Australian soft plastics recycler iQRenew has called on Environment Minister Murray Watt to introduce an emergency support plan before Christmas, warning that its Kundle Kundle recycling facility could close within weeks as a shortage of feedstock threatens its viability.
iQRenew CEO Danny Gallagher says the Federal Government's decision not to proceed with mandatory packaging reform has left recyclers without the collection systems and end markets needed to sustain their operations, despite significant investment in processing infrastructure.
The company is calling for an interim continuity plan to keep viable recycling facilities operating, alongside legislation requiring packaging producers to fund collection and recycling, and mandatory recycled-content requirements to stimulate demand for locally processed material.
“We need enough recyclable material to fill our facilities, and we need enough buyers to take the material at the end. Right now, we don’t have enough plastic,” Gallagher said.
The scale of the feedstock shortage is particularly evident at iQRenew's Kundle Kundle facility, near Taree in NSW, where Gallagher warns the situation has become critical.
“Our plant at Kundle Kundle, built to recycle 14,000 tonnes of soft plastics a year, took in just 100 tonnes in September and could close within weeks, all while households want to recycle and governments want to reduce the amount going to landfill.”
REDcycle stockpile exhausted
The facility previously operated 18 hours a day, five days a week, processing legacy soft plastics collected through the former REDcycle scheme. That stockpile has now been exhausted, with no equivalent collection stream established to replace it.
According to Gallagher, the plant is currently operating just two days a week.
iQRenew invested more than $26 million in the Kundle Kundle operation, with state and federal governments committing approximately $9.1 million in August 2025 to support an expansion that would lift annual processing capacity to 24,000 tonnes.
Gallagher argues that the investment was made in anticipation of the packaging reforms proposed by former environment minister Tanya Plibersek, which were expected to establish stronger producer responsibility and recycled-content requirements.
“Industry has spent hundreds of millions of dollars in infrastructure to meet Government promises. Now the Government has backflipped and is refusing to uphold its end of the bargain,” he said.
Call for action before Christmas
The company's latest appeal follows the 1 November 60 Minutes investigation into Australia's recycling crisis, in which Gallagher and representatives of the Australian Council of Recycling raised concerns about the consequences of the Federal Government's decision to abandon its proposed national packaging regulatory scheme.
iQRenew has renewed its call for government intervention following comments by Minister Watt during the program that the cost of reform was “not very high”.
Gallagher maintains that an interim rescue package could be funded at a cost equivalent to less than a paper shopping bag per household per week, although the company has not provided a detailed costing in its release.
“All we’re asking for is a plan before Christmas that keeps recyclers open until the Government’s own reform arrives,” he said.
The urgency is compounded by the volume of plastics currently being landfilled. Australian Government figures cited by iQRenew show that more than 2.7 million tonnes of plastic reached end of life in 2023–24, with only 14 per cent recovered for recycling.
Gallagher also points to the NSW EPA's warning that Greater Sydney could run out of landfill capacity by 2030, arguing that existing recycling infrastructure should be utilised rather than allowing it to stand idle.
For iQRenew, the immediate challenge is maintaining operations while longer-term regulatory arrangements are developed. Without near-term intervention, the company warns that Australia risks losing recycling capacity already built with private and public investment, before the collection and market mechanisms needed to support it are established.
