Food Waste Recycling NSW | Podcast Ep. 60 Don’t Be A Waster
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Introduction
Hello and welcome to another edition of what of course should be your favorite podcast on all things recycling, which is Recycle, Don’t Be a Waster. This is actually the second time I’ve recorded this episode because my dear listeners told me the sound quality was not good enough on the last one. So I’m using a slightly different recording technique, which is the science known as using a telephone.
>Download Now: Free PDF Business Owners Guide To Commingled Recycling Bin Services
So hopefully the sound quality is better this time and yeah, it won’t annoy people as much.
So today’s podcast is the first we’ve done in quite a long time, basically about a year. And fundamentally I think it’s based on some of the changes that we’re seeing in regulations, legislation, taxation in Australia at the moment.
And obviously that’s small and medium businesses are doing it probably tougher than ever.
So I think anyone who has been following the news is more than aware that small businesses are perceived as having been hit by the recent budget, the federal government’s budget last month, which increased taxation. But one thing I think that people aren’t fully aware of is the ever increasing costs that small businesses are facing.
And at Waster, obviously we provide waste and recycling services to small and medium companies and obviously cafes and restaurants are a very large percentage of that. And one thing that the New South Wales government has done in their infinite wisdom is basically increased the costs of waste disposal for cafes and restaurants fundamentally starting on July 1. So they’ve brought in what is called a FOGO, which is like food waste, et cetera, a mandate for, it’s on a sliding scale and will be implemented over the next couple of years.
But at the beginning, it’s really focused on larger food production companies or businesses that produce a certain amount of square or cubic meters of waste per week.
And fundamentally it’s impacting cafes, restaurants, those larger food production companies. And this mandate says that you have to separate out your food waste from your general waste and it has to go into a dedicated food waste bin. So I suppose in today’s podcast, we’re going to look at number one, why they’re doing this.
Number two, you know, the impacts we’ll have on small business. Number three, does it even make environmental sense? And four, like what is the actual, the economics of this and how it impacts these small companies.
Why Is NSW Introducing Food Waste Recycling?
So I suppose the first thing is the state government is arguing that we’re throwing a lot of food waste in landfill, and this is a bad thing because it hurt the environment.
And that if we bring it somewhere else, that will benefit the environment and help us meet net zero, et cetera, et cetera. So clearly at Waster, we’ve covered this on many podcasts.
Clearly we don’t agree with, you know, dumping things at landfill that can’t be recycled. Hence our podcast and the name of our podcast.
Food Waste Versus Plastic Waste
But I think in some way, this is completely upside down and wrong headed. Like we’ve made it very clear that we regard plastic as being the main environmental issue facing Australian businesses and waste disposal due to its toxicity is, you know, basically last forever and the unforeseen damage it’s causing to the environment through microplastics and also hormone disruptors in human and animal populations.
So my view would be, we should put all our focus on this, but rather than that, the state government has put focus on food waste. Food waste fundamentally is, you know, probably let’s call it traditional. It’s, it grows, you know, in the ground or on trees, et cetera.
Methane, Landfill and the Environmental Argument
And then it, it rots away and releases gas in the natural carbon cycle. I suppose the argument that the state government’s making is at least as far as I can see, is that when this food waste is dumped at landfill, in theory, it, it rots away in a atmosphere lacking oxygen, because when you take the food waste, you dump it in, I suppose, let’s look at the original, you know, if an apple grows in a tree and it falls from the tree, it just rots away and releases, you know, carbon dioxide fundamentally and aspects of methane. And this will then cause a greenhouse gas effect.
But obviously there’s a natural carbon cycle there where when an apple grows, it brings in, it takes carbon dioxide from the atmosphere. And so it’s a natural neutral net zero circle. In the scenario where in industrialized societies, where we take it and dump it in the landfill, often it’s compacted, there’s other waste put on top of it, and it rots away and produces methane, at least a larger percentage of methane than carbon dioxide.
And the scientists tell us that methane is a much worse gas for global warming, for greenhouse, the greenhouse gas effect that traps more heat in the atmosphere, et cetera.
But the science in this is, is not an exact science. There’s, they’re pretty sure that it does this, but it doesn’t happen over the entire lifetime.
The, the decay rate is, is, is quicker. So it’s worse in the initial phases and then over time, you know, reduces. But we are told that methane is significantly worse from a greenhouse gas effect.
Composting and Anaerobic Digestion
And so dumping this at landfill supposedly will reduce extra methane and this is worse for the environment. So the FOGO mandate fundamentally says that it needs to go to an organic waste bin, and it can go then from there to two places. One is composting to produce compost.
And two is to an energy production facility, such in Sydney, which is generally the earth power facility in Western Sydney, whereby it is, it rots away, it releases gases. Those gases turn, are burned to create a turbine and that creates electricity for the grid. And obviously then it displaces the need for further, that the gas are burned, it creates electricity and we don’t need then to burn further fossil fuels.
So it reduces the need for further fossil fuels. So this entire argument really relies on the, I suppose the arbitrage between the gases being released. And in one scenario, it releases less polluting, first of all, less gas in general, and secondly, less polluting gas, carbon dioxide versus methane.
Do Modern Landfills Already Capture Methane?
But I suppose the issue here fundamentally is that this is, these numbers are not exact and that modern landfills actually capture a large amount of the gas produced. So modern landfills have gas capture facilities that capture the gas, they burn, this is the methane, they burn that methane, they create electricity, just like is done in a more advanced anaerobic digestion facility. So the question as to whether one is infinitely better than the other is not clear.
The statistics as to how much gas is captured, obviously is not clear. Some of these facilities claim up to 90% is captured, but I’ve read online that satellite imagery and different things suggest it’s much lower in reality than that. So there’s a lot of uncertainty regarding the actual outcome, the actual gases released, and then of course, the actual impact on the environment of these things.
Whether this makes a huge amount of difference to global warming at the end of the day is of course debatable when you can go up to Newcastle and see the coal ships being shipped off to be burned in other countries. It’s debatable whether this is playing around the edges or whether when we’re doing this, you look at the state budget in New South Wales that’s reducing road tolls. So are we incentivizing road traffic and then penalizing food decay? It seems a little bit counter-intuitive where things are moving in opposite directions.
On one side, we’re promoting car traffic and the other side we’re penalizing food decay, which is a strange focus, I think, for the environment. So that’s the environmental rationale, I guess, behind it and this will be rolled out further and further over the next couple of years to the point where, in theory, every business has to do this.
Why Composting Isn’t Always the Answer
Why do we not compost? That is another question.
Fundamentally, Australia has no shortage of compost and it is, in theory, there’s no economic outtake or off-taker for compost produced. So we’re not short of compost and the food production from many cafes and restaurants is not actually suitable for commercial composting because, obviously, in a small cafe, it can be mixed in with general waste, with other things that you wouldn’t want in a composting scenario. It’s not completely separated in a very scientific manner because, obviously, in a small business, you’re generally chasing your tails anyway.
So there will be contamination. That contamination may make it unsuitable for utilization on farms and growing things. So generally, composting facilities favor green waste or otherwise industrial produced food waste, such as from large food production factories and people making food products, etc., for business or for retail.
So that’s not really what we’re looking at. We’re looking at small companies who are producing food scraps left over from their dinner service, left over from their coffee shops, etc. So composting is not really a viable off-taker for most of this and the majority of it will likely end up in an anaerobic digestion facility.
How Food Waste Recycling Affects Small Businesses
So this is all well and good if this reduced cost for business and anyone listening to this podcast will be aware that small businesses, they’re struggling, costs are increasing all the time, the cost of inflation is going up, salaries are going up with awards, and this will act to increase the cost for business. So New South Wales has the highest levies on landfill in the nation and this theoretically means that when you dump at landfill, you have to pay a landfill levy, which is around about $140 per tonne of waste that goes to landfill. This was designed originally to do two things.
NSW Landfill Levies and Recycling Costs
Number one was to incentivise people to recycle more because recycling was cheaper, so you would make dumping at landfill relatively more expensive and then this would make recycling cheaper relatively, if not absolutely. And then the second thing was some of this money that was collected was to be used to build recycling facilities that would open up more recycling opportunities, decrease the actual cost of recycling for people and help with the circular economy. The sad reality is that the vast majority of this money collected does not go back into recycling, it just goes into state government coffers and so all it really does is increase the cost for small business and business generally.
It doesn’t create opportunities to decrease, it’s not a cost neutral lever, in theory it’s just a cash collection mechanism for the government. And you can imagine when taxation is so prominent in the national media, why state governments, which have very few revenue raising abilities, they can’t change income tax etc, corporation tax, so this is a very enticing method for state governments to raise taxation. It’s a cash, immediate cash method and it doesn’t impact the voters, at least the voters who are not business owners.
So it’s a way of raising taxation without, it’s not even called taxation, it’s called a levy, so it’s real cash coming in for state governments without voters, in most cases, even being aware of it. So you can see the appeal for state governments of doing it and so year on year they increase the levy and they can tell the good news story that this is designed to help the environment, boost recycling etc, but the percentage that goes into recycling facilities is very small indeed. So if organic waste was cheaper, companies would do it already.
Why Food Waste Collection Can Increase Business Costs
A lot of companies do recycle the food waste, but in nearly all cases food waste bins are cost neutral with general waste, and in some cases more expensive. So this means that if you divert food from general waste, i.e. going to landfill, into food waste bins, in most cases this will increase your costs, and certainly for small businesses and the companies that will be impacted by this decision over the next year or two, it will almost certainly increase their costs of doing business. And you ask yourself, is this what we really want to be doing to small companies, to food production, or sorry, food service companies, cafes, restaurants, hotels, when so many are doing it tough, when so many are struggling with the increased competition, with the cost of living crisis, which means the discretionary spend by people buying coffees etc, is not as, you know, people are putting off buying a coffee because their mortgage rates have increased.
The Real Cost for Cafes and Restaurants
So they’re already doing it tough from a revenue perspective, and now what we’re doing is we’re saying, you know, the food scraps, the coffee waste etc, you need to pay more and more just to get rid of this stuff. So if you think about the cost of a bin, the cost of a coffee, the calculation for a small cafe in Sydney, how many coffees do you need to sell, let’s assume at $4 a coffee, to even pay for one bin pickup? So a bin pickup for a cafe, could eat for a 6.60 bin once a week, could easily be $50 per pickup. If you think of a coffee costing $4, and let’s assume the profit margin on that coffee, would it even be 10%? I don’t know, but let’s assume you’re only making $0.50 from a coffee in profit, or if you pay salaries, wages, the general, you know, the taxation, the GST, the rental, the store maintenance etc, cleaning.
Once you do all that, you might have to sell 100 coffees to justify the cost of one bin. The economics of it become, you know, of running this cafe start to, it really starts to become very, very difficult. So the reality is that what we’re doing is we’re impacting the small companies that are really providing a service to the community, they’re providing employment and income for the owners, and also for the employees, and they’re making our lives nicer.
They’re providing, you know, what people, when you think of your local community, you often think of your local cafe, your local takeaway, and that aspect, and these are the people that will be hit by this decision. Obviously this does not make the press because, you know, the small business community is, you know, they’re not as large as the general voter, it doesn’t translate through in many cases to the general voter, and people, if they’re not getting taxed personally, they tend not to care very much. And at the moment there’s so much news in the press about, you know, capital gains tax, income taxes, corporation tax, every type of tax, that this one probably is falling through the cracks, but it is just as important.
How Could the NSW Food Waste System Be Improved?
You know, so I think, anyone, we really should look at how can we improve the scenario, I suppose is a question. And the first thing really is, is this the right thing for the state government to be looking at? Why are we not looking more and more at making this cheaper for people, making, decreasing the cost or building new facilities, making recycling cheaper, subsidising if need be the organic waste, so that it is, it is actually a cost saving for the, for the businesses, and that their actual cost of doing business will decrease, whilst there may be a benefit to the environment as well. And so I would like to see a commitment from state governments that x percent, whatever that percent is, of levies raised will actually be used to either subsidise recycling or build new facilities that will then have a market mechanism of making it cheaper, relative, relatively and absolutely.
But we cannot have a constant increase in the cost of disposing of waste that, like, on this planet, there’s no way we can produce food, sell food, etc, and not produce waste as well. So it’s, you can’t penalise people just for living, which is a little bit the way it feels at the moment.
Australia’s Bigger Waste Challenge: Plastic Waste
And the other thing I’ll say is, we really need to look at the real waste problems we have in Australia, which is plastic waste.
You know, how much plastic waste are we producing, single use plastics, all these sort of things. And there is no mechanism to recycle them, we refuse to burn them, we don’t look at incineration plants that are useful in places such as Japan and Sweden in particular, where they burn nearly all their plastic waste. And hence, you know, it reduces the need for new carbon fuels, and less coal, less oil, less gas.
And so there is a net benefit for the environment. But in Australia, we don’t do that. And we progress, fundamentally, we dump the vast majority of it in landfill, because there is no commercially viable method of recycling it.
We saw the red cycle collapse, whereby all soft plastics were, in theory, supposedly getting recycled through our supermarket chains. But in reality, it was just being stockpiled. We see glass getting stockpiled, because there’s no offtakers for it.
And it’s, we sort of ignore this. And now we’re focusing on food waste, which to me is the least, and the least critical problem that we have in some way. But that is, you know, people always say we are incentivized, we do what we’re incentivized to do.
And state governments seem incentivized to bring in revenue. And that’s where it is. And it may be because the solution to plastic is much more difficult.
And we’d have to actually look at incineration, or pardon me, fundamentally reducing the amount of plastic being used. Pardon me, I have a frog in my throat. So that’s, I think, where we leave it today.
Final Thoughts
I think we really wanted to highlight this problem, that is the food waste, the FOGO mandate. And hopefully, state governments will look at this, and maybe, you know, come back and find a solution that is good for the environment, but also doesn’t completely penalize the small businesses that our society is based on and relies on. So we’ll leave it there today.
And I’ll say recycle, don’t be a waster. And we’ll do, we’ll try to do more regularly, produce these podcasts more regularly, so that we can touch on some of the more, I suppose, newsworthy topics in the world of recycling, the world of the environment. As always, interested to hear your feedback and what your thoughts on this are.
