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Closer to a circular economy – New environmental legislation in Victoria – Waste Management

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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

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

  • 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

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
) 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.

This publication does not deal with every important topic or
change in law and is not intended to be relied upon as a substitute
for legal or other advice that may be relevant to the reader’s
specific circumstances. If you have found this publication of
interest and would like to know more or wish to obtain legal advice
relevant to your circumstances please contact one of the named
individuals listed.

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