The NSW EPA will launch a review of the state’s waste levy this year, and says consultation with local governments and other stakeholders will begin soon.

The review will examine a range of issues including waste levy boundaries, price setting, and exemptions and concessional rates for certain types of waste.

The EPA’s leader of  regulatory policy, initiatives and advice Nancy Chan told an industry event in Sydney on Wednesday the levy sets a price signal that encourages the separation of waste into different streams at source.

“We are committed to ensuring the waste levy operates in the most efficient and equitable way to achieve its objectives, which is landfill diversion,” she told the Australasian Waste and Recycling Summit.

“We will meet with stakeholders, including local government, to discuss current settings, so do expect to hear from us very shortly, this review will start this year and we will be starting consultation very soon.”

The last time the levy was reviewed was in 2012.

Levy under fire

The levy, which has been in operation for 50 years, was designed as a market-based instrument designed to divert waste from landfill and encourage recycling and waste avoidance.

It consists of a  metropolitan levy (Sydney, Illawarra and Hunter regions) and a regional levy area (the Blue Mountains, Wollondilly and the area north of Port Stephens to the Tweed). 

However it’s been criticised for not returning the $800 million it collects per year to circular economy initiatives.

It comes after the state’s auditor general said in a 2020 report that “waste levy settings and operation require review from time to time to ensure the levy is meeting its objectives as an economic instrument to reduce waste generation and promote reuse and recycling”.

The report said the EPA needed to review the rules governing the waste levy rules and improve reporting on environmental outcomes from levy funds.

A review of the levy is also a key commitment of the state’s Waste and Sustainable Materials Strategy, in which the government indicates it will explore introducing a waste levy rebate for landfills that have landfill gas capture infrastructure installed.

Although revenue from the waste levy is supposed to help local government run circular economy initiatives, councils have long complained that the benefits aren’t flowing back to them and called for the system to be overhauled.

Auditor General Margaret Crawford found in her 2020 report that the NSW government has collected almost $4 billion from the waste levy in the last five years, but only about a third of this has been reinvested into waste and environmental programs.