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REDcycle has accepted the offer made by the big two supermarket chains to take responsibility for the 12,400 tonnes of soft plastic stored by REDcycle in warehouses around the country, ahead of being declared insolvent today.

Coles and Woolworths made the offer to store the soft plastic stockpile themselves late last week, after a meeting of the Soft Plastic Taskforce, following the NSW EPA's order that the stored plastic be sent to landfill as it posed a fire risk.

REDcycle, which had already been paid a reported $20m by Coles and Woolworths since the scheme started to take it away and recycle it, responded to the offer over the weekend, ahead of a court appearance today.

RG Programs & Services, which traded as REDcycle, was wound up by order of the NSW Supreme Court today.

The winding up order from the court came from applications by transport companies BTG Logistics and Topline Logistics. The former claimed REDcycle had not paid it $200,000 for storing some 600 tonnes of soft plastic. The amount owed to Topline is unknown.

A liquidator has been appointed. This will not impact the rescue plan proposed by Coles and Woolworths, which covers the material management but does not extend to covering any REDcycle debts or acquiring the company itself. Coles and Woolworths have only taken over the management and storage of the REDcycle soft plastic, the company's creditors will have to go through the usual channels.

Coles and Woolworths said they would “implement an interim strategy, such as safely storing material until it can be viably processed for recycling”. This could involve storing the plastics inside shipping containers at a licensed facility, although this solution has not been confirmed.

The supermarkets will both contribute to a multi-million dollar fund to pay for the storage and management of the plastic until it can be recycled.

The main recycling partner for REDcycle material, Close the Loop, will have its soft plastics recycling line back on stream in June, and this will be able to take 2500 tonnes a year from the taskforce/supermarket collection source, but the recycler says it will also be taking more volume of soft plastics from other sources, such as direct council collections.

In the interim, other recycling solutions are being developed by a range of stakeholders.

Tanya Plibersek, minster for the environment, said: “I am pleased that the taskforce has responded. I am hopeful that the supermarkets will come up with solutions for soft plastics recycling. We have to use less, and we have to be able to recycle and reuse.”

The original recycling scheme failed because REDcycle could not find recycling capacity to handle the increasing levels of soft plastic being collected by the public and left in designated bins at Woolies and Coles. REDcycle instead stored it in vast warehouses around the country, with some of the plastic stored for the past five years.

Throughout this developing story, there has been a strong groundswell of support for REDcycle, as this was an initiative that the community and the industry wanted to see succeed. Brand owners were strongly behind the scheme, with many having added the REDcycle logo to their packaging. It's unclear as yet what packaging changes will have to be made, and how soon, to ensure labelling accuracy and prevent consumer misinformation.

The REDcycle scheme though only handled a miniscule amount of Australia’s soft plastic, estimates vary between 1-3 per cent. Boomerang Alliance, a coalition of 55 conservation groups, says it is just one per cent of the 450,000 tonnes of soft plastics it claims are used in Australia each year. Earlier this week, it called on government to introduce a robust regulatory framework, saying voluntary action has clearly failed.

The offer by Coles and Woolies came just three days before the NSW Environment Protection Authority (EPA) deadline for  the duo to come up with a plan to deal with the 5200 tonnes of soft plastic that REDcycle had stored in warehouses around the state, many of which the EPA deem to be fire hazard. It required a response by today.

NSW EPA CEO Tony Chappel said both Coles and Woolworths had indicated a willingness to work with the EPA to address immediate safety concerns.

He said, “All manufacturers and retailers have a responsibility to deliver sustainable solutions for plastic packaging. While this has been a challenging situation for all parties, enormous opportunities lie ahead for industry and government to improve governance and collaboration around new solutions to address problematic waste streams.

“We all need to work together to invest in infrastructure and develop markets that support a step change in recycling initiatives.

“We are pleased to see industry engaging productively on both immediate and long-term solutions to these shared sustainability challenges, and we are now working more constructively towards a common goal.”

PKN will keep our readers up to date as this story develops.

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