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Australian government supports continuing Australian Packaging Covenant

Australian government supports continuing Australian Packaging Covenant, Asia packaging, Australia packaging, packaging waste management, packaging recycling
The Australian government has released the Packaging Impacts Decision Regulation Statement (DRIS) that recommends the continuation of the Australian Packaging Covenant (APC) as the best system to manage packaging waste and recycling.

The release of the document concludes a four-year study that investigated a number of national options to managing packaging waste and litter reduction.

The DRIS conducted a cost-benefit analysis to consider the economy-wide impacts of each option, as well as a distributional impact analysis of the financial impacts on relevant stakeholder groups

In the end, the DRIS recommended “an increased voluntary funding commitment by the packaged goods industry under an extended Australian Packaging Covenant-type arrangement of A$50 million per year for five years which, over the full 20 years of the analysis, results in an average industry investment of S$27.7 million annually.”

What this would achieve is a 78.5% packaging recycling rate by 2035 and reduce the average annual amount of litter from the base case by 377,800 tonnes or 23% by 2035.

The DRIS stated this approach “achieves cost-effective recycling and litter outcomes because it is non-prescriptive in how outcomes can be achieved and not constrained by mandated sub-targets to recycle certain packaging types, which may be of low value or low environmental impact.

“Rather, it allows industry to select cost-effective opportunities to achieve the outcomes and a flexible and adaptable approach that is better able to respond to changes in the market and operating environment,” DRIS explained. “It also has relatively low government administration costs, based on existing co-regulatory arrangements under the Used Packaging Materials NEPM.

“The design of the co-regulatory arrangement also optimises outcomes because it targets all packaging and allows engagement of all participants along the supply chain, from design and manufacturer to end of life disposal.”

Interestingly, the DRIS rejects a A$8 billion container deposit scheme (CDS) as the least affordable option, incurring the greatest net cost to the community compared to other options due to the need to roll out purpose-built infrastructure nationwide to manage item-by-tem refund payments for over 12 billion containers each year. In addition, the re-routing of material into an alternative recycling system increases costs significantly and generates minimal benefits, particularly since about 75% of the beverage container recyclate targeted is glass.

The only real major pro for CDS is that it achieves the highest litter reduction impact by tonnage, the DRIS found, because it involve direct price incentives to return beverage containers, which comprise 60^ of public place litter by weight.

Another option examined by DRIS was a mandatory advance disposal fee system; it was concluded that while such a system would deliver higher overall benefits in recycling improvements and litter reduction than even the extended-APC system, the costs involved is “substantially higher”, hence leading to lower net present value and benefit cost ratio.


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