As more investors eye up the circular economy, consultant Frank Klostermann says the waste management sector in NSW is handicapped by poor government planning.
Raising money for the launch of a new project involves complex negotiations with the banks, detailed presentations to company boards and astute financial calculations.
Everyone expects the numbers to be right, checked and double checked. But the final decision often comes down to intangibles, such as risk, trust, certainty. No one has got a crystal ball, yet everyone wants to know the distant future.
This is strange behaviour, but oddly human.
So, how do we achieve the certainty and trust needed to change wasteful practices and launch new industries to create a fully functioning circular economy?
Here are three real-life examples of great investment opportunities squandered because of disastrous management decisions by the NSW government and some of its agencies.
- Alternative waste treatment technology facilities (AWTS)
These facilities were allowed to operate for over a decade, until the NSW Environmental Protection Agency (EPA) decided the output from the facilities, called Mixed Waste Organic Output (MWOO) shouldn’t be allowed to be used as soil amendments.
In short, the industry was informed and the existing Resource Recovery Exemptions (RREs) were withdrawn. NSW had five such facilities. They had no choice but to landfill their MWOO.
The EPA allocated some grant funding to allow transitioning of these facilities to another purpose. Several hundred million dollars of investment were suddenly “stranded assets” as their futures was “limited”. To be clear: I am not criticising the outcome. I actually agree with it. But the way it was done, the limited time industry was given to respond and the limited consultation adds up to a poor government decision-making.
2. Energy from waste facilities (EfW)
Until September 2021, when the NSW “Energy from Waste Infrastructure Plan” was published, it was perfectly okay to apply for an EfW licence in Greater Sydney.
The NSW EfW policy statement, which was first published in 2013, did not discriminate between locations for such facilities, hence the development applications for three such facilities in the Greater Sydney region were permissible. Until now.
Since September 2021 the Government has made clear it will not allow such a facility in the Greater Sydney region. I don’t know how much money was wasted on the three applications mentioned, but it must have been in the millions.
Money and time have been wasted because the state government changed its mind, without consultation. Cause for compensation? Good use of taxpayers money?
3. Resource recovery exemption for recovered fines from mixed construction and demolition waste.
This general exemption has existed for quite some time. As a result, 1.4 million tonnes of such waste is recovered and diverted from landfill each year; recovered fines are mostly soils from construction and demolition sites and fines from processing so-called masonry materials.
The NSW Government is currently going through the process of “consulting” with the industry about this. For some reason it wants to withdraw the exemption. The outcome is clear: an extra 1.4 million tonnes of waste going into landfill each year.
This above-face comes at a time that Sydney’s landfill sites are running out of space. The EPA has said we need more landfill sites. Any idea how long it takes to get a new landfill approved in NSW? Try 10 years. Watching this disaster unfold over the last 25 years is like watching a train running a wall at full tilt.
The relevant industry associations have been trying to get a meeting with the responsible minister for the last 18 months. The minister says he has no time to talk to them and the EPA also seems deaf to their concerns.
Although the EPA publicly agrees to consult with industry the debate is not happening. Since the EPA sets the agenda such issues are never tabled – and if industry raises issues not on the agenda they are told to pull their heads in.
Much of the blame can be attributed to the functioning of the NSW Resource Recovery Orders and Exemptions framework. The EPA has announced a review, but it is not fit for purpose.
Anyone looking to invest in waste management in NSW needs certainty and trust. Both are woefully absent at the moment.