Three trends mark the current state of the Australian waste management industry: growing interest in waste-to-energy, the need to counter commoditization, and new ways of coping with the challenge of food and garden organics.
Waste Management: Waste-to-Energy
Waste-to-energy is prevalent in Western Europe due to the European Community’s ban on organic waste going into landfills and is now becoming more widespread in the United States. Australia has been slower to adopt waste-to-energy processes because landfill remains the dominant form of waste management.
But, due to growing community resistance to landfill and a variety of economic and political factors, that’s changing. With several projects now underway throughout the country, waste-to-energy is deemed virtuous because it offers the ability to generate baseload electricity as well as create business opportunities that can support long-term investment. That second element is important because while 80% of waste material is easily recyclable, something must be done with the remaining 20% for the process to be viable.
In addition, technological advances will make make smaller systems viable — those that can process 50,000 or 60,000 tons of waste instead of 150,000 tons, as has been the norm in the past. Also, the political push to make Australia less dependent on foreign resources is creating opportunities for domestic companies to use recycled material as the raw product in manufacturing. Visy is an extraordinarily good secondary manufacturer of product in Australia and is increasing its activities, as is Orora.
Therefore, waste-to-energy systems will become more viable and will grow in Australia.
Waste Management: Commoditization
There are two key points to emphasize regarding commoditization. One is that the industry has commoditized its commercial and industrial logistics components. Everything now revolves around the per-cubic-meter or a per-liter lift cost. As a consequence, everyone focuses on cost, which has resulted in the rise of brokerage. Fit-for-purpose systems are sometimes ignored.
Twenty years ago, there was no brokerage in Australia’s waste management industry. I was an early promoter of brokerage, which reduced the cost of waste/recyclable collection. But for lower collection costs to make sense within the system as a whole, commodities collected as curbside recyclables must have value downstream. Initially, that was the case with the cardboard, aluminum, steel, copper, and other material coming out of curbside recyclable bins. Reduced prices promoted the exporting of curbside recyclable commodities, which in turn made it more difficult to run secondary manufacturing processes in Australia.
For example, paper and cardboard manufacturing used to occur in every state of Australia except South Australia. Now it is confined to New South Wales and Victoria.
In Australia, waste management probably costs communities about one-third of what communities in Western Europe pay. This value chain creates cleaner and specific products from the waste streams.
This leads to the second point about commoditization. Low-cost collection is a hard habit to break. But if viable recycling is to occur, change must take place. This recognizes that local governments deem recycling as an essential industry and charge more for it. This will provide a more viable domestic recycling business sector.
Waste Management: Food and Garden Organics
Finally, there is the issue of food organics and garden organics, or FOGO, which is quite different in the Southern Hemisphere than in the Northern Hemisphere due to large variances in infrastructure and the vegetation itself. There are very different types of green waste in Australia as you move from temperate areas into subtropical environments. In addition, the climate leads to increased odor issues.
Various attempts at FOGO processing in Australia have met mixed results. But there is now a clearer vision of how to make it work. Tunnel composting — a static biological process using forced aeration — is costly, yet it works and is likely to become standard in Victoria as well as in New South Wales. But once you get to Queensland, odor remains a problem. There’s a long way to go, and many infrastructure changes and cost recalculations to be made, before FOGO not only is community-accepted but also commercially viable.
That same need for infrastructure changes and a rethinking of economics can be said to exist for the waste management industry in Australia as a whole.
About Bret Collins
Bret Collins is a GLG Network Member and former Chief Operating Officer of Remondis Australia Pty Ltd. Before becoming COO, he held a variety of roles at Remondis, including General Manager and Manager of Information Management Systems. Earlier, he spent 16 years at Theiss Services and held key waste management roles at Industrial Services, Pacific Waste Management, and Richardson’s Waste Management over his 35 years in the Australian waste management industry.
This waste management industry article is adapted from the GLG Remote Roundtable “Waste Management in Australia.” If you would like access to events like this or would like to speak with waste management experts like Bret Collins or any of our more than 900,000 industry experts, contact us.