What has happened?
A key piece of the Victorian government’s Waste to Energy Scheme (Scheme) is now in place under the Circular Economy (Waste Reduction and Recycling) Act 2021 (Vic) (Circular Economy Act) which will give project proponents for thermal waste to energy projects greater confidence to manage existing projects and develop new ones.
In June 2023, the government passed the Circular Economy (Waste Reduction and Recycling) (Waste to Energy Scheme) Regulations 2023 (Regulations) which has provided much needed detail regarding the Scheme to allow up to 1 million tonnes of permitted waste to be diverted from landfill for processing in waste to energy facilities. This Alert provides an update on current developments and what industry participants need to know about the new Scheme.
In September 2022, Part 5A of the Circular Economy came into effect to regulate thermal waste to energy processes, including:
- the definition of thermal waste to energy processes regulated by the Circular Economy Act;
- the granting of waste to energy licences for existing and future waste to energy facility operators.
- Cap licences to limit the volume of waste used in waste to energy processes.
Much of the detail concerning the types of waste that are permitted or exempt under the Scheme and the licensing process was left to the Regulations. The new Regulations now provide the certainty needed by project proponent to apply for waste to energy licences and develop new projects.
What is thermal waste to energy?
A thermal waste to energy process is a thermal process used to recovery energy from waste in the form of heat or to produce fuel from waste. Notably, a range of processes have been excluded from the ambit of the Scheme. Thermal waste to energy does not include the following:
- advanced recycling process.The Regulations prescribe that certain processes such as the processing of soft consumer soft plastics back into industrial-quality soft plastics is not captured by the Scheme; or
- biological waste to energy process:This covers a range of processes to convert organic matter into energy.This will rule out food organics processing and a number of other biological processes from the ambit of the Scheme; or
- landfill gas collection and combustion: Landfill gas collection is a common process that will be excluded from the Scheme; or
- incineration:The incineration of waste without energy recovery; or
- prescribed process:The Regulations now exclude certain pilot projects and pyrolysis processes such as biochar production which have proved popular in recent times for processing green organics.
The feedstock that can be used for a thermal waste to energy process is described in the Circular Economy Act and the Regulations as permitted waste. The types of permitted waste are described as waste that cannot reasonably be subject to further recycling and types of waste or waste prescribed by the Regulations. Permitted waste takes in municipal residual waste from kerbside collections as well as certain industrial waste that is source separated or that is not feasible to reuse. It is clear that the intention is for permitted waste to only be used if it no longer has any further prospect for re-use in the circular economy and is destined for landfill. Project proponents for a thermal waste to energy process will need to secure long term and stable supplies of appropriate feedstock in order to develop a thermal waste to energy facility.
The Regulations also now clarify that certain exempt waste may not be used for thermal waste to energy such as waste biomass from certain primary production or manufacturing facilities processes.
The Regulations provide much needed clarity regarding the scope of the Scheme regarding which types of waste are in or out. This added clarity is likely to provide the certainty that thermal waste to energy proponents have been waiting for.
What are the licensing requirements?
The Scheme establishes a licensing regime for existing operators and new proponents of thermal waste to energy facilities. The licensing regime is subject to an individual and an overall cap on the total volume of permitted waste that may be processed in Victoria.
Existing operator licences: An existing operator must have a current licence or permit granted under either the Environment Protection Act 2017, or Planning and Environment Act 1987. Additionally, that licence or permit must allow for the processing of permitted waste using a thermal waste-to-energy process, and have been in force immediately before 1 November 2021. The existing operator licences will allow early movers in the waste to energy industry to operate already established facilities and potentially expand them over time by seeking amendments to licences and conditions issued by the EPA.
Existing operators have until 30 November 2023 to apply for an existing operator licence.
Cap licences: Existing operators and new project proponents for thermal waste to energy facilities will need to obtain a cap licence from Recycling Victoria. The cap licences will be subject to an overall cap limit which specifies the aggregate amount of permitted waste in cap licences issued by Recycling Victoria. The cap limit will effectively limit the growth of waste to energy facilities in Victoria to a prescribed limit. The cap limit has not yet been legislated but is expected to be 1 million tonnes of permitted waste per year.
The Regulations now set out further detail regarding the application process for existing operator licences and cap licences, including a fit and proper person test for company directors or other officers who have control over the business.
The Regulations provide further detail on the amendment, suspension, revocation and transfer of waste to energy licences.
Expression of interest for cap licences are expected to be open in the near future.
The introduction of the Regulations for the Scheme is a significant step in the establishment of a new regulatory regime for thermal waste to energy facilities in Victoria.
Existing operators are being moved across to the new regulatory regime first and new applicant are expected to follow soon.
The Regulations provide greater certainty regarding the permitted waste types that may be used as feedstock for these facilities including municipal residual waste. Feedstock collectors such as local councils will play an important role in driving demand for these facilities over the long term. Thermal waste to energy proponents will need to demonstrate these facilities can be a viable economic and environmental alternative to landfill disposal.
How we can help
If you are interested in finding out more about waste to energy projects, project delivery models, and the approvals process, Russell Kennedy Lawyers’ waste and resource recovery team has the commercial projects and regulatory approvals expertise to assist.
If you require any further information, please contact Kyle Gillan, or Stefan Fiedler.
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