The Australian Government is currently reviewing its packaging regulations with the goal of reducing packaging waste and fostering a circular economy. The Department of Climate Change, Energy, the Environment, and Water (DCCEEW) has outlined several reform options, each aimed at increasing recyclability, minimising waste, and improving packaging standards. The reform process is in its consultation phase, set to conclude by October 2024, with new regulations potentially taking effect in 2026.
In this short article, we summarise the reasons for the review and its scope, as well as potential implications for consumer product manufacturers.
Current status
Australia currently operates under a co-regulatory framework established by the National Environment Protection Measure (NEPM). Businesses with annual turnovers of $5 million or more must either comply with the Australian Packaging Covenant Organisation (APCO) voluntary targets or meet state-specific requirements. Accord, Australia’s peak industry association for manufacturers and marketers of hygiene, personal care, and specialty products, suggests that due to APCO’s voluntary nature and revenue threshold, businesses lack incentive to comply. Accord, on behalf of its members, recommends the federal government mandate APCO membership under the reforms.
What prompted the review?
The review was driven by concerns over the environmental impacts of packaging, inefficiencies in the current regulatory framework, and Australia’s failure to meet national packaging targets. For example, only 56% of packaging was recovered in 2021-22, with plastic recovery at a mere 20%. A 2021 review found the existing system insufficiently managed waste, and voluntary efforts were deemed inadequate to meet the 2025 National Packaging Targets.
There are 3 options under the proposed reforms
- Strengthening the existing co-regulatory system: This option involves improving enforcement and education under the current system, and maintaining voluntary compliance but with stricter oversight.
- National mandatory requirements: This proposal would introduce mandatory packaging design standards, including minimum recycled content thresholds and recyclability labelling. The requirement would apply to both B2B and B2C products. The national requirements are the least flexible of the proposed reforms.
- Extended Producer Responsibility (EPR) Scheme: Here, packaging producers would be financially responsible for the lifecycle of their products, encouraging sustainable design and funding recycling infrastructure.
Our partner Kaye Ho has been involved in industry discussions relating to the consultation. Her sense is that Option 3 is the most popular with industry, provided that the scheme is managed by a body other than the government. Option 2 seems to be the least popular, as it is perceived to be inflexible.
Potential changes
If the reforms are implemented:
- there could be stricter enforcement of packaging design standards, including mandatory recyclability thresholds
- producers may face eco-modulated fees, designed to incentivise the creation of more sustainable packaging
- minimum recycled content requirements and enhanced recyclability labelling could become mandatory.
Potential issues
Each option presents its own challenges:
- strengthening the existing system may lack the power to introduce consistent, mandatory obligations across the country
- mandating specific bans on packaging materials could stifle innovation and lead to unintended consequences, such as the use of less sustainable alternatives. Accord also suggests that the inherent differences between B2B and B2C packaging do not appear to have been appropriately considered, which limit the suitability of a mandatory packaging scheme that applies equally to B2B and B2C packaging
- an EPR scheme could be complex, with potential barriers to entry for businesses and misaligned international standards possibly raising costs and affecting competitiveness.
Implications for consumer product manufacturers
Manufacturers may need to adjust their packaging processes to comply with new standards, such as recycling content thresholds and clearer labelling. B2B packaging, which is currently not distinguished from B2C packaging in these proposals, may also be subject to stricter regulations. This could involve significant changes in packaging design, material sourcing, and production to meet new requirements.
Manufacturers and brands are advised to monitor these developments closely and prepare for potential changes to ensure compliance when the regulations come into effect, though there remains uncertainty at the moment about how the reforms will be implemented and when.
