling infrastructure through grants and policy settings, while industry has responded with substantial private investment. But the market mechanisms needed to pull recycled material through into new packaging have not been put in place.
Dowding said Pact and its joint venture partners had invested heavily on that basis, upgrading packaging manufacturing assets and building recycling capability. Yet in the absence of regulation, parts of that investment are now under severe pressure.
He pointed to Pact’s recent half-year result, which disclosed a $19 million write-down at its HDPE and PP recycling joint venture, saying the future of that facility depends on government action arriving sooner rather than later.
“You just can’t keep running a business at a loss,” he said.
Wassenaar referenced the Rennie Report’s warning that around 50 per cent of Australia’s recycling capability is already sitting idle and noted that this will grow to two-thirds by 2030.
“That’s not sustainable,” he said. “Those facilities simply won’t be there anymore.”
Participants were careful not to overstate the crisis. No-one around the table claimed recycling plant closures are already widespread, but several warned the sector is now in a holding pattern that cannot continue indefinitely. Projects are being deferred, expansion is being shelved, and innovative technologies that could help solve harder-to-recycle streams may simply not proceed without a stronger policy signal.
Wassenaar said Cleanaway’s project with Viva Energy on soft plastics and circular feedstock is a case in point.
“We’ve done a pre-feasibility study, we’re currently in feasibility, and if there’s no change in regulation, it’s going to go on the shelf,” he said. “Under the current environment, it’s not economic. We need an EPR that can drive investments like that.”
Selhore said the same caution is shaping decisions at Kuraray Plantic.
“Any new capex or new equipment is unlikely to be considered while the market remains this uncertain,” he said. “We need to see demand pull through for our products.”
Regulation as the missing link
The central ask from the roundtable was not vague. Participants called for national packaging reform to be introduced this year, anchored by eco-modulated extended producer responsibility, mandatory recycled content thresholds, and mechanisms that recognise and reward the use of locally recycled material.
Dowding said eco-modulated fees remain the preferred model because they create a commercial incentive to do the right thing.
“You do the right thing, and you pay less to place your packaging on the market,” he said. “That is the principle behind eco-modulated EPR.”
Wassenaar added that any incentive or penalty must be meaningful enough to close the gap between virgin and recycled material.
“It needs teeth,” he said. “It needs carrots and sticks.”
Several participants stressed that government should not allow the complexity of soft plastics reform to delay progress where solutions already exist. Rigid plastics, particularly rPET, were repeatedly described as the most immediate opportunity.
“The infrastructure is here already,” Dowding said. “We have the infrastructure to recycle it. We have the infrastructure to manufacture new packaging using recycled material.”
Finlayson agreed, describing rPET as the most straightforward starting point for reform.
“rPET is the low-hanging fruit,” he said. “The investment is here, the capability is here, the recycling process is well established globally. All that’s missing is the regulatory push that creates the demand pull-through.”
Without that signal, he warned, the system risks backing up.
“If we can’t sell recycled resin into packaging locally, the entire chain gets clogged upstream – from pellet production back to bottle collection.”
Participants also pointed to the broader economic implications of delay. If Australia loses more domestic capability, they warned, the country will become increasingly dependent on imports at a time when global supply chains are already volatile.
Selhore said the issue extends beyond the immediate commercial pressures facing packaging producers.
“Whether we compete or not, everyone in the value chain is connected,” he said. “If one link breaks, Australia risks losing its sovereign capability to use recycled material.”
That concern resonated strongly with Joanne Howarth, founder and CEO of Planet Protector Group, whose Altona facility is pioneering recycling and manufacturing using waste textiles and natural fibres.
Howarth said her company had made significant local investment and built an Australian manufacturing operation around a sustainability mission, yet cheaper imported alternatives continue to undercut locally produced solutions.
“It’s confronting,” she said. “We need the big brands to support Australian solutions.”
Her comments served as a reminder that behind the policy debate are real businesses, facilities and jobs – and that once industrial capability is lost, it is rarely rebuilt.
Industry’s message to Canberra
The government already has before it a detailed roadmap in the Rennie Report and, for perhaps the first time, broad agreement across the packaging value chain on what needs to happen next.
What industry is asking for is certainty.
Even a clear public signal that national packaging reform will proceed this year, participants said, would be enough to restore confidence and unlock movement in the market.
As Martogg’s David Finlayson put it: “They know what they have to do. What industry needs now is a signal that they’re going to get on with it.”
