Australia is launching a new industry-led soft plastics recycling scheme managed by SPSA to replace the failed REDCycle program, which collapsed nearly three years ago, leaving about 11,000 tonnes of unprocessed plastics.

This new scheme involves major supermarkets like Woolworths, Coles, Aldi, and manufacturers such as Nestlé, Mars, and McCormick Foods, but it currently covers only about 15% of the soft plastics on the market.

The scheme aims to increase collection and reduce landfill waste, with collection trials already underway in supermarkets and local councils, and plans to process up to 14,000 tonnes annually through facilities like iQRenew in Sydney.

Funding for collection, sorting, and processing will primarily come from levies on manufacturers and retailers, starting at AUD 160 per tonne and rising to AUD 200 by mid-2026, with the revenue used to expand recycling infrastructure.

While the scheme is voluntary, critics express concerns about limited capacity, potential cost passing to consumers—up to one or two cents per item—and the risk of greenwashing, as initial recycling efforts do not include food-grade packaging.

Challenges include scaling up recycling capacity, developing demand for recycled materials, and ensuring broad participation, with some experts suggesting mandatory measures might be more effective.

The scheme is expected to minimally increase consumer product prices but aims to incentivize manufacturers to adopt alternative packaging solutions.

Recycling remains costly, often between $2,000 to $3,000 per tonne, with chemical recycling being the only viable method for producing food-grade plastics, exemplified by APR’s new plant capable of processing 10 tonnes daily.

Environmental groups warn that the voluntary scheme might not be sufficient to meet recycling targets, citing limited initial recycling into packaging and risks of greenwashing, with calls for more comprehensive oversight and transparent use of levy funds.

The collapse of REDcycle in 2022 underscored the urgent need for a more reliable recycling solution, especially given the large volume of unprocessed plastics left behind.

Currently, none of the collected soft plastics will be recycled into food packaging, but the scheme emphasizes building markets for recycled plastics through chemical recycling, including efforts like APR’s plant.

There are ongoing calls for mandatory reporting, expanded oversight, and ensuring that levy funds are used effectively to genuinely improve recycling outcomes rather than subsidize retailer reimbursements.