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Closer to a Circular Economy – New environmental legislation in Victoria

06 September 2022

5 min read

#Property, Planning & Development

Published by:

Christopher Watt, Jacob Atkinson

Closer to a Circular Economy – New environmental legislation in Victoria

Waste management and recycling have been pressing policy challenges in Victoria following China’s National Sword Policy which blocked the import of foreign recyclable waste in 2018 (a move followed by other developing countries) and the collapse of SKM Recycling in 2019, which handled more than half Victoria's recycling.

In response, the Victorian Government issued the Recycling Victoria: A new economy policy in 2020 (Recycling Policy). The Recycling Policy has an overarching aim of “waste less and recycle more” via “a circular economy” that promotes the use and reuse of products for as long as possible and accounts for their full environmental impacts. To achieve this, the Victorian Government passed the Circular Economy (Waste Reduction and Recycling) Act 2021 (Circular Economy Act).

The Circular Economy Act established the Head, Recycling Victoria, a position with broad powers to:

  • administer a container deposit scheme.
  • oversee and develop municipal residual waste, recycling or resource recovery service delivery.
  • support best practice waste services procurement and contract management by councils Alpine Resort Management Boards and service providers.
  • advise on best practices for waste, recycling and resource recovery services.

The Circular Economy Bill

The Environment Legislation Amendment (Circular Economy and Other Matters) Bill 2022 (Bill) is currently before the Victorian Parliament and seeks to further reform Victoria’s waste and recycling system. The Bill will give effect to the unlegislated key commitments of the Recycling Policy by amending the Circular Economy Act and other legislation.

The Bill is expansive. Some of its key features are outlined below.

New waste to energy scheme

Waste to energy provides for the conversion of waste into useful energy resources such as heat, electricity, gas and liquid fuels. The Bill will shift the current scheme regulating waste to energy under the Environment Protection Act 2017 (Vic) (EP Act) to the Circular Economy Act. The scheme will be administered by the Head, Recycling Victoria. The most significant reform under the new scheme is the cap limit on how much waste can be used for waste to energy operations in Victoria via cap licences. The addition of all issued cap licences must not exceed the prescribed maximum cap limit (expressed in tonnes of waste per financial year). The cap limit would be prescribed by regulations following passage of the Bill and will initially be one million tonnes per year. Existing operators are not subject to the cap limit under transitional existing operator licences but as those licences expire a cap licence will be required. The Bill will also add to Schedule 1 of the Climate Change Act 2017 (Vic) so that decisions of Head, Recycling Victoria made in relation to the new waste to energy scheme must account for climate change.

Victorian Recycling Infrastructure Plan

Head, Recycling Victoria has functions to plan waste infrastructure and associated risk management. To achieve this, the Bill would establish a new Victorian Recycling Infrastructure Plan (Plan) as a recycling infrastructure planning regime that is to be prepared by Head, Recycling Victoria. The Plan would be a single 30-year strategic plan for Victoria’s waste, recycling and resource recovery infrastructure at State, regional and local levels. Existing waste plans (the State-Wide Waste and Resource Recovery Infrastructure Plan and the Regional Waste and Resource Recovery Implementation Plan) under the EP Act will be repealed. The Plan will (amongst other things) list the future waste, recycling and resource recovery infrastructure (other than landfill) needed for Victoria. The Plan represents an overarching, long term vision for the waste and recycling industry in Victoria to guide investment and provide certainty to operators.

New Enforcement Powers

The Bill would add a new compliance tool in the form of Monetary Benefit Orders. If a court is satisfied that a person has committed an offence against the Circular Economy Act, Head, Recycling Victoria would be able to apply for a court order for the offender to pay an amount up to the amount of any monetary benefit acquired from the offence. Similar court orders are available under section 329 of the EP Act.

Effects on existing legislation

The Bill would amend the EP Act to fund Head, Recycling Victoria with the funds collected from the waste levy under that Act. This is an example of the circular economy where waste producers pay a levy which funds recycling and waste recovery under the new regulatory regime.

The Bill also introduces a provision into the EP Act to expand cost recovery powers of the EPA by displacing the Corporations Act 2001 (Cth) provisions which allowed companies to disclaim land, including any liabilities associated with that land, such as obligations to clean up or comply with remedial notices. The Bill also amends the Sustainability Victoria Act 2005 (Vic) to empower Sustainability Victoria to share information for purposes relating to environmental sustainability, environment protection and the circular economy.

Cumulatively these amendments would represent a substantial refinement to the regulatory environment of Victoria’s waste and recycling industries. The reforms will expand the role of Head, Recycling for Victoria, strengthen environmental enforcement powers, provide for long term policy guidance for the waste industry and most significantly establish a robust waste to energy regulatory framework.

If you have any questions about the Bill or legislation, please contact us below or send in your enquiry here.

Authors: Joseph Monaghan, Christopher Watt & Jacob Atkinson

The information in this article is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavour to provide accurate and timely information, we do not guarantee that the information in this article is accurate at the date it is received or that it will continue to be accurate in the future.

Published by:

Christopher Watt, Jacob Atkinson

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