The recycling crisis has brought the sheer scale of Australia’s waste management issues into perspective, but there may be a silver lining for facility managers, writes ENGEL SCHMIDL.
For decades, getting rid of Australia’s unwanted waste was a matter of ‘out of sight, out of mind’. In 2018, Australia exported close to 4.5 million tonnes of garbage overseas, much of it to China. And it wasn’t only Australia. The rest of the developed world was also exporting its plastics, paper and other waste to China.
This trade was a useful piece of business for all concerned. Developed nations had a dumping ground for excess waste and China paid reasonable prices for materials its inventive local manufacturers could turn into cheap goods for domestic consumers.
That changed when China implemented its National Sword policy at the start of 2018, plunging nations like Australia into a ‘recycling crisis’. The aim of National Sword, which evolved from the Chinese Government’s 2013 Operation Green Fence Policy, has been to tighten controls on waste imports and reduce China’s rubbish problems.
China restricted the importation of 24 streams of recyclable material and capped contamination levels for plastics at 0.5 percent. The new policy threw existing arrangements into disarray. The new regime struck plastic and paper commodity prices hard, with the cost of mixed plastics per tonne falling from around $300 to below $50. Most observers say there’s little chance of those prices returning to their pre-2018 heights anytime soon.
Deprived of their number one destination market, waste recyclers and exporters, along with governments and other waste industry stakeholders, have been scrambling to find ways to dispose of the waste China will no longer accept.
In Australia, the impact of the crisis has been most evident in Victoria, where one of the state’s major recycling processors, SKM Recycling, has gone out of business in dramatic fashion.
Sustainability consultant Nick Harford, the managing director of Equilibrium, says the upheaval has made stakeholders, including facility management businesses, more aware of the costs and risks involved in relying upon global markets.
“What has happened for the past 15 years is that Australia has enjoyed a long period of very good pricing around recycling, which lulled everyone into thinking this is how things are. Whereas if you want that service, there is a cost that comes with it,” Harford tells FM.
“You’re relying on the collector and recycler to be able to trade the commodity at a price that can keep the activity sustainable. We need to understand when we’re contracting these services that there is that risk, and the company that collects and sorts the material out can’t control that risk. It’s controlled by the end-user, the paper mill, the metal smelter or the plastics recycler. They are the ones who are going to manage that risk because they are the ones who will put the materials back into a value-added process.”
The recycling crisis has been disruptive. The public’s confidence in recycling has been shaken, businesses have gone bust, and local councils have had to send kerbside recyclables to landfill. However, according to waste and recycling industry experts, there’s a potential silver lining to the recycling crisis, especially for facility management businesses willing to think circular.
The emergence of the circular economy
“It is a real opportunity to bring the waste and recycling industry and materials management into the 21st century, and move towards a circular economy, which requires a completely different approach,” says Rose Read, CEO of the National Waste and Recycling Industry Council (NWRIC). The NWIRC is composed of nine national waste management companies and seven state and territory affiliates that collectively represent the interests of the more than 450 small, medium and global waste and recycling management businesses Australia wide.
The concept of the circular economy has emerged over the past decades and is now being taken seriously by governments and businesses around the world. In simple terms, the circular economy is about reducing our consumption and turning waste into a resource.
Canadian entrepreneur Tom Szaky is a leading proponent of the circular economy. The CEO of TerraCycle says it’s no longer business as usual for waste management. “The key thesis statement is we can’t just recycle our way out of the garbage crisis,” Szaky recently told US website GreenBiz.
“We need foundational changes. Our version of the foundational change is: How do we solve for disposability at the root cause while matching the benefits?”
Circular economy think tank the Ellen MacArthur Foundation defines it like this:
“Looking beyond the current take-make-waste extractive industrial model, a circular economy aims to redefine growth, focusing on positive society-wide benefits. It entails gradually decoupling economic activity from the consumption of finite resources and designing waste out of the system.”
The Federal Government released its National Waste Policy statement last year, with a strong emphasis on the circular economy. “Australia is moving towards a circular economy, with businesses and governments recognising the opportunities waste materials provide and the economic value they retain.”
State governments have also made significant headway in developing circular economy policies, with the NSW Government releasing its policy paper to generally positive reviews in February 2019.
The EU is bullish on the economic benefits too, with estimates that shifting to a circular economy will save €30 billion over 20 years through more efficient waste management and increase GDP by seven percent. It says up to 170,000 jobs will be created in the waste management sector by 2035, along with three million jobs in the broader economy.
Crucially, commercial waste managers are taking up the mantle. In Cleanaway’s FY19 Full Year Results media release, the company’s CEO, Vik Bansal, says, “Our mission is ‘making a sustainable future possible’ and as part of this we need to work towards developing a circular economy in Australia.”
“This will require changing the way products are designed, produced, sold and used to minimise waste and reduce environmental impact. A circular economy is impossible without a well-functioning waste management industry, underpinned by first-class infrastructure, credible and high-quality operators, robust government policies and initiatives and an educated community.”
Cleanaway is not alone, with international facility management businesses like Veolia and JLL making strides in recent years to create programs and build partnerships based on the circular economy. China’s National Sword decision and the subsequent recycling crisis have jolted many out of complacency and accelerated the circular economy’s momentum.
What FMs can do
Facility managers can play a vital role in shifting the commercial and industrial sectors closer to making the circular economy a reality.
“They have a lot more ability to influence people’s behaviour in their facilities than local councils, which are trying to manage waste from, on average, 16,000 households,” says Read.
“[Commercial and industrial] facility managers are also in a good position to manage the quality of the material that they’re making available for recycling by established well managed on-site source separation systems,” she says.
Dr Trevor Thornton, a lecturer in hazardous materials management at Deakin University and a waste management consultant, says source separation is crucial for facility managers if they want to start thinking about waste as a resource. “They need to understand the waste streams they are managing, ensuring things are going into the right bins and look at other things they might be able to implement. For example, do they have light bulb recycling and ewaste recycling?”
Thornton says the crisis is an opportunity to rethink the waste management chain from procurement through to disposal. He says waste reduction, product stewardship and sustainable procurement are all key factors.
“There’s a lot of opportunities for facility managers to be proactive. They should get a really good understanding of what types and volumes of materials are being generated. One practical example is if they’re having renovations done or building works, put in the builder’s contract they have to manage the waste to try and recycle or reuse as much as possible,” he says.
“Anything that can be done to encourage that purchasing of recyclables is a positive step.”
Digital technology like the Internet of Things, robotics and artificial intelligence also hold promise for innovation. Adopting smart bins, smart trucks, robotic sorting, mobile applications and other data analytical tools will enable facility managers to identify, track, manage and optimise waste streams for maximum efficiency and possibly even better profitability.
“This technology is also enabling greater sharing of furniture and office equipment, meaning greater reuse and more waste avoidance,” says Read.
“It comes down to how we consume products in the first place. We purchase what’s convenient, but we don’t think about what it’s made from or what happens to it afterwards. Whether it’s a business or an individual, addressing how we consume is the big challenge,” she continues.
“It’s a tough question because consumption and growth are key drivers of the Australian economy or any market economy. It requires new business models that move away from relying solely on selling more and more widgets and more towards providing services, leasing products and designing products that are more durable, upgradeable and repairable.”
The recycling crisis has been a painful wake-up call for the waste management industry. Signs are that businesses and governments have the right ideas about moving towards a circular economy. China’s move to clean up its backyard might just have spurred on countries like Australia to embrace the circular economy. Facility managers have a significant role to play in making this a reality.
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