The challenges Australia is facing to improve recycling rates are multifactorial and require a big step up in collection, processing, logistics, and innovation. Given the scale of the issue, and the speed of action required, regulation is quite likely unless industry moves fast to self-regulate.

The weaknesses currently in our recycling system are three-fold.

The first challenge Australia faces is processing. For soft plastics, the REDcycle program should never have been allowed to collapse given its importance as a pseudo soft plastic stewardship scheme to achieving our National Packaging Targets. All companies using soft plastics, particularly in the FMCG context, and supermarkets need a stewardship scheme that gets the plastic that has been put into the market, back for processing.

Lessons need to be taken from the REDcycle collapse – a program that could and should have been saved. Now a new well-funded, well-managed product stewardship scheme is needed and there is very little time for stakeholders to act.

Secondly, we need to create stronger market demand for materials made from recycled soft plastics, to ensure there is a reliable pipeline of buyers. We need to create incentives for relevant businesses to build these materials into their manufacturing. Balancing supply and demand will avoid a repeat of the REDcycle collapse and make a fully-fledged curbside scheme more viable.  

The third challenge is collection. With only a small minority of the population using REDcycle, that is to say, few people brought their soft plastics back into the supermarket collection points. Collection is a critical part of the process, and the experience showed that most people are not willing to add this extra step to recycling.

Curbside collection – which makes it easier for residents to recycle – is the most scalable and failproof solution and trials in certain councils are currently underway. Key to the success is supporting households but also holding them to account for the management of their waste. If we don’t get it right with households, the whole chain fails, but we also miss a huge opportunity. EY’s Finding Treasure in our Trash Report found that by not taking advantage of curb side recycling, Australia is wasting an opportunity worth up to $324 million per year.

However, let’s not forget that recycling is only part of the solution to Australia’s waste challenge. Currently, only 7% of the world’s plastic is recycled. We need to rethink packaging design and plastic solutions themselves.

We need solutions that are compostable to play a bigger role in today’s packaging, which sees less plastics entering the system in the first place.

What does this mean for Australian businesses?

FMCG brands and supermarkets will need to step up their efforts in the absence of REDcycle, rethink their packing solutions, and demonstrate that any materials that go into the market can either be compostable or be brought back for processing with minimal environmental impact.

This needs to be done well and consistently, but given the scale of change required, regulation may be imposed unless industry moves quickly to set up a voluntary self-regulated scheme to meet the 2025 National Packaging Targets.

Terence Jeyaretnam is EY leader and partner at Climate Changes and Sustainability Services.