In December 2024, the Australian federal Department of Climate Change, Energy and the Environment and Water published the first national Circular Economy Framework. This framework highlights the need to double the country’s circularity rate by 2035.
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The modelling study by CSIRO indicates that within the next decade, committing to the ambitious goal of this framework can result in several positive outcomes.
These include adding an annual $26 billion to the country’s GDP; a reduction in greenhouse gas emissions by 14 per cent; and an annual diversion of 26 million tonnes of materials from landfills. More importantly, the framework rightly highlights the necessity of embracing a circular economy to unlock a future that secures Australia’s natural wealth for generations to come.
Circularity in the built environment sector through recycled content
In the framework, the built environment is emphasised as a priority sector, accounting for one-third of global resource consumption and serving as the principal destination for materials in Australia. Alongside refurbishing and adaptive reuse, prioritising the use of sustainable construction materials, including products with recycled content (PwRC), is strongly encouraged to drive the sector’s shift towards a circular economy. This strategy is gaining traction and is being adopted in multiple construction projects nationwide.
The framework proposes that the optimal utilisation of resources can be achieved by fostering PwRC markets. However, developing end-markets for PwRC isn’t easy, as it’s affected by various internal and external factors that we identified in our earlier research.
Everyone has a role to play
An interesting aspect of the framework is its inclusive approach, which involves not just the government but also industry, investors, communities, NGOs and academics. It stresses that managing waste and using resources sustainably is a shared responsibility, which is key to making the circular economy work.
The framework specifically highlights the government’s role in creating supportive policies:
“Policymakers set the direction and provide the foundation for a successful transition to a circular economy. Governments can create the conditions that allow circular systems to thrive by implementing supportive policies, providing financial incentives, and encouraging collaboration and behaviour change across sectors”.
That being said, Australia is still in the early stages of developing such policies, especially those aimed at boosting the use of PwRC. It’s still not very clear what specific policies should be introduced, reformed or abolished, how effective they have been or will be, and how the industry would respond to them. This is where we played our role in supporting the government with the knowledge needed to transition. In our recent research project supported by the Sustainable Built Environment National Research Centre, we aimed to shed light on these challenges.
“Academia plays a role in exploring new materials, technologies, and business models that can accelerate the shift to a circular economy. By investing in research focused on the priorities of this framework and Australia’s National Research and Science Priorities, academia can support businesses and governments with the knowledge and tools needed to transition” – Australia’s Circular Economy Framework.
What we know about circular economy policies?
In the research, we identified 17 circular economy policies that can directly or indirectly influence the optimal use of PwRC in the built environment sector. We sought the opinions of 62 stakeholders across the board to surface the characteristics of these policies. What we learned from the analysis of responses to the survey was not quite what we expected. First, we realised that only 35 per cent of respondents believed that the current policy set-up in Australian states and territories supports the optimal use of PwRC in the sector.
Our study revealed a notable lack of stakeholder awareness about certain circular economy policies, particularly the demolition Deposit-Refund Scheme, with only about a quarter of participants familiar with it. Other under-recognised policies included the Waiver for Recycling Residual Waste, the Proximity Principle, and Harmonised PwRC Specifications. Addressing this gap requires raising awareness and advocating for change by industry peak bodies and NGOs, as outlined in the framework.
“NGOs can act as a bridge between the public, policymakers, and businesses by raising awareness about the benefits of circularity and holding stakeholders accountable for progress. Through campaigns, reports, and community engagement, NGOs help drive the cultural and behavioural shifts needed to make circularity mainstream.”
Thirdly, most respondents felt that some or all of the policies should be implemented at the national level. This aligns with the proposed framework, which emphasises the importance of adopting national regulations across the country.
“National efforts are most effective when circular economy principles are embedded across key programs and policies, especially in materials-intensive industries like those prioritised in this framework. Regulatory alignment …is crucial to scaling markets for circular goods and services and reaching Australia’s targets.”
In line with the framework’s second sectoral enabler for the built environment, the study identified the top five policies to drive demand for PwRC: Virgin Material Tax, Extended Producer Responsibility, Financial Incentives, Carbon Pricing Scheme, and Sustainable Procurement. Some of these policies are already highlighted in the framework. The research report also highlights the benefits of these policies, outlines the challenges raised by respondents regarding their implementation, and proposes strategies to enhance their effectiveness.