Landfill levy //

The great landfill levy

a missed opportunity?
By Mike Haywood
I HAVE been promoting the concept of
governments collecting their own waste
disposal levies for a while now but the
time seems ripe for both industry and
governments to get behind this notion.
Never in the more than 25 years
spent in this industry have I seen such
turmoil and gaming of the rules or such
abuse of terms such as level playing
field as I do today across all states
that have a waste levy.
While the intent behind the
introduction of levies was positive to
develop recycling programs it has,
unfortunately, created an environment
for some unscrupulous operators to
manipulate the system.
The blame should not rest solely
on industry; it is incumbent on
governments of all persuasions to
design programs that mitigate the
risk of manipulation of margins that is
occurring on the fringes of our industry.
In short, the system is susceptible
to abuse and encourages the
transportation of waste across borders,
an issue that has been discussed time
and again in the media. The system
also allows for stockpiling and even
illegal dumping, all in an effort to
avoid paying the levy.
State and territory governments
have a social, if not legal obligation
to stop these activities as the money
does not belong to the waste collector
by default but it is a reward by way
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INSIDEWASTE APRIL 2016

of a rebate for appropriate activity,

i.e. appropriate and approved resource
recovery activities that result in the
avoidance of landfill disposal.

A perverse outcome
There are millions of dollars in levy
avoidance, all of which are going into
some industry coffers for what can be
described (at best) as inappropriate
and unconscionable conduct.
Just cast your eye towards NSW
where it has been estimated that
30,000 tonnes of waste leave the state
every week (think: waste crossing
the border into Queensland). At $133
a tonne, that is a levy leakage of $4
million a week.
Given NSWs levy sits right at the
top of the range and some jurisdictions
have no levy, the state is not in an
enviable position because industry
will always dump where disposal costs
(which includes the levy) are cheapest
if they can get away with it.
Moreover, the volume of airspace
available in most states there are
landfills with more airspace than
volume of waste available coupled
with the regulators lack of ability to
control what is happening in industry,
has left us with a scenario where a
number of facilities are operating very
close to the legal and financial edge
so in effect, those that are trying to
operate within the legal framework
are forced to be recalcitrant to stay in
business.

Meanwhile, in South Australia,

there has been a significant change
in direction in waste management
over the last decade, particularly with
the closure of the Wingfield Waste
Management Centre as a landfill and
the introduction of levies (currently
$55/tonne). However, there are now
questions around whether these
measures have had the desired effect
of directing waste to resource recovery
facilities.
It appears there has been a perverse
outcome in that some of the waste
diversion is as much about levy evasion
as it is about resource recovery and in
SA, stockpiling and illegal dumping
are some of the many issues that have
come up.
The core of the problem lies with the
way the levy is applied and collected.
Since the levy is collected by the
landfill operator or depot, there is no
incentive for them to move the waste
to the landfill since doing so will
trigger payment of the levy; hence the
stockpiling. Perhaps one of the more
notorious stockpiles of material can
be found on the now closed Adelaide
City Council Landfill currently known as
the Wingfield Waste Management Centre
(WWMC), which has caught fire not once
but six times since October 2011.
These fires have not only saved the
operator in disposal fees, the operator
has also kept the levy component that
should or would have been paid when
the material had been appropriately

The current levy system is forcing a race to

the bottom, says Mike Haywood.

disposed of. Not only did the state

miss out on the landfill levy, it also
paid to put the fire out!

Possible solutions
A better system is for the levy to be
paid directly to the Treasury and only
when the operator recycles material
through an EPA-approved process,
distribute the commodities to, again,
an EPA-approved facility, and produces
EPA-approved products can they claim
their levies back.
In the WWMC stockpile case involving
the fire, if this had been done, and the
government had collected the levy
upfront, the operator would not have
been able to recover the payment
as any waste would not have been
recycled in an approved facility. This
would have stopped the stockpiling
in its tracks since a facility cannot
operate on $25-$30 a tonne.
When it comes to regulating the
sector, some in the industry have for
the last 10 years or so been advocating
for mass balance reporting.
Such an approach would give the EPA
the tools to regulate the recalcitrant
operators by establishing a sound basis

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// Landfill levy

for benchmarking recycling outcomes

available and can be equipped with
versus stockpiling.
things like cameras and e-tags, there
To ensure that mass balance
is no reason why live data cannot be
reporting is appropriate, accurate and
recorded, monitored and reported to
auditable, the following performance
the EPA.
management tools should be key to
The regulator should also have a
any program:
live feed from the weighbridge so it
Ring fence the waste site (one
can charge the levy directly to the
way in and one way out over a
disposing company. This technology is
weighbridge).
available and would not be too different
Physical separation of landfill and
from current road toll technology; only
resource recovery operations.
instead of charging sectors by distance
Use of cameras boom gates and
travelled, the charge would be made on
e-tag readers on weighbridges.
the basis of tonnes delivered.
Live reporting to the EPA.
Yes, this may take a little planning
EPA invoices and collects levy
and thought, but it would be up to
payments direct from the customer.
the disposal facility to claim back the
There is also a grey area in the market
levy component for waste recycled at
due to the lack of clarity in waste
an approved depot and not disposed
stream management and classification
to landfill. Cash transactions would be
making it difficult for EPAs to regulate
completed as normal and each month
sites and ensure appropriate levy
the facility would be able to claim back
compliance. This further proves my
levy rebates for the sales of approved
earlier point that direct payment of
recycled products or commodities
levies to the regulator by the waste
based on the weighbridge transactions
producer, not the landfill, is the way
recorded at the time of egress.
to go, because it puts the onus on the
The next step periodic volumetric
operator to gain the refund.
surveys of landfill depots may be
Additionally, since weighbridges are
viewed as background noise that do
already on sites that receive more than
not actually achieve too much by way
10,000 tonnes of waste a year and
of relevant information to the EPA and
with modern
weighbridge programs
it is 1acknowledged
that there
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variables in the process especially

as pre-sorting programs are being
introduced at source.
Added to this challenge is the fact
that the efficiency of the operator
and the size of the waste compactor
can make the compaction of waste at
landfill, and therefore tonnes per cubic
metre, very hard to evaluate.
As the solid waste levy is paid at the
landfill gate based on tonnes received
for disposal, the issue for the EPA is to
ensure that the net weights of materials
are established and appropriate waste
levy revenues are being forwarded to
the EPA.
Formula for assessing the leviable
net weight:
Gross weight (GW): when vehicle
enters site.
Tare weight (TW): when vehicle exits
site.
Leviable net weight: GW-TW.
Since the efficiency or otherwise of
the management of the actual landfill
air space operations is of no value to
the regulator, the only metric that
should be measured and reported is
weight.
There would be significantly more
value to the outcomes that EPAs are
trying to address by ensuring that

there is only one way into a landfill

and only one way out of a landfill and
that is over the weighbridge. A weight
measurement would be taken on the
way in and then again on the way out
and any reduction of weight would
attract the relevant levy charges.
Finally, there should be a tightening
of waste transport licencing policy and
it would be a simple position to add to
the licence fee of any licenced waste
facility a condition that the waste
transporters they engage need to be an
EPA-approved and licenced carrier.
The current system is forcing a race to
the bottom and it is up to the industry
to push for change, as governments
seem reluctant to put more regulation
on the sector without request.
But if any of the states or territories
were to lead from the front on this one
they would be setting the standard and
any industry player that argues against
this clearly is missing the point or may
have something to hide as they would
not be competing for waste volumes
against inappropriate behaviour.
Mike Haywood is principle consultant
at Mike Haywoods Sustainable
Resource Solutions. Contact:
iw
mike@mikehaywood-srs.com.au

CM

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APRIL 2016 INSIDEWASTE

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