REDcycle collapse a sign of broken recycling system, but SMEs can still play their part

The breakdown of soft plastic recycling scheme REDcycle is an example of broader market failure, a leading plastics expert says, suggesting a combination of tougher legislation and business ingenuity is needed to solve the global waste crisis.

The decade-old program allows shoppers to return plastic shopping bags and other soft plastic waste to supermarket partners Coles and Woolworths.

REDcycle then passes that waste on to producers who repurpose the materials into new goods, like fence posts, concrete substitutes, and road additives.

However, the Nine papers this week revealed waste collected by REDcycle has not been passing those materials onto products and has instead stockpiled tonnes of unprocessed plastic in warehouse facilities.

REDcycle’s partners have “temporarily stopped accepting and processing soft plastics” due to “unforeseen challenges exacerbated by the pandemic”, the organisation said Wednesday.

A fire at one processing partner also crushed their ability to process soft plastics, the organisation added.

With nobody on hand to take REDcycle’s mounting stockpile of waste, the organisation announced it will pause its collection of plastic bags returned to Coles and Woolworths.

Dr Anya Phelan, a lecturer at the University of Queensland Business School and entrepreneur in residence with the CSIRO Plastics Innovation Hub, told SmartCompany the REDcycle breakdown was “hugely disappointing”.

However, the problem is not solely REDcycle’s fault, she says.

“It is very much an indicative kind of massive red flag if not a key symptom of a broken system.

“With recycling, most of us think that it gets turned into something.

“And that’s just not happening.”

Phelan says the core issue is one of economics: recycling processors are more likely to accept ‘high quality’ plastics like those used for drink bottles and household cleaning liquid containers compared to the ‘low quality’ plastics used for plastic bags, which are harder to repurpose into new consumer goods.

“With high-value plastics, you can actually get paid dollars per ton, quite a bit for that,” Phelan said.

“And then low-value plastic is actually negative. So you have to pay for that to be taken away.

“And that’s just the nature of polymers and the way they’re recycling and reprocessing the resin. You can only use it once or twice.”

And with major waste export markets like China closing their borders to low-quality plastic, too few local operators exist to handle the 2.5 million tonnes of plastic waste produced annually in Australia.

Given the scale of the problem, consumer-driven initiatives like REDcycle represent a “massive smokescreen”, Phelan says.

The solution: far tighter regulation on packaging companies and food and beverage producers and the types of containers they use, Phelan says.

In a timely announcement, the House of Representatives Standing Committee on Climate Change, Energy, Environment and Water yesterday revealed a wide-reaching inquiry into Australia’s plastic waste problem, including the nation’s plastics management framework.

A patchwork of single-use plastic bag bans exists across the states.

However, with federal legislative action likely years away, and major retailers constrained by the scale of their plastic packaging needs, Phelan says small businesses can focus on minimising their own impact.

“SMEs in general have a very important role to play and are in a difficult situation, just by the nature of their size,” she said.

“That being said, I think small businesses have this opportunity in this transition towards a more sustainable way of producing, consuming, accessing and reusing resources.”

Growing consumer preferences for green and plastic-free options mean small businesses can adopt sustainable practices as a competitive advantage, she adds.

“It’s an opportunity to really differentiate, an opportunity to kind of basically rethink some of the processes and potentially old business models.”