Supermarkets release soft plastic recycling plans to fill void left by REDcycle suspension

A taskforce made up of major retailers ALDI, Coles (ASX: COL) and Woolworths (ASX: WOW) has released plans to gradually increase capacity to recycle soft plastics again after the REDcycle operation collapsed in November and was declared insolvent last month.

As part of a Roadmap to Restart released by the Soft Plastics Taskforce, an initial in-store collection pilot will be launched in select stores in late 2023, provided that REDcycle’s existing soft plastic stockpiles can be cleared beforehand.

In February, Coles and Woolworths were granted control of REDcycle's unrecycled stockpiles that had accumulated over the course of years - a state of affairs that "deeply disappointed" Coles according to the retailer's chief operations and sustainability officer Matt Swindells at the time, with similar sentiments shared by Woolworths Group chief executive officer Brad Banducci.

Both companies had paid more than $20 million to REDcycle over the last decade.

There are expectations the new program will be rolled out nationwide in 2024.

The taskforce notes that while its members are working to launch in-store collections urgently, they are "severely constrained" by Australia’s limited access to domestic soft plastic recycling capable of managing the “mixed polymer” soft plastics that are deposited by the public in supermarket collection bins. 

At present, it would not be possible to recycle the volume of household soft plastics collected in a supermarket program using domestic infrastructure.

From late 2023, the taskforce will meet the newly available processing capacity with a staged re-introduction of in-store collections so that the volume of incoming household soft plastics does not exceed the amount that can be recycled, as was the case with REDcycle.

However, if existing capacity is taken up by the estimated 12,000 tonnes of stockpiled material for at least a year, the recommencement of in-store collections will be delayed. In a bid to reduce the likelihood of this happening, Coles and Woolworths will also look to export the stockpiles to trusted recycling facilities overseas with the necessary transparency, traceability and government approvals. 

Over the coming months the taskforce hopes to engage other retailers, e-commerce platforms and consumer brands that generate soft plastics to contribute to the development of the new in-store collection program.

"For the vast majority of Australian households, the only avenue to recycle their soft plastic waste has been through the REDcycle bins available at Coles and Woolworths supermarkets," a spokesperson for the taskforce says.

"Restoring public trust in soft plastic recycling is paramount, and the taskforce will reintroduce soft plastic collections when it can be confident that it will be properly recycled. We owe it to consumers to get this right.

"The best way to accelerate nationwide access to soft plastic recycling is through continued investment in recycling facilities to bring forward existing plans to expand domestic capacity."

Minister for the Environment and Water, Tanya Plibersek, says her government welcomed the announcement today.

"This was possible because we moved to bring the supermarkets together and obtained ACCC approval for them meeting to resolve the problems created by the collapse of REDcycle," she says.

"The reality is that we have a plastics problem in Australia. We need to produce less, use less, and better reuse what we have.

"The most important thing is that families who took the time to recycle their soft plastics under the REDcycle scheme can be confident that their efforts were not in vain."

Minister Plibersek explains that the federal government will be rolling out a  $250 million Recycling Modernisation Fund, following a $60 million allocation in the last Budget to support new recycling infrastructure for hard-to-recycle plastics, including soft plastics.

"Under the Recycling Modernisation Fund, 48 additional plastic recycling facilities have already been funded, and 11 of these have already been delivered," she says.

A spokesperson for the taskforce has thanked Minister Plibersek and industry for their support.

"We look forward to their continued contribution as we design this stepping stone towards a circular economy for soft plastic," the spokesperson says.

The Australian Packaging Covenant Organisation estimates that less than 5 per cent of consumer soft plastic was collected by the REDcycle program. The taskforce recognises the need for a long-term national soft plastic recycling strategy beyond its interim program, which has the potential to significantly increase the proportion of household soft plastic collected.

"We recognise that in the long-term, more soft plastic could be diverted from landfill if future schemes are more convenient for consumers and can meet soft plastic at the point where it becomes waste - the household.," the taskforce spokesperson says.

"It is crucial that this opportunity to rethink Australia’s future national soft plastic recycling model is not overlooked."

The National Plastics Recycling Scheme (NPRS) outlines a new kerbside model to collect more household soft plastics. It has been developed by the Australian Food and Grocery Council with funding support from the Australian Federal Government’s National Product Stewardship Investment Fund. The scheme is based on a model which would see food and grocery manufacturers pay a levy to support the recycling of the soft plastics they create. It is currently being trialled in select areas.

The Victorian Government has announced a future state-wide rollout of kerbside soft plastic recycling, pending the success of the current NPRS trial. The taskforce applauds this move and strongly encourages state and territory governments to support their local councils to do the same to ensure as much household soft plastic is saved from landfill as possible.

On REDcycle's Facebook page, the group explains that numerous factors contributed to the program's demise just as collection volumes were soaring, with REDcycle's recycling partners unable to process volumes due to a lack of immediate access to infrastructure, inadequate processing capacity and reduced demand for recycled products. 

"Then in June 2022, our largest volume offtake partner had a significant fire, resulting in their Tonerplas facility closing for reconstruction for 12 months," the company states.

"This combination of factors put untenable pressure on the REDcycle business and system, and consequently, REDcycle regrettably announced the pause of the collection program in November 2022.

"This incredibly difficult decision came after months of diligent and dedicated work discovering solutions, to build a better and more resilient and robust system, working with every partner to restore and strengthen this vital pipeline, and to not let down the community whose passion and dedication we’d harnessed, and which now inspired us."

REDcycle says Australia's circular economy is not "a perfect diagram on a presentation slide".

"It is a living, dynamic, interconnected system, evolving and adjusting, only ever as strong as its weakest link. It requires significant care and ongoing investment," the group says.

"The REDcycle part of the chain was thriving with growing community engagement, meaning greater volumes of soft plastic were diverted from landfill and retained in the circular economy.

"We understand people’s disappointment and frustration. But we are uplifted and strengthened by the overwhelming support from community, industry, and partners.

"REDcycle helped revolutionise how Australians consider plastics and recycling, and with it, created a movement. This legacy and opportunity now need to be grasped with both hands. The price of not doing so is too high."