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Ireland
On 31 October 2023, the Screening of Third Country Transactions Act 2023 (the “Act”), which establishes a new foreign direct investment ("FDI") screening regime in Ireland, was enacted.
Australia | Publication | January 2024
This article was co-authored with Hannah Duke.
On 20 December 2023, the Department of Energy, Environment and Climate Action (DEECA) opened public consultation on the Circular Economy (Waste Reduction and Recycling) (Waste to Energy Scheme) Amendment Regulations 2023 (the Draft Cap Regulations). The public consultation period closes on 2 February 2024.
The Draft Cap Regulations constitute the second stage of the WtE Scheme Regulations. Following the commencement of the Draft Cap Regulations, set for 17 April 2024, DEECA has indicated that Recycling Victoria will begin discussions with proponents with a view to commencing the Expression of Interest (EOI) process for cap licences in the second half of 2024.
The Draft Cap Regulations will be made under the Circular Economy (Waste Reduction and Recycling) Act 2021 (CE Act). The Draft Cap Regulations build on, and amend the first stage of the regulations, the Circular Economy (Waste Reduction and Recycling) (Waste to Energy Scheme) Regulations 2023 (the Existing Regulations), which commenced on 1 June 2023. See our previous updates on the CE Act here and the Existing Regulations here).
The Existing Regulations deal with licences under the Waste to Energy (WtE) Scheme for existing operators (i.e., WtE facilities or project operators who held environment or planning approvals prior to the WtE framework being released on 21 November 2021) (Existing WtE Facilities). Recycling Victoria is now administering this first stage of the WtE Scheme.
The CE Act introduced the concept of a cap limit, being the prescribed maximum aggregated (in tonnes per financial year) of permitted waste that may be processed by thermal WtE facilities in Victoria (the Cap Limit).
This legal update provides a snapshot of the Draft Cap Regulations which:
The WtE Scheme is a part of Victoria’s reform to drive a sustainable and thriving circular economy and is enshrined in Part 5A of the CE Act. The WtE Scheme is designed to reduce waste sent to landfill, while prioritising waste avoidance and recycling.
Under the CE Act, thermal WtE operations processing permitted waste must hold a licence. The WtE Scheme provides for two types of WtE licences:
While EOLs do not form a part of the Cap Limit, if an existing operator seeks to increase the amount of permitted waste (or capacity) it can process, this change would be subject to the Draft Cap Regulations. To increase the amount of permitted waste processed at an Existing WtE Facility under an EOL, the operator would need to be invited by the Head, Recycling Victoria to submit an EOI for an increase in the amount of permitted waste.
Under the Draft Cap Regulations, to have a cap licence issued to increase the amount of permitted waste processed at an Existing WtE Facility the full licence fee will apply.
To prevent over-reliance on WtE, the CE Act provides for a Cap Limit on the total amount of waste that can be thermally processed through new or expanded licensed WtE facilities. The Cap Limit complements strategies that reduce waste and increase recycling in the long term, enabling a mix of investments and innovation in Victoria’s transition to a circular economy. The Draft Cap Regulations sets the level of the Cap Limit at 1 million tonnes per financial year, with the analysis in the Regulatory Impact Statement providing the rationale for the limit.2
In an attempt to strike a balance between support for appropriate WtE investment in Victoria, whilst concurrently encouraging long term circular economy and emission reduction outcomes, the Regulatory Impact Statement proposed three options for the Cap Limit, ranging from 500,000 tonnes to 2 million tonnes.
The assessment of those options focused on several key criteria, including:
In determining the proposed Cap Limit, the Regulatory Impact Statement analysed a forward estimate of waste flows in Victoria and considered how much suitable, available and permissible waste there may be for use under the WtE facilities. Accordingly, various assumptions regarding technology, consumer behaviour and policy were made to inform this analysis. These assumptions are set out in the Regulatory Impact Statement and DEECA is seeking feedback on whether these assumptions are reasonable. The Regulatory Impact Statement suggests that a cap of 1 million tonnes ensures the maximum value of materials is maintained without compromising future innovation and recycling outcomes, and promoting WtE to reduce use of landfill and extraction of virgin materials.3
The Draft Cap Regulations specify matters that the Head, Recycling Victoria must consider when determining:
The invitation by the Head, Recycling Victoria to an applicant to submit an EOI must set out the information that must be provided to Recycling Victoria.
In considering an applicant’s EOI, and determining whether an applicant may proceed to submit an application for a cap licence, the Draft Cap Regulations require the Head, Recycling Victoria to consider:
If the applicant holds either an EOL and seeks to increase the amount of waste it can process, or a cap licence for a facility, the RV must also consider:
The Head, Recycling Victoria may also request any additional information it deems necessary.
The Draft Cap Regulations prescribe matters the Head, Recycling Victoria must take into account when deciding whether to issue a cap licence. These mandatory considerations aim to provide a consistent, transparent and fair mechanism for Recycling Victoria to administer cap licensing; direct market engagement and investment towards promoting best practice WtE operations; and to provide certainty in investment decision making.
The mandatory considerations include:
The Draft Cap Regulations identify the South East Metropolitan Advanced Waste Processing Project as a critical waste infrastructure project, given the critical need for additional processing due to the closure of the Hampton Park Landfill. If an application for a cap licence is made that relates to this project (or future other critical waste infrastructure projects identified in regulations), then the Head, Recycling Victoria must also take into account the desirability of the project meeting the critical need identified through a WtE facility, when making a decision on issuing the cap licence.
The Regulatory Impact Statement proposes three options for fees that partially cover Recycling Victoria’s regulatory costs associated with cap licensing regime. The options are in line with the pricing principles in Victoria’s Pricing for Value (2021) Guide. The options included a flat single fee structure, two pricing levels for large and small facilities, and a sliding pricing scheme relevant to the development costs of the facility.
After a multi-criteria analysis, as set out in the Regulatory Impact Statement, the Draft Cap Regulations prescribe the relevant fees for different application types, differentiated on facility size, as set out in the table below.4
Table E1: Proposed fees
Cap licence application | ||
Fee units | 2023-23 fee | |
Cap licence application |
1,045 (small facility) |
$16,615.50 $33,310.50 |
Expression of interest | 780 | $12,402 |
Application to decrease cap | 390 | $6,201 |
The Head, Recycling Victoria may decrease the operator’s cap licence amount, if the operator is consistently processing significantly less permitted waste than their allocated cap amount, or upon application by the licence holder itself (in which case an application fee applies).
If the Head, Recycling Victoria proposes to decrease the cap licence amount, the Head, Recycling Victoria must first provide written notice of a proposed decrease in an operator’s allocated cap amount and must consider any response made by the licence holder. If the Head, Recycling Victoria nevertheless elects to decrease the operator’s allocated cap amount, it must provide a written notice of the amended maximum amount of permitted waste that can be processed each financial year. This decrease takes effect on the day on which notice of the amendment is given or a later day specified in the notice.
If the licence holder applies for a decrease in the allocated cap amount, then the applicant must provide the Head, Recycling with the following information:5
In determining whether to grant an application to decrease the allocated cap amount, the Head, Recycling Victoria must take into account:
The Head, Recycling Victoria may also take into account any additional matter it considers appropriate.
If the licence holder makes the application for a decrease in the allocated cap amount then the prescribed application fee is payable. This fee is designed to disincentivise prospective WtE operators from oversubscribing to a cap amount in their initial cap licence application. Section 74ZF of the CE Act enables the Head, Recycling Victoria to revoke a WtE licence if the Head, Recycling Victoria is satisfied that the licensee has demonstrated a pattern of processing an amount of permitted waste under the licence that is significantly less than the allocated cap amount.6
Further guidance for potential cap licence applicants about what information must be provided in an EOI and, if the applicant’s EOI is successful, what further information is required for the cap licence application to supplement that in the Waste to Energy Framework is expected to be provided before the Draft Cap Regulations commence. DEECA is currently seeking feedback on whether the mandatory licensing application considerations will help the Head, Recycling Victoria make well-informed licensing decisions.
It is also anticipated that further guidance regarding reporting requirements and licence conditions will be provided by Recycling Victoria before the Draft Cap Regulations come into effect.
Consultation on the Draft Cap Regulations closes on 2 February 2024. You can participate in the consultation by completing a survey or uploading a written submission on the Engage Vic website. Specifically, DEECA is seeking feedback on:
The Draft Cap Regulations constitute the second stage of the WtE Scheme Regulations. Following the commencement of the Draft Cap Regulations, set for 17 April 2024, DEECA has indicated that Recycling Victoria will begin discussions with proponents with a view to commencing the EOI process in the second half of 2024. Public consultation is also expected to open for a third stage of regulations, which will be in relation to the amount and frequency of prescribed periodic fee payable by holders of cap licences and existing operator licences.
If you would like more information on how the introduction of the Draft Cap Regulations might affect your existing operations or future projects, or would like assistance with preparing a submission to DEECA, please contact a member of our Environment and Planning team.
Regulatory Impact Statement, 9.
Regulatory Impact Statement, 11.
Circular Economy (Waste Reduction and Recycling) (Waste to Energy Scheme) Amendment Regulations 2023, s 8.
Regulatory Impact Statement, 30.
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