VIDEO: PKN Industry Update with Richard Smith

PKN EXCLUSIVE: As soft plastics reform gathers pace, Richard Smith of 10R’s Consulting makes the case for why brand owners should act now – with early SPSA participation key to managing compliance risk, controlling costs and securing a national recycling pathway.

Video transcript (edited for clarity)

Lindy Hughson in conversation with Richard Smith, 10R's Consulting

Lindy Hughson:
Soft plastics recycling remains one of the most complex challenges facing the Australian packaging industry. While policy settings continue to evolve, industry is being asked to step forward now, with the Soft Plastics Stewardship Australia scheme currently operating on a voluntary basis.

Today, I’m joined by Richard Smith from 10R’s Consulting, who is working closely with both SPSA and APCO on industry engagement and onboarding. We’re going to unpack what’s already in place, what’s at stake for brand owners, and why the decision to participate now rather than wait is becoming a critical business consideration.

Richard, welcome. Where are we at right now with soft plastics stewardship in Australia?

Richard Smith:
Hi Lindy, thanks so much for having me here today.

Right now, Lindy, there had to be trust rebuilt, and that’s been done in spades. In real terms, a new system for soft plastics has been established and secured.

Collection and reprocessing, and the ARL labelling pathways, are in place. Importantly, we have recycling and collection in place today, with a new organisation overseeing the system of soft plastic stewardship – Soft Plastics Stewardship Australia.

They’re working very collaboratively with APCO, providing systems and processes for data collection, reporting, design guidance, and of course the ARL, which I know all brands value.

Lindy Hughson:
What’s different today compared to, say, two years ago?

Richard Smith:
I think one word, Lindy – investment.

Significant investment from government – $60 million via the Recycling Modernisation Fund. Backing that up, recyclers and industry have invested around $50 million in infrastructure. Brands and retailers have invested over $30 million to process materials and operate store and kerbside trials.

So what’s different today is a strong system capability that just wasn’t present two years ago.

Lindy Hughson:
There’s still a strong perception that soft plastics is unsolved, but your information suggests otherwise. What is already working?

Richard Smith:
The work by the supermarket taskforce, and now SPSA, means we have four significant levers in place.

The first is credible collection pathways. There’s been fabulous work by Woolworths – we’re now at around 60% collection coverage through store take-back. We also have credible kerbside collection happening through programs like Curby, and councils running their own drop-off programs.

The second is reprocessing capacity, which was missing. That has now been established, and we’re seeing organisations like iQ Renew, APR and others processing collected material.

Third, we have on-pack labelling in place. With the scale of collection, the ARL ‘Check Locally’ label has been maintained on soft plastics, which is of huge value to brand owners.

And fourth, what’s really exciting is the emergence of a food-grade PCR pathway. A lot of soft plastics are food-grade, and we’re seeing investment, particularly from APR, in feedstock preparation and advanced recycling, moving towards local, food-grade circular content.

Lindy Hughson:
So this is less about starting from scratch and more about scaling what’s already there.

Richard Smith:
Absolutely. While all this great work has been undertaken, it’s still not at full scale.

Collection volumes are still too low – we’re not yet at the 80% community access we need. That means we don’t have sufficient feedstock to keep reprocessing facilities running at planned output.

At the same time, SPSA participation is only around 15%. There is a very solid runway to scale, but it needs to be funded, and that requires brands to join the scheme.

Lindy Hughson:
The burning question then is: what is the risk if brand owners don’t engage now?

Richard Smith:
The real opportunity is for brand owners to create certainty around future compliance and packaging costs – but that requires participation.

Low membership leads to low collection, which leads to low feedstock. That means underutilised reprocessing capacity and reduced investment confidence.

That creates a cycle of uncertainty and higher brand risk. It could also lead to fragmented state-based regulation rather than a harmonised national approach, which would mean duplication and higher compliance costs.

There’s also potential labelling change costs and reputational risk. And in a constrained market, recycled content will come at a higher premium.

So in reality, it’s a high-risk strategy to delay joining SPSA.

Lindy Hughson:
And it’s also a high-risk strategy to wait for mandatory regulation?

Richard Smith:
Yes, it is. It misses the opportunity to create greater certainty over future compliance and packaging costs.

Government is moving towards regulation, and for soft plastics to remain recyclable, they need to be designed appropriately, collected at scale, and processed effectively.

If we don’t reach that scale, there is a risk that recyclability ratings could change, which would mean label changes – and that comes at significant cost.

Joining SPSA now is far lower cost than managing label change in the future.

Lindy Hughson:
Let’s look at the business case. What does SPSA deliver for brand owners today?

Richard Smith:
It delivers significant value.

It ensures an end-of-life pathway and creates certainty. It provides operational simplicity through APCO alignment. It supports brand credibility and consumer expectations around circularity.

It also gives brands the ability to influence and advocate, and confidence that we can achieve nationally consistent legislation.

It reduces the risk of labelling changes and associated costs, and provides a low and predictable compliance cost.

Lindy Hughson:
So really, this is about buying certainty in an uncertain policy environment.

Richard Smith:
Yes, that’s well put. Being proactive and joining SPSA provides the best position for managing future compliance costs.

Lindy Hughson:
Cost is always front of mind. How should businesses think about the financial impact?

Richard Smith:
Businesses don’t like costs they can’t forecast or plan.

Joining SPSA allows for predictable compliance costs now and into the future. The cost per unit is very low – for example, for a bread bag or a block of chocolate, it’s well under a tenth of a cent per unit.

For consumers, that’s a negligible impact. And the ACCC has approved cost pass-through, which provides further confidence.

Compared to the potential cost of label changes or fragmented regulation, it’s a lower-risk position.

Lindy Hughson:
The scheme is voluntary now, but clearly designed to scale. What signal should industry take from that?

Richard Smith:
The key signal is that mandatory regulation is coming, and industry needs it to be nationally consistent.

The SPSA scheme is industry-led, aligned with government, and supported by APCO. That partnership helps avoid duplication and streamline reporting.

Lindy Hughson:
Does early participation give brand owners a seat at the table?

Richard Smith:
Definitely. SPSA is a member-based organisation, working with APCO and engaging with government and the broader value chain.

It gives brand owners a credible seat at the table as the system evolves.

Lindy Hughson:
What about free riders? How important is broader participation?

Richard Smith:
It’s critical. Around 85% of the market are currently free riders.

To scale the system and meet future requirements, we need increased participation. More members means more recycling, greater certainty, and lower long-term cost risk.

Lindy Hughson:
What is the tipping point where the system really starts to deliver at scale?

Richard Smith:
It comes down to three things – high brand participation, around 80% community access to collection, and sufficient investment to scale reprocessing.

SPSA is targeting around 30,000 tonnes of processing capacity, which would be a significant step up.

Lindy Hughson:
Finally, for APCO members watching this, what should they be doing now?

Richard Smith:
They should engage.

Reach out to SPSA or APCO, express interest, and start the onboarding process. Make sure internal stakeholders are aligned, and plan for it in budgets.

Support is available, and I’d be very happy to assist with those discussions.

Lindy Hughson:
It’s clear this is less about waiting for policy and more about shaping the system that will ultimately govern soft plastics in Australia. Richard, thank you.

Richard Smith can be contacted via email: richard.smith.10rs@gmail.com