Productivity Commission: Opportunities for Creating a Circular Economy

Productivity Commission: Opportunities for Creating a Circular Economy

ANZRP was very pleased to see that the Federal Government has resolved to examine opportunities in the domestic circular economy to improve materials productivity and efficiency in ways that benefit the economy and the environment. The Productivity Commission conducted an inquiry to identify priority circular economy opportunities and advise on how best to measure progress and address barriers. ANZRP responded to this investigation, capitalising on our knowledge and experience, and putting forward ideas that will help take Australia’s circular economy forward.

What is the circular economy?

Whilst circular economy definitions may vary, the basic premise remains the same. The Productivity Commission describes it as being “an economic strategy that maintains the value of materials for as long as possible and ensures materials are used efficiently across all phases of their life cycle”. In essence it is a model of resource production and consumption that involves sharing, leasing, reusing, repairing, refurbishing, and recycling existing materials and products for as long as possible. Aims of a circular economy are to tackle global challenges such as climate change, biodiversity loss, resource depletion, waste, and pollution.

What is motivating Australia to act now?

International studies suggest that a more circular economy supports higher economic growth and productivity, including by increasing materials productivity (how much output is produced per unit of raw input). Australia currently has the fourth lowest rate of materials productivity amongst Organisation for Economic Co-operation and Development (OECD) countries[i]. According to the Productivity Commission we generate USD 1.20 of economic output for every kilogram of material consumed, which is under half the OECD benchmark of USD 2.50.

The Minister for the Environment and Water’s Circular Economy Advisory Group has identified commercial, regulatory, information and other barriers to achieving a more circular economy, and opportunities for Australia to improve economic and environmental outcomes through greater materials productivity and efficiency. With this in mind, Australia’s Environment Ministers have committed to accelerate the transition to a circular economy by 2030.

The terms of reference in a nutshell

The inquiry conducted by the Productivity Commission sought views on the following four aspects:

• Circular economy success stories and measures of success
• Priority opportunities to progress the circular economy
• Hurdles and barriers to a circular economy
• Governments’ role in the circular economy

ANZRP recommendation highlights

In response to circular economy success stories, ANZRP took the opportunity to profile our joint venture with CRDC Circular Solutions (CRDC) to build a plastics recycling plant in Melbourne. The purpose of CRDC is to create value from hard to recycle soft and hard plastic waste by using this to produce RESIN8^TM – a high performing and versatile mineral polymer that can be used in a variety of concrete and asphalt applications. In doing so this delivers numerous economic and environmental benefits. More information on this initiative can be found at CRDC Circular Solutions (Australia) | ANZRP.

Key amongst ANZRP’s recommendations for building on Australia’s circular economy are:

• Foster greater design for circularity to make sure that products (and the materials they are made from) and placed on the Australian market remain valuable and useful in their next product lifespan or reincarnation.
• Establish and mandate (minimum) product design standards in line with international best practice for consumer and industrial products which address product durability, repairability, use of recyclable parts and materials, use of by-products and recycled content, use of renewable materials, avoidance of toxic or hazardous materials and use of traceable components.
• Strengthen and develop sustainable procurement frameworks.
• Expand product stewardship solutions, prioritising batteries, underpinned by appropriate regulation which is robustly enforced to mitigate the adverse impacts of free riders and/or sub optimal outcomes.

ANZRP has also called on the Federal Government to expedite the expansion of the National Television and Computer Recycling Scheme (NTCRS) and include small electrical and electronic equipment (SEEE) as well as an amendment which allows for reused e-waste to be counted in scheme targets. This should include amendments to the Basel Convention allowing the Transboundary Movement of Used Electrical and Electronic Equipment (UEEE) for Repair, Reuse, and Refurbishment. Establishing a repair operation in Australia is notably expensive and therefore necessitates a strategic approach to sourcing products or parts. By developing a framework that allows the movement of these materials to non-OECD countries where many of our Original Design Manufacturers (ODM) and Original Equipment Manufacturers (OEM) are based—we can optimise operations and outcomes. This would enable industry to send refurbished units back to Australia for replacement or resale, thereby promoting sustainability while reducing operational costs.

[i] Terms of reference – Circular economy and material productivity – Productivity Commission