Australian packaging leader calls for mandated recycled content

The head of Australia's largest plastic packaging company wants the federal government to mandate a percentage of recycled content for plastic products as well as tax manufacturers that fail to meet the target.

Sanjay Dayal, CEO and managing director of Melbourne-based, publicly listed Pact Group Ltd., told Plastics News the Australian government "needs to introduce regulations with a combination of financial penalties for those that don't comply and incentives for those that do."

He said Australia's 2025 national packaging targets "will not be achieved, particularly for plastics, which is disappointing. These targets are voluntary so incentive to act is based on company willingness."

The voluntary targets were set by an industry-led group, the Australian Packaging Covenant Organization (APCO). Between 2017 and July 2021, according to statistics on APCO's website, 72 brand owners ceased to be APCO members for "noncompliance."

The targets are to achieve 100 percent reusable, recyclable or compostable packaging; 70 percent of plastic packaging being recycled or composted; 50 percent of average recycled content included in packaging; and the phase out of problematic and unnecessary single-use plastics packaging by 2025.

"Strict packaging design requirements or standards would force producers and brand owners to take responsibility for their products and grow the [domestic] recycling industry," Dayal said.

"When industry as a whole commits to making change, we all stand to gain from lower costs, more reliable supply, and a boost in confidence from increasingly conscious consumers," he added.

Dayal is urging the Australian government to model regulatory frameworks in place in Europe, the United Kingdom and the U.S. "A mandated push will ensure businesses who are lagging are incentivized to take the necessary steps to catch up to industry leaders," he told Plastics News.

Jeff Angel, director of the Sydney-based Boomerang Alliance, a group of 55 environmental groups, has backed Dayal's call. Asked whether Australia should follow the European Union lead and mandate a percentage of recycled content for all plastic products, he said: "Absolutely, it's the economic underpinning for a sustainable reprocessing sector. If producers don't meet the recycled content standard, they should be fined or taxed."

Angel wasn't confident Dayal would get support from other plastic product manufacturers, saying: "Some might. Others are still coming to grips with the public and political cost of failed voluntary schemes like APCO. But we need business leaders like Sanjay to push their sector along because the plastics industry is losing its social license to operate."

Australia's state, territory and federal environment ministers met on June 9 and agreed to mandate plastic packaging design standards and targets for recycled content, but their joint communique issued after the meeting did not include specific percentages.

The ministers said they will implement "a new packaging regulatory scheme that will, for the first time, develop mandatory packaging design obligations, so packaging is designed to minimize waste and be recovered, reused, recycled and reprocessed."

Waste Management and Resource Recovery Association CEO Gayle Sloan said the announcement is "a great start" to create a level playing field for virgin and recycled materials. She said it is important the recycled content be Australian and not imported.

Denise Hardesty, a CSIRO senior scientist and plastic pollution expert, said a key barrier to recycling plastics was the difficulty of separating multiple polymers that may be within one item. Simplifying polymer types "would increase the ease of recycling and retain the value from plastics."

Professor Thomas Maschmeyer, from the School of Chemistry at the University of Sydney, said a multi-parameter approach is needed.

"A possible vision of returning 50 percent of plastic waste back into the circular economy by chemical recycling and 20-30 percent by mechanical recycling with the intractable remainder being burnt to generate heat would be a world-leading outcome," he said.

But Associate Professor Thava Palanisami, from the Environmental Plastics Innovation Cluster at the University of Newcastle, said mandating recycled plastics "contradicts existing scientific evidence. Research has shown that recycled plastics contain more than 100 different toxic chemicals and concentrations are far higher than in virgin plastics."

Dayal suggests a mandated 30 percent of recycled content in plastic packaging and says currently "there is an average of just 3 percent recycled content in all plastic packaging" and only 18 percent of plastic is recovered for recycling.

He said: "Our own research shows 80 percent of Australian consumers are concerned about the environmental impact of their waste, even if they recycle it."

Angel agrees with Dayal that 82 percent of post-consumer plastic goes to landfill and says what is recycled is usually for low-value purposes. "We also need to add commercial plastic waste like business-to-business packaging to the plastic waste mountain," he told Plastics News.

Dayal said currently not all plastic resins can easily accommodate higher levels of recycled content than 30 percent so the industry must continue to innovate to increase recycled content wherever possible. "There is already a considerable amount of recycled content in food, beverage and medicinal product packaging."

He said the 30 percent target should lift as technology advances and Australia gets more recycling facilities. "We would like to see greater investment in new facilities and circular economy supply chains. Additional government investment and finance opportunities through grants and procurement settings will encourage businesses to take the leap into developing new systems that meet strict requirements."

Dayal told Plastics News: "Unfortunately, recycling infrastructure in Australia does not currently have capacity to process the quantity of material placed on the market or produce the required amount of resin to meet the recycled content targets for plastics. Regulation needs to consider the waste collection systems, including state-based container deposit schemes and recycling infrastructure."

Gayle Sloan, CEO of the Sydney-based Waste Management and Resource Recovery Association of Australia, this week wrote to Federal Environment Minister Tanya Plibersek asking the government to establish an effective, industry-funded extended producer responsibility (EPR) scheme for soft plastics, which she suggested should extend to all packaging.

Sloan said manufacturers had, "for too long, avoided responsibility for end-of-life product management," instead shifting the burden to municipal councils.

Sloan also suggested the government impose a tax on virgin plastic resins similar to Australia's product stewardship for oil scheme, which imposes a levy on all oil-based lubricants. The funds raised go to oil re-refiners.

She urged Plibersek to draw on the "numerous global examples, especially in the European Union, of funded, effective packaging EPR schemes, including schemes that fund the construction and upgrade of facilities to sort and reprocess materials."

Pact operates five plastic recycling facilities — three in New South Wales (NSW), one in Queensland and one in Victoria.

One is a joint venture, Circular Plastics Australia (CPA), with Cleanaway Waste Management Ltd., Asahi Beverages, a unit of Japan's Asahi Group Holdings, and Coca-Cola Europacific Partners plc. The PET recycling facility, in Albury, NSW, began operating in early 2022.

A Pact spokesman said the CPA facility is the biggest recycling plant of its kind in Australia and has the capacity to recycle about 20,000 tons of PET a year, or the equivalent of about 1 billion 600ml PET beverage bottles collected through container deposit schemes and curbside recycling.

A second facility, under construction in Altona North, in Victoria, is scheduled for completion by December 2023 and will recycle similar quantities of PET into food-grade PET resin, which is used by Asahi and Coca-Cola to make new beverage bottles and by Pact to make food packaging, all of which is 100 percent recyclable.

Pact and Cleanaway also are nearing completion of an high density polyethylene and polypropylene recycling plant in Laverton, Victoria. Pact's spokesman said it will also process 20,000 tons a year of containers collected via household recycling bins.

He said Pact is investing about A$76 million (US$51.2 million) in new equipment and facility upgrades at operations in NSW, Victoria, Queensland and Western Australia, with the support of a A$20 million (US$13.5 million) Federal Government grant.

As well as the CPA and Cleanaway joint ventures, they include upgrades to national dairy packaging equipment at facilities in those four states to enable up to 50 percent recycled content for HDPE milk bottles; upgrades to Sulo-brand mobile garbage bin manufacturing facilities in NSW and Victoria to increase production capacity to support the rollout of "four bin" waste management and increase recycled content to 80 percent from the current average of 30 percent.

Four bin waste management is red bins for garbage that goes to landfill, yellow for plastic and other recyclable containers, green for vegetation, and blue for paper and cardboard.

Pact is also upgrading industrial packaging manufacturing plants in three states to increase recycled content in its plastic paint pails and plastic cubes used in agricultural chemical and industrial applications.

Dayal said Pact has committed to eliminating all non-recyclable packaging it produces and including an average 30 percent recycled content across all its packaging by 2025.