Opportunities in the circular economy

How Australia can seize the circular economy opportunity

Australians are finding innovative ways to use materials more sustainably and efficiently but are being held back by complex and inconsistent regulations.

The interim report of the Productivity Commission’s inquiry into the circular economy, Australia’s circular economy: Unlocking the opportunities, finds that despite an increased focus from business, government and the community, progress towards a more circular economy has been slow.

A circular economy aims to use materials and products more sustainably and efficiently through activities such as designing products to use less materials, extending product lifespans via reuse and repair, and recycling and recovering materials to reduce waste.

‘We heard from businesses, communities, and researchers who are exploring how to use materials more efficiently, convert different types of waste into valuable products and to regenerate nature,’ said Commissioner Joanne Chong.

‘However, some face barriers such as prescriptive, outdated or inconsistent regulations, limited access to finance or insurance, and challenges accessing information and knowledge.’

The report welcomes recent government focus on the circular economy and urges sustained national leadership.

‘Innovative sustainable practices, like prefabrication in construction, using organic waste to create energy, and repurposing old mine sites, are sometimes being stymied by out-of-date or overly complex regulation. Governments need to ensure that rules and guidelines support a safe shift to a more circular approach,’ said Commissioner Alison Roberts.

Inconsistent regulation between governments also presents barriers for circular economy practices. Currently, states and territories have different rules around disposing e-waste, using recycled materials in construction and kerbside recycling, to name a few.

‘Inconsistencies in regulations between governments are a recipe for red tape and frustration for businesses and consumers that can slow the uptake of circular practices. Getting governments on the same page will make sustainable choices cheaper and easier for everyone,’ said Dr Roberts.

The report also recommends that governments provide consumers with more information about the durability and repairability of products.

‘In the same way dietary information helps consumers make healthier choices, providing information on the durability and repairability of products could help consumers make more sustainable choices,’ said Dr Roberts.

The growing challenge of e-waste highlights the role of circular economy practices.

‘Australians generate e-waste at almost three times the global average, but this e-waste challenge also presents an opportunity, particularly as more and more rooftop solar panels and electric car batteries reach end-of-life,’ said Ms Chong.

‘Materials found in solar panels and electric car batteries can be valuable when recovered correctly. Government can coordinate cross-industry solutions to the e-waste issue that could benefit the economy and the environment.’

The circular economy relies on connections – whether between researchers and industry or between businesses. These connections can span across Australia or be concentrated in circular economy precincts or regions that can create benefits for local communities.

‘In cities and regions, we heard about businesses working together to develop new circular economy ideas, turn waste into wealth, and save on costs such as transport. The PC is considering ways for governments to enable these connections between organisations both close to and far from each other,’ said Commissioner Chong.

The PC is now seeking further submissions in response to information requests ahead of the release of a final report later this year.

Upon release the interim report will be available from the PC’s website: pc.gov.au/circular-economy

Media requests

02 6240 3330 / media@pc.gov.au

• A circular economy aims to use materials and products more sustainably and efficiently, with economic, environmental and social benefits.
  • Circular activities include designing products to use less materials, extending product lifespans via reuse and repair, and recycling and recovering materials to reduce waste.
  • The benefits of circularity include more efficient use of the planet’s finite stock of natural capital to support economic and productivity growth; reduced harms to the environment, climate and biodiversity; and improved social outcomes such as health, amenity and intergenerational equity.
  • Some circular activities reduce materials use in ways that simultaneously benefit the economy, the environment and society. Others have trade-offs, such as lowering materials use but increasing carbon emissions (for example, if recycling requires transporting waste long distances).
• Despite some uptake of circular economy opportunities in Australia, progress has been slow.
  • Australia’s materials productivity, circularity rate and waste recovery rate have increased slightly over the past decade.
  • Barriers to adopting circular economy opportunities include high costs; prescriptive, outdated or inconsistent regulations; coordination challenges and difficulties diffusing circular innovations; and limited practical information on circular opportunities.
• Updating regulations to level the playing field for newer or less widespread technologies and capabilities would support the uptake of circular activities. Harmonising inconsistent regulations between jurisdictions would lower administrative costs and burdens for businesses undertaking circular activities across Australia.
• Governments can facilitate coordination and innovation diffusion by supporting information exchange platforms, adopting challenge-based innovation funding models, brokering businesses' engagement with regulatory processes, and leveraging sustainable procurement policies and place-based initiatives. The Australian Government’s current leadership and coordination of product stewardship schemes could be expanded to products with higher-risk and/or higher-value waste streams.
• More information would enable better decisions about circular opportunities. For example, at the consumer level, product labelling schemes on repairability and durability would help people to make more informed purchases of sustainable products. At a higher level, monitoring the outcomes associated with materials use and circular activities would help governments and businesses identify opportunities and measure improvements.

• Preliminaries: Cover, Copyright and publication detail, Opportunity for comment, Terms of reference, Disclosure of interests, Contents and Acknowledgements
• Overview
  • Key points
  • Despite some uptake, Australia’s circular economy progress has been slow
  • There are opportunities for governments to address barriers to circularity
  • Reducing regulatory barriers would encourage circular activities
  • Coordination between industry and by governments could be improved
  • Addressing information gaps would support decision making
  • The PC is seeking further information about its proposed reform directions
• Recommendations, reform directions and information requests
• 1. What is a circular economy?
  • 1.1 Motivations for a circular economy
  • 1.2 How is Australia progressing on a circular economy?
• 2. The role of government in fostering a circular economy
  • 2.1 What drives and what impedes circularity?
  • 2.2 Rationale for a government role in the circular economy
  • 2.3 Australia’s circular economy policy landscape
• 3. Prioritisation framework
  • 3.1 Considerations for prioritisation
  • 3.2 Applying the prioritisation framework
• 4. The built environment
  • 4.1 Overview of the built environment sector
  • 4.2 Opportunities for greater circularity in the built environment
  • 4.3 Policy interventions to address barriers to circularity
• 5. Food and agriculture
  • 5.1 Overview of the food and agriculture sector
  • 5.2 Opportunities for greater circularity in food and agriculture
  • 5.3 Policy interventions to address barriers to circularity
• 6. Textiles and clothing
  • 6.1 Overview of the textiles and clothing sector
  • 6.2 Opportunities for greater circularity in textiles and clothing
  • 6.3 Policy interventions to address barriers to circularity
• 7. Mining
  • 7.1 Overview of the mining sector
  • 7.2 Opportunities for greater circularity in mining
  • 7.3 Policy interventions to address barriers to circularity
• 8. Vehicles
  • 8.1 Overview of the vehicles sector
  • 8.2 Opportunities for greater circularity in vehicles
  • 8.3 Policy interventions to address barriers to circularity
• 9. Household, consumer and emerging electronics
  • 9.1 Overview of the electronics sector
  • 9.2 Opportunities for greater circularity in electronics
  • 9.3 Policy interventions to address barriers to circularity
• 10. System‑wide arrangements
  • 10.1 System‑wide policies to support a circular economy
  • 10.2 Monitoring progress on Australia’s circular economy
• A. Public consultation
• Abbreviations
• References

Printed copies of this report can be purchased from Canprint Communications.