Australia Recycled Plastic Market Trends

Market Driver – Government regulations and initiatives

The Australian government has been taking strong initiatives in recent years to reduce plastic pollution and move towards a circular economy model. Major regulations and policies around extended producer responsibility and bans on certain single-use plastic items have incentivized both manufacturers and consumers to increase use of recycled plastic. The 2020 National Waste Policy Action Plan sets ambitious targets for all levels of government to work together and ensure 70% of average annual plastic waste generated is recycled or composted by 2025.

To achieve these goals, state governments have launched numerous programs to curb waste sent to landfills and promote recycling. For example, the New South Wales Government implemented the Plastics Action Plan in 2021 focusing on bans, product stewardship schemes and education campaigns. As a result of these policies, collection of plastic recycling jumped by over 25% from 2020 to 2021 according to NSW EPA data. Similarly, other states like South Australia and Queensland have introduced various initiatives like rebate schemes on recycled content products and funding for plastic sorting facilities.

Market Driver – Growing demand from construction and packaging industries

The demand for recycled plastics has seen a steady rise in Australia mainly due to strong growth in the construction and packaging industries. The construction sector has been relying heavily on plastic pipes, fittings and sheets for building materials due to their durability and resistance to degradation. As new infrastructure projects come up coupled with rehabilitation of existing structures, large volumes of plastic scrap is generated annually which is then recycled by plastic manufacturers to produce new materials. Similarly, the packaging industry has witnessed a boom with rise in e-commerce and demand for packaged consumer goods. Being a lightweight and low-cost material, plastics have become the primary choice for packaging of all types of products. However, single-use plastics pose serious waste management issues. Both industries are therefore increasingly procuring recycled plastic granules and pellets for production needs.

Market Challenge: Collection and logistics challenges

Collection and logistics challenges pose a major hindrance to the growth of Australia's recycled plastic market. Sorting, processing, and transporting vast quantities of post-consumer plastic waste requires sophisticated collection infrastructure and streamlined supply chains, both of which are still lacking throughout much of the country. Due to its large geographical expanse and small population outside major cities, plastic collection points are sparse in many rural and remote areas of Australia. This makes it difficult for individuals and businesses to segregate and send their recyclables through formal recycling channels. Many communities have basic kerbside collection but no dedicated processes for plastic only. As a result, a significant portion of recyclable plastic ends up in landfill rather than being diverted for reprocessing.

Market Opportunity: Developing advanced recycling technologies

Advanced recycling technologies offer a major opportunity for growth in Australia's recycled plastic market. Developing capabilities for chemical and feedstock recycling would help address some of the key challenges that currently limit plastic recycling rates and demand for recycled plastic materials.  Chemical recycling technologies like pyrolysis and gasification can break down mixed waste plastic streams of different resin types and colors into their fundamental chemical building blocks like oils and waxes. This unlocks a much wider range of mixed and dirty plastics from being recycled that currently often ends up in landfill or export. It overcomes issues with traditional mechanical recycling which requires separation of resin types and can only reprocess clean plastic a few times before quality degraded. Chemical recycling produces outputs that can re-enter the production process as virgin-quality plastic or other petrochemicals, commanding a higher price.