Who's really footing the bill for Australia's plastic recycling mess?

Remember when dropping your soft plastic bags into that bright red bin at the supermarket felt like doing your bit for the planet?

Well, those days might be coming back—but this time, you could be paying extra at the checkout for the privilege.

Major supermarkets Coles, Woolworths, and Aldi are pushing a new recycling scheme that promises to clean up the mess left by the spectacular collapse of REDcycle. But environmental advocates warn the fine print reveals who's really calling the shots—and who's likely to pay the price.

The $16 million disaster that shook Australia

REDcycle collapsed in 2022, leaving behind an estimated 11,000 tonnes of stockpiled soft plastic across 44 locations in Australia, after it was discovered that instead of being recycled the soft plastics were stockpiled in several warehouses across New South Wales, South Australia and Victoria causing an environmental and fire risk.

For millions of Australians who'd been diligently collecting their bread bags and chip packets, the collapse of RedCycle in November 2022 was a shock revelation for many Australians who had been diligently separating their soft plastics to return to their local supermarket for collection. Even more galling was discovering that less than five per cent of consumer soft plastic was collected by the REDcycle program despite the widespread promotion.

The supermarkets stepped in to clean up the mess, assuming responsibility for the REDcycle stockpiles in February 2023. But now they want that $16 million back—and they've got a plan for how to get it.

The new scheme: Who pays and who profits?

The Soft Plastics Stewardship Australia (SPSA) plan being considered by the ACCC would charge companies a levy for every piece of soft plastic packaging they put on shelves. Starting at one cent per item, the fee would climb to four cents over several years.

But here's the rub: there's nothing stopping those costs from being passed straight to consumers. Kirsty Bishop-Fox from Zero Waste Victoria warns shoppers shouldn't be surprised if these fees end up 'baked into the price of groceries.'

The scheme's structure raises serious questions about accountability. Unlike aluminium recycling, where the material has genuine value, it often costs more to recycle most plastics than to just throw them away. This fundamental economic reality drives the need for the levy—but it also explains why companies are eager to shift these costs elsewhere.

A scheme designed by supermarkets, for supermarkets

Perhaps most concerning is who's running the show. The SPSA board would include supermarket and manufacturer representatives alongside just two independent members. For critics like Bishop-Fox, this raises red flags about whether the scheme truly serves the public interest.

'They're not talking about what they're doing to reduce plastic, and we know that people are frustrated going shopping and seeing plastic that they can't avoid,' she pointed out. The scheme focuses entirely on recycling without any binding commitments to reduce plastic packaging at the source.

This is particularly significant given Australia's plastic consumption habits. According to research by the Minderoo Foundation, Australians generate more single-use plastic waste per capita than any other country in the world—about 60 kilograms a year. According to the government's National Plastics Plan, Australia goes through 70 billion pieces of soft plastics each and every year—that's almost 3000 pieces per person.

International lessons we're ignoring

Other countries have taken different approaches to the plastic problem. In 2021, Maine became the first US state to adopt an EPR law for plastic packaging—extended producer responsibility schemes that require manufacturers to pay for the entire lifecycle of their packaging.

Under EPR systems, companies can't simply pass costs to consumers through a levy. Instead, they're incentivised to redesign packaging to be more sustainable, as this directly impacts their bottom line. This involves laws and regulations requiring plastics producers and manufacturers to pay for the recycling and disposal of their products.

The fundamental difference is accountability. While the SPSA scheme lets companies tick a sustainability box while potentially charging consumers more, EPR schemes force genuine change in packaging design and material choices.

What this means for your hip pocket

The supermarkets argue the levy is necessary because most plastics can only be recycled in pure and consistent form, and only a limited number of times. What's more, municipal plastic waste streams are very difficult to sort. They're not wrong about the technical challenges—but the question remains whether consumers should bear the financial burden.

For households already feeling the pinch from rising grocery costs, even small additional fees add up. And unlike a carbon tax or other environmental charges, this levy comes with no guarantee of genuine environmental improvement—just a promise that the same companies causing the problem will manage the solution.

The recycling reality check

The harsh truth about soft plastic recycling is that it's inherently challenging. One of the biggest problems with plastics recycling is the massive diversity of plastics that end up in the waste stream—foils, foams, sachets, numerous varieties of flexible plastic, and different additives that further alter plastic properties. Most plastics can only be recycled in pure and consistent form, and only a limited number of times.

Current attempts to restart collections are proving this point. Close the Loop has returned as a partner in the supermarkets' latest attempt at sustainable soft plastic disposal, but has again suffered disruptions. The company was recently forced to pause processing for several months after an equipment failure.

What you can do about it

While the ACCC considers the SPSA application, consumers aren't powerless. Here are practical steps you can take:

Reduce your plastic footprint:

• Choose products with minimal or alternative packaging where possible
• Bring reusable bags and containers for loose items
• Support brands actively reducing plastic packaging
• Consider farmers' markets and bulk food stores

Make your voice heard:

• Submit feedback to the ACCC about the scheme
• Contact your local MP about plastic packaging regulation
• Support organisations advocating for stronger environmental controls

Stay informed:

• Follow ACCC announcements about the final decision
• Monitor supermarket pricing for signs of levy implementation
• Keep track of genuine recycling alternatives in your area

The bottom line

The SPSA scheme might sound like progress, but it's essentially asking consumers to pay for a solution designed and controlled by the same companies that created the problem. Bishop-Fox's assessment is blunt: 'They need to be making solid efforts to reduce plastic, not just focus on recycling.'

Without genuine regulatory oversight or binding commitments to reduce packaging, the scheme risks becoming another cost that flows from corporate boardrooms to household budgets. And given the supermarkets' track record—from the REDcycle collapse to their push for cost recovery—trusting them to self-regulate seems optimistic at best.

The real question isn't whether Australians want better plastic recycling—we clearly do. It's whether we should have to pay extra for the privilege while the companies profiting from plastic packaging get to set their own rules.