Waste - Emerging synergies Cr. Heinz Kreutz

1. Waste - Emerging synergiesCr. Heinz Kreutz VLGA Leading Edge Forum 29 March 2012

2. 4 Areas: • Waste responsibilities in Victoria • Landfill Levy • Local Government and Waste • Organics (case study)

3. Responsibilities • State Government • Local Government • Private Sector

4. State Government • EPA – regulator • DSE – (environmental) policy settings • SV – program delivery • MWMG –

5. Metropolitan Waste Management Group • Program implementation • Project delivery • Development of IP • Liaise with and advocate for Local Government • Facilitate and coordinate waste management and procurement for LG • Provide metro-wide education and awareness programs

6. Levies and Taxes Estimated 2012/13 % Landfill costs • Gate fee: 28% - 36% • Landfill levy: 41% - 45% • Carbon tax: 23% - 26% • Total environmental taxes: 64% - 71% Assumptions: Example of % costs using one Metropolitan Melbourne Council 2011/12 landfill tonnes, 2011/12 gate fee range of contracted operators, 2012/13 landfill MSW levy rate & modelled 2012/13 carbon cost impact to gate fee price.

7. Landfill levy • Introduced in 1992 under the Environment Protection Act 1970. • Aim of the levy: • Help protect the environment; • Foster environmentally sustainable use of resources; • Implement bets practice in waste management....

8. Levy .... • Funds the activities of: • The Metropolitan Waste Management Group; • Regional waste Management Groups; • Sustainability Victoria; • Environment Protection Authority.

9. Landfill levy Levy also helps establish: • Waste Management infrastructure; • Industry waste reduction programs; • Regulatory controls and enforcement regimes; • Local Government programs. Funds raised through the levy. • $490 m since 1992 • $131.5 m in 2011/12 • $133.5 m in 2012/13

10. Reinvestment of Levy Funds • $166.7 m from the Sustainability Fund between 2005 and 2010 on grants programs, strategic initiatives for industry and local government. • $35.5m in 2010/11 for EPA, SV MWMG and Regional WMG’s. • In 2011/12 • $5.6m for 57 projects to help councils deliver environmental solutions under the Local Sustainability Accord grants program. • $5.5 m to support the implementation of the Metropolitan Waste and Resource Recovery Strategic Plan. • $1m for 9 dedicated Litter Prevention Officers to be employed by local councils across Victoria. • Government commitment to invest more funds to directly tackle waste and recycling issues.

11. Reinvestment .... • In 2011/12 • $5.6m for 57 projects to help councils deliver environmental solutions under the Local Sustainability Accord grants program. • $5.5 m to support the implementation of the Metropolitan Waste and Resource Recovery Strategic Plan. • $1m for 9 dedicated Litter Prevention Officers to be employed by local councils across Victoria. • Government commitment to invest more funds to directly tackle waste and recycling issues.

12. (sub-) Summary.... • Information support to L Government recovery / diversion decision making • Clarity of outcomes & targets influence decisions (recovery rate, organics diversion, cost per T diverted, cost per T CO2-e abatement) • Is level of environmental tax (State levy) appropriate • Is community getting value from waste investment (64-71% tax cost) • Infrastructure & landfill capacity planning & investment (in context of energy & carbon policy drivers)

13. Possible future Reinvestment of Levy Funds • Infrastructure to pre-sort waste prior to landfilling and reclaim resources from residual bins (No waste directly to landfill). • Establishment of a network of Advanced Waste Technologies to process food and organic wastes (Quality end products and energy). • Establishment of a network of transfer stations to cater for bulk transport of residual wastes to landfill. • State wide education programs to change community behaviours towards waste (Resource not waste).

14. Other Key Issues & Considerations cont. • Federal Government Policy Drivers • Energy & Carbon policy • Composting ‘covered’ process, but ‘Stand alone’ composting operations not likely to incur liability • Processing facilities on landfill sites? • Waste as a resource (energy and/or carbon products)

15. What can council waste managers do? Understand the implications of waste management options for carbon impacts and payments. Divert waste from landfill: less tonnes = less liability. Divert organics from landfill: the most significant waste materials in domestic waste are typically food, followed by garden waste, then paper. Subject to contractual obligations, deliver inert waste streams to landfill separately from putrescible waste, and ensure it is classified at the site as inert material. Subject to contractual obligations, use a landfill that has low methane emissions and efficient capture costs e.g. that generates electricity and/or gains CFI credits. This should impart a competitive advantage.

16. MWMG Contracted landfill Clayton Regional Landfill Member Contracts directly Owner Operator Council Landfill arrangements

17. MWMG’s support to Stakeholders Working with its networks of government agencies, councils, industry & consultants to address the implications of the Federal Government's Clean Energy Package. Providing Energy/Carbon pricing information to councils summarising the ways that carbon pricing is likely to affect waste management and what councils can do. Developed a Carbon Cost Calculator for Landfills to support councils, inform budgeting and prepare for landfill contract variations which may arise. Working with councils’ Landfill User Groups as part of contract variation processes. Analysed GHG, cost & waste diversion impacts associated with different scenarios for NW organics cluster – a template for metro-wide use. Reviewed & supporting external carbon pricing advice provided to councils for consistency, correctness & usefulness. Incorporating CEF & carbon policy drivers into metropolitan organics, infrastructure & investment planning.

18. Where to from here? Our Vision might look something like this….. ….by 2015 • The first two major ‘in vessel’ organics processing facilities will have been established to service NW metropolitan Melbourne. • Well advanced for further facilities to service the growth areas of NW Melbourne. • Processing facilities to service the SE and Eastern areas of Melbourne and potentially servicing adjacent regional areas will be nearing completion.

19. Councils’ challenge The challenge for councils will be to: • Consider the broader ‘cross border’ strategic issues when making decisions • ‘Invest’ in knowledge and become well informed on the future organics service options that are presently unfolding • Take that knowledge and review future waste management strategy to inform service intentions to assist in the planning for future commercial scale infrastructure and service procurement

20. MWMG challenge The challenge for MWMG will be to: • Continue to inform and provide the knowledge necessary for stakeholders to make decisions and develop infrastructure • Effectively and efficiently facilitate procurement of organics processing services on behalf of LG • Continue to engage with and understand Industries needs

21. Government Waste Portfolio Focus The challenge for government departments and agencies will be to: • To assist the state government in developing a waste policy • Provide focused and effective implementation programs • Provide foundational capacity to act (e.g data, technology information, regulations etc) • Improve standard of landfill design and management • Articulate clear composting and ARRT operating guidelines (incl. buffer requirements) Encourage the development of higher technology approaches for waste management

22. Government Waste Portfolio Focus The challenge for the processing industry will be to: • Be well informed of community perceptions and concerns with respect to the processing industry • When considering entering into a procurement process ensure full knowledge of the expectations and requirements of future partners in the organics supply chain • Plan and execute well, develop community engagement programs

23. Proposed Long Term Organics Procurement - Council Cluster Groups (As at Feb 2012) NW Tender Catchment Construction to commence early 2012 E Tender Catchment Procurement options under consideration Inner Catchment • NW participating councils. MWMG/Veolia Contract SE Councils participating in SE procurement process E Councils considering procurement options with MWMG Non participating Councils (as at December 2011) SE Tender Catchment Pretender planning & documentation 90% complete Tender Advertise Early 2012

24. Carbon Footprint – (Metro LG example) 24