Unpacking Australia’s latest circular economy initiatives

Australia is one of the few G20 countries without a comprehensive circular economy policy or strategy. Since the Industrial Revolution, we’ve operated on a take-make-waste model that has put a huge strain on our natural resources. To make good on Australia’s commitment of going net zero by 2050, we need to quickly transform into a closed-looped economy where materials are reused, recycled, repurposed, or remanufactured. 

Is the government doing enough to speed up the path to circularity? Judging by the recent spate of announcements, I say yes.

If you’ve missed the news, here are the three announcements that I am referring to:

1.     Circular Economy Ministerial Advisory Group (CEMAG) Interim Report

2.     Environmentally Sustainable Procurement Policy

3.     Future Made in Australia Act

These announcements can trigger a chain of events that will impact all Australian industries. Not only will circularity become a part of compliance, but it’ll also translate into substantial economic benefits for those who are swift in their transitions.

A PWC study has managed to put a number on it—a whopping $1.9 trillion economic opportunity for Australia. Read on as I break down these initiatives and the opportunities they present for sustainability-minded business owners like us.

Circular Economy Ministerial Advisory Group Interim Report

Achieving net zero without an overarching circular economy framework was becoming tricky for Australia. That’s why, in 2023, the government set up the Circular Economy Ministerial Advisory Group to guide the transition. Their interim report was released recently, and here’s what it had to say about its six focus areas:

National Policy Setting: According to the advisory group, the National Circular Economy Framework, due at the end of 2024, should outline a clear vision for Australia’s circular future. It should identify priority sectors while also sharing skills and innovations needed for this transformative shift. Finally, circularity should benefit the climate, biodiversity, and all Australians, including First Nations people.

National Target Setting: Until now, Australia’s sustainability efforts have been more or less limited to end-of-life actions and recycling. However, circularity is much broader than that. It also includes increasing resource efficiency and minimising waste and carbon emissions. The advisory group recommends providing a clear set of targets and indicators to investors and industries based on national priorities and routinely measuring progress.

Economics: The advisory group recommends incorporating circularity in sustainability finance frameworks and enlisting company directors’ help in steering circular activities in their organisations. It also recommends encouraging climate-related reporting as per the IFRS S1 standards developed by the International Sustainability Standard Board (ISSB).

Net Zero: Circularity is a resource-efficient and cost-effective way to transition to a net zero economy. Keeping this in mind, the advisory group recommends using circular economy principles and actions in decarbonisation plans. They also ask the government to ensure the use of circular design features in products, services, and infrastructure.

Design & Consumption of Products: Decisions made in the design phase influence over 80% of a product’s environmental impact. However, government action has so far been focused on end-of-life and recycling efforts. The group recommends developing easy-to-adopt circular design principles for implementation at product, service, business, industry, and society levels. 

The report also proposes using the National Reconstruction Fund (NRF) to support businesses that make reusable, durable, and easily repairable products. Making information about a product’s circularity and environmental impact available to consumers will help drive reusability.

The Built Environment: The Built environment is responsible for about 40% of Australia’s solid waste, making it a priority sector in the transition. Recommendations include adopting policies that favour refurbishment, the use of recycled content, and circular design features to minimise infrastructure waste from the start. 

As comprehensive as this report is, I feel some crucial elements are missing. Coreo, circular economy experts, also seem to think there are quite a few gaps in CEMAG’s recommendations. For starters, the report doesn’t talk about thresholds and tipping points like the ones in the planetary boundaries framework. It also overlooks the importance of emulating nature and systems thinking in driving Australia’s circular transition. 

Another of Coreo’s criticisms (and something I wholeheartedly agree with) is that the report focuses on recycling. What it misses out on is that recycling is the 8th in the Nine Rs of Circularity— far below rethinking, reducing, reusing, and repairing in the order of importance.

Environmentally Sustainable Procurement Policy

The same day as CEMAG’s interim report was released, Tanya Plibersek, the Federal Minister for Environment and Water, announced Australia’s first Environmentally Sustainable Procurement Policy (ESP). 

Due to rollout on July 1st, 2024, the ESP policy focuses on three areas – climate, environment, and circularity to improve the sustainability of public procurement. It prioritises products and services that leverage new technologies and use environmentally, economically, and socially sustainable materials and processes. 

The ESP policy outlines four high-impact categories to fast-track the move to a circular economy. The first phase, beginning July 1st 2024, will focus on procurements in construction services that are at least $7.5 million in value. By July 1st 2025, the policy will also cover procurements of $1 million and above in the following categories:

1.     Furniture, fittings, and equipment

2.     Information and Communication Technology (ICT) goods

3.     Textiles.

Like the CEMAG report, this, too, bets heavily on recycling and overlooks the more important Rs in circularity.  

Future Made in Australia Act

The third major announcement to secure a sustainable future for Australia came in the form of the Future Made in Australia plan. While announcing the plan, PM Albanese echoed Treasurer Jim Chalmers’ remarks questioning the Australian economy’s productivity, competitiveness, and resilience. He highlighted the need to spur an economic transformation by creating an environment that favours domestic manufacturing. 

The Future Made in Australia comes with a $23 billion package spread across the next ten years, kicking off with the 2024-25 budget. The initial focus will be on increasing investments and intensifying upskilling efforts in the following industries: renewable hydrogen, green metals, critical minerals processing, low-carbon liquid fuels, and clean energy manufacturing. The package also covers the priority sectors of the National Reconstruction Fund (NRF).

The NRF was established in 2023 to transform Australia’s economic and industrial landscape. Its primary objective is to fund projects that fall in key sectors, such as renewables, transport, low-emission technologies, medical science, and value-adding in agriculture and forestry. 

Together with the NRF, the Future Made in Australia Act looks poised to boost public and private sector collaboration, making the transition to a circular economy smoother and faster. 

What do the latest circular economy initiatives mean for your business?

The three announcements open a world of opportunities for businesses to expand, grow, and diversify the economy. Sure, climate-related compliance and scrutiny will increase, but these initiatives offer plenty of economic and competitive advantages. 

Think of it this way: The Future Made in Australia plan will create an ecosystem that enhances sovereign capabilities and supports environmentally friendly industries. Meanwhile, the ESP policy will give such businesses a competitive edge in public procurement bids.

I’m delighted to share that Planet Protector has a long-standing commitment to increasing domestic manufacturing and supply chain sovereignty. Our ‘state of the art’  manufacturing facility has a solution for nearly every type of fibre input, from cotton, jute, hemp, denim, recycled textiles and even agricultural waste fibres! 

This will change our trajectory and will enable us to manufacture products for building insulation, acoustics, geotextiles and bedding. By transforming waste fibres into non-woven products, we help local businesses meet their ESG targets and create resilient and transparent domestic supply chains. 

If you want to contribute to Australia’s circular transition and economic sovereignty but don’t know where to start, here are a few tips:

• Define what circular economy means for your business and what role you want to play in supporting this massive economic transformation.
•  Find out if your business or dependency network figures in any of the Future Made in Australia Act and NRF priority areas. This will help score funding for your projects.
• Spend time measuring your businesses’ activities, products, and materials and their environmental impact to identify potential areas for incorporating circularity.
• Design out waste by using sustainable, non-toxic, versatile, and durable materials with high cyclability.  

Final thoughts

A circular economy is a win-win-win for the planet, the people, and profits, and there’s a lot to be gained for businesses that are swift in their circular transitions. 

To my fellow business owners, I say roll up your sleeves and get ready to contribute to Australia's biggest transformation since the Industrial Revolution. 

I’d like to wrap up this article with this question: How is your business planning to implement circularity?