Key sectors that will catalyse the Australian circular economy

Australia’s ban on waste exports commenced on January 1, 2021 (Fig.1), marking a milestone in the progression towards a circular economy and the responsible management of our waste resources.

However, the export bans only scratch the surface of Australia’s circular economy opportunity. With many other materials heading to landfill, we are still missing out on the economic benefits of keeping them in productive use longer while addressing the nation’s waste problem.Timeline of Australia’s waste export bans

Figure 1: Timeline of Australia’s waste export bans. Sources: National Waste Report 2020, NSW Circular

The Australian Bureau of Statistics’ latest Experimental Waste Account statistics show that Australia generated over 75 million tonnes of waste in 2018-19. They also show the four materials — glass, plastics, tyres, and paper and cardboard — on the export ban list represented 32 percent, or 1.5 million tonnes, of the total 4 million tonnes of waste exported that year: which has ignited momentum for substantial new investment in Australian recycling infrastructure. 

Looking beyond our exported waste, there is an even more significant onshore opportunity for materials recovery and emissions reduction that is five times the size of the waste export market: the 20 million tonnes of materials that go to landfill every year in Australia. 

Moving the dial 

The sheer volume of materials being disposed of onshore flags a significant opportunity for investment beyond those on the banned list. Some of the biggest opportunities are in organics, masonry and plastics, which together make up over half the materials currently going to landfill.

Where are some of the largest opportunities?

Figure 2: Opportunity areas by material type. Sources: National Waste Report 2020, NSW Circular

But better recycling will not deliver a more sustainable economy without concurrent actions to drive the recirculation of these recovered materials back into the economy. Fortunately, the data also gives clear pointers towards key sectors that play a significant role in moving the dial in our progress towards a circular economy.

Resources going to landfill in Australia

Figure 3: Resources Breakdown of materials going to landfill in Australia 2018-19 (2018-19) [interactive chart] Sources: ABS Experimental Waste Accounts,

NSW Circular analysis

Key sectors that will catalyse the circular economy

Infrastructure can lead the way

Australia’s waste generation has risen by 10 per cent in the two years to 2018-19. Building and demolition activity, in particular, has been a key driver of this increase: not entirely surprising given the national infrastructure boom in recent years. This is expected to grow even further in the coming years with additional state and federal government stimulus measures contributing to a record-breaking $300 billion public infrastructure pipeline across the country.

Trends in NSW waste generation by key material types

Figure 4: Trends in NSW waste generation by key material types [interactive chart] Sources: National Waste Report 2020, NSW Circular

Infrastructure development also presents a significant opportunity to deploy recovered materials. This delivers multiple benefits: from reduced waste transport costs and landfill fees, environmental benefits of reusing low-impact materials, to harvesting the commercial value and demand for sustainability certifications such as Green Star ratings (the environmental certification for buildings set by the Green Building Council of Australia that incentivises the use of sustainable practices and products in the property sector).

This growth in local experience and credentials in circular design are consequently invaluable informing larger scale upcoming precincts such as the Western Sydney Aerotropolis, and other projects in NSW’s $107 billion infrastructure pipeline.

Regional circular economy precincts in NSW

Image: NSW Government

Regional development strategies are particularly well suited to planning with the circular economy in mind. Communities with remote and decentralised industry, energy and water systems already know the benefits of local closed loops in using locally available resources, and minimizing transport costs. Agricultural and mining communities, for example, are constantly being challenged to adapt to climate change, resources depletion and high production costs.

Special Activation Precincts such as Parkes (which will be Australia’s first UNIDO Eco-Industrial Precinct embedding the principles of circular economy and sustainability) are ideal for embedding circular economy in precinct planning.

Households and the circular economy

Despite accounting for only 16% of total waste generation, households generate the highest amounts of food and garden waste, plastics, and textile waste.

Figure 5: Household waste generation. Sources: NSW Circular analysis

According to Rabobank’s 2020 Food Waste report, 13% of Australians’ weekly grocery shop becomes food waste. This is akin to the average Australian household throwing away $1,043 per year (and $10.3 billion nationally) into the bin as food waste.

Australians households collectively paid $600m to manage their waste in 2018-19. If households and local councils are able to substantially reduce and repurpose even only their food and garden waste – whether by composting or anaerobic digestion – this will go some way towards not only long run savings, but also reducing the 8 Mt of greenhouse gas emissions from solid waste in landfill annually.

And households can not only reduce their household expenditure by reducing their waste. They can also catalyse circular products and markets but directing their buying habits towards sustainable goods, such as clothes, toys and other consumer products using recycled materials.

Sources and fates of key problem waste materials in NSW

Figure 6: Sources and fates of key problem waste materials in NSW (2018-19) [interactive chart] Sources: NSW Circular analysis

Manufacturing: creating new jobs, new circular supply chains

The events of the past year have highlighted the immense value of the local manufacturing sector, as global shocks to economic activity, border controls and logistics have led to massive supply chain disruptions globally. But supply chain resilience relies not just on the best local manufacturing facilities with the best technologies.

What happens when the flow of input materials — such as critical metals, plastics and other petrochemicals – is disrupted?

The circular economy can be the key to not only at building up Australia’s manufacturing self-sufficiency, but our materials sufficiency.

For example, fifty per cent of Australia’s exported waste is actually metal. Each year, we send over $2 billion worth of metal waste offshore for recycling. This includes not just scrap heavy metals but also discarded wiring and e-waste, for example. In 2019-20 alone, Australia exported over $350 million worth of waste copper, $150 million of waste gold and platinum, and $15 million of waste nickel.

Ironically, many of these are critical materials for modern and high-value technologies necessary for a modern decarbonised economy: mobile phones, batteries, solar power systems, and so on (as highlighted in a recent report by the NSW Office of the Chief Scientist).

Thriving local recycling industries in critical materials can potentially offer more secure and sustainable access to input materials. This is particularly important where finite — and valuable – raw materials are involved, such as copper, nickel and lithium. With sufficient critical mass, recycling materials can not only mitigate the economic and environmental costs of mining virgin materials, but also increase the productive lifecycles of materials already in circulation.

Redeployment of used materials is key to a more resilient economy

Figure 7: Recycling performance of key waste materials in NSW (2013-2019, % recycling rate) Sources: National Waste Report 2020 and NSW Circular

Thoughts for 2021

To capitalise on these circular economy opportunities for materials recovery, further research is important to inform the development of new sustainable markets for recycled products to solve both technical and non-technical problems. As a start, NSW Circular has established a research taskforce bringing together key NSW universities and research organisations to work together to remove barriers to the circular economy.

With the new year, there has never been a better time to focus on turning our waste problem into an opportunity for a stronger, more sustainable Australian economy.