The NSW Environmental Protection Agency (EPA) has ordered supermarket giants Coles and Woolworths to dispose of the 5200 tonnes of soft plastic collected by REDcycle that has been stored in warehouses around the state.

The two supermarkets will have to pay around $3.5 million to dispose of the plastic in landfill, despite already paying REDcycle to take the post-consumer waste away for recycling in the scheme.

REDcycle announced it would be suspending the collection scheme last year. The business, which had seen a huge upsurge of soft plastic material returned to its collection points as consumers awareness grew, had been unable to process the high volume of collected soft plastic due to a of lack of recycling infrastructure, compounded by a lack of market demand for products using the recycled soft plastic. PKN covered the story in detail here and here.

Subsequently, and to deal with the crisis, the supermarkets had been granted conditional authorisation by the ACCC to engage in a taskforce to explore solutions to addressing the immediate impact of the program’s suspension. PKN understands this taskforce has been quarantined to just the supermarkets, with no outside stakeholders included in the discussions. The taskforce has brought to head the issue of what to do with the waste. 

The EPA reportedly gave the two supermarkets three options to manage the waste: to dispose of the waste in landfill; to export it internationally; or to reprocess the plastic. In reality, though, this was only one choice, as no countries will now accept Australia’s waste, and there is nowhere in Australia that is capable of recycling anywhere near the amount of plastic that is being stored.

PKN spoke to Australian Packaging Covenant Organisation (APCO) CEO Chris Foley for his take on the NSW EPA’s order.

“This is an unfortunate situation, and challenging for all stakeholders. No-one wants to see the collected soft plastics end up in landfill. But what we’re seeing here is the regulator’s response to mitigate the fire risk posed by this flammable material being held in storage across several sites,” Foley said.

And on the subject of accountability, Foley points out that it is important to recognise that REDcycle is a private entity, a business that is individually liable. It is not set up in the same way an industry-run or government-regulated stewardship scheme would be, with the vigilance and rigour around how it is managed that would be typical of such a scheme. And for that reason it’s difficult for interested parties like APCO to intervene to provide assistance.

While APCO and other stakeholders such as the Australian Food and Grocery Council are working with the supply chain and key stakeholders on a solution for soft plastics that will adopt a more inclusive stewardship approach, this will not manifest quickly enough to stop the NSW EPA order taking effect.

“The learning from this is that going forward, any scheme for collecting and recycling soft plastics, and indeed other materials, will need a robust and inclusive stewardship framework, integrated into the supply chain, enabling collective participation, and high levels of transparency and accountability to the sector,” Foley said.

The EPA is now working in other states and is likely to issue similar notices, leaving Coles and Woolworth’s with substantial bills. It is unclear if they will seek to recoup the outlay from REDcycle.

The EPA has issued clean-up orders to the two companies for the 5200 tonnes of waste, which has been located in 15 warehouses around the state. Of these 11 are reportedly in the high-risk fire category.

Coles said it was disappointed to learn of the notice, while Woolworth’s said it was surprised. The companies have until Wednesday to appeal. For the warehouse owners, who were looking at a $700 a tonne disposal cost, it would be a relief that bigger companies will be footing the bill.

The clean-up order comes as the EPA and NSW Fire Service are concerned about potential risks from the stockpiled plastic, which is held in warehouses across 11 local government areas.

More warehouses full of soft plastic plastic continue to be unearthed. Four new warehouses have reportedly been discovered in Melbourne alone in the last week. Some 12,400 tonnes of soft plastic that was to be recycled have so far been located, in 32 locations.

That breaks down to 3200 tonnes of waste in 14 sites in Victoria, 3900 tonnes in South Australia, and the 5200 tonnes in NSW. 

REDCycle’s programme operation RG Progammes and Services is reportedly facing charges from the Environment Protection Authority Victoria on three counts of failing to comply with their information-gathering process.

PKN also spoke to Joe Foster, CEO of Close the Loop Group, whose company recycled a fair amount of REDcycle collected soft plastic, but unfortunately a fire at the plant last year meant it could no longer take the material. The plant should be up and running by the middle of this year, and at double the capacity than before.

Foster said: "We would be disappointed to see such large volumes going to landfill as there are other options available including that of being an ideal feedstock for the Close the Loop operation once back up and running this year."   

"We are very supportive of a take back program as the feedstock is perfect for our TonerPlas product which will be manufactured at our Somerton plant in Victoria," he added, noting that the TonerPlas asphalt additive is a tried and tested product which enhances the life and performance of roads using this material.


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