Australia’s packaging sector is entering a decisive phase. Regulatory momentum is building, infrastructure investment is accelerating, and soft plastics recycling has re-emerged after a period of disruption. The question now facing brand owners and retailers is not whether change is coming, but whether industry will help shape it.
In a recent PKN Industry Update interview, Richard Smith, who is consulting to SPSA and APCO, sets out a clear proposition: industry scheme participation is now the single most important lever in determining the future policy settings for soft plastic packaging.
A system already in motion
Image: iQRenew
Soft plastics recycling in Australia is no longer theoretical. According to Smith, the foundations of a national system are already in place, with collection pathways, recycling capability, and on-pack labelling frameworks now established.
This aligns with broader industry observations that innovation and recycling capability are advancing, even as policy frameworks continue to evolve.
Significant investment underpins this progress. Government funding through the Recycling Modernisation Fund, alongside tens of millions of dollars from recyclers, brands, and retailers, has created a system with real capability. What is missing is not infrastructure, but scale.
As Smith notes, the challenge is no longer building from scratch. It is scaling what already exists.
The real risk: policy shaped without industry
For many businesses, the instinct is to wait for mandatory regulation before acting. Smith is direct in his assessment: this is a high-risk strategy.
Australia is moving towards tighter packaging regulation, likely including recyclability standards, labelling requirements, and minimum recycled content thresholds. Without sufficient industry participation in current stewardship efforts, the system risks falling short of these requirements.
The consequences would be material. Low participation leads to low collection volumes, which in turn underutilises existing recycling infrastructure, delays investment, and weakens the case for soft plastics to remain classified as recyclable. In practical terms, this could force widespread labelling changes, increase compliance costs, and expose brands to reputational risk.
More broadly, a lack of coordinated industry action increases the likelihood of fragmented, state-based regulation. This “fragmentation tax” risks creating duplication, complexity, and higher costs across the value chain.
Inaction, therefore, is not neutral. It actively places at risk optimal policy settings for soft plastic packaging.
Leadership as a signal to government
The core message emerging from the interview is that participation is not just about compliance, it is about influence.
Governments are actively assessing how to structure future packaging regulation. In that context, demonstrated industry leadership carries weight. A well-supported, industry-led stewardship scheme provides evidence that national, coordinated solutions are viable and deliver results.
Conversely, weak participation signals the opposite: that stronger regulatory intervention may be required.
This dynamic is already visible across the sector, with mounting calls for national packaging reform and clearer national policy direction. The policy environment is being shaped in real time, and industry behaviour today is part of that process.
Buying certainty in an uncertain environment
From a commercial perspective, Smith frames early participation as a way to “buy certainty”.
Joining a stewardship scheme provides clarity on future compliance pathways, reduces the risk of costly packaging redesigns, and enables more predictable budgeting for regulatory obligations. It also gives companies a seat at the table as policy settings evolve.
Critically, the cost of participation today remains low relative to the potential cost of reactive compliance later. In a context where packaging reform is inevitable, the choice is between shaping that future or responding to it.
The tipping point for scale
Despite the progress made, participation remains limited, with a large proportion of the market effectively free riding on the contributions of other organisations. This constrains the system’s ability to scale and deliver full circularity.
Smith points to a clear tipping point: high levels of industry participation, broad community access to collection, and sufficient feedstock to fully utilise recycling capacity. Achieving this would unlock a system operating at multiples of previous schemes, with the scale needed to deliver both environmental and economic outcomes.
A defining moment for the sector
The Australian packaging industry has reached a familiar crossroads: capability is ahead of policy, but policy is catching up quickly.
PKN readers will recognise this pattern. Across multiple areas of packaging sustainability, early movers have consistently been better positioned to manage cost, risk, and compliance.
Soft plastics stewardship is no different. The infrastructure exists. The policy direction is clear. What remains uncertain is the level of industry engagement.
As Smith makes clear, the decision facing brands and retailers is straightforward. Step forward now and help shape a coordinated, cost-effective national system, or wait and react to the outcome that others design.
In today’s environment, leadership is not just a reputational choice. It is a strategic one.
