6.5. Moving to a circular economy

Te whakawhiti ki tētahi ōhanga porowhita

The environment comes under pressure from human settlement. Our infrastructure supports efforts to reduce waste and improve our environment.

New Zealand produces a lot of waste. We send too much waste to landfill and lack the facilities to recycle much of what we consume. More importantly, we’re yet to truly embrace the culture of reducing and designing waste out of our society. This takes bold action.

Infrastructure will play an important role. We need to make different choices about how we provide and manage waste and recycling. We have an opportunity to minimise waste and recycle materials as part of the planning for and construction of infrastructure. Projects can be designed and procured to minimise construction waste and reuse materials at the end of a facility’s life. Waste can also be recycled in useful ways. For instance tyres can be burned to make cement, used plastic can be converted to asphalt for roads, and waste can be used to make energy. With some ingenuity, investment in the right infrastructure and a commitment to more sustainable living, we can dare to aspire to a zero-waste future.

6.5.1. Context

New Zealand has a waste problem.

New Zealand is among the top waste producing nations in the OECD.²⁵⁸ Annually, we throw away around 3.2 tonnes of waste each.²⁵⁹ We also have the lowest rate of recycling or reuse of waste materials, with only 35% of our waste recycled or reused.²⁶⁰ The rest is sent to landfill, impacting our environment and, as it breaks down, creating greenhouse gases. Waste is the cause of 4.6% of New Zealand’s gross greenhouse gas emissions.²⁶¹

Waste from construction and demolition is the largest source of waste in New Zealand, accounting for 50% of all landfill waste.²⁶² Businesses and industry are responsible for 24%, while kerbside waste collection and other waste sources in our towns and cities create 12% of landfill waste.²⁶³ Our farms and other rural sources account for 10%. Unless we make major changes, our growing population, as well as growing incomes, will only increase the number of things we consume and throw away.²⁶⁴

All this waste requires infrastructure like landfills, transfer stations and recycling centres. Reducing the amount of waste we create can also reduce the number of these facilities that we need to build.

A circular economy can reduce the impacts of waste.

A circular economy is one where waste materials are reused, recycled or not used in the first place, so they never get thrown away. It relies on three principles:

• Design out waste and pollution.
• Keep products and materials in use.
• Regenerate natural systems (such as estuaries and forests where natural materials break down and contribute to plant or animal growth).

Moving to a more sustainable waste system can also create jobs and economic opportunities. It’s estimated that every 10,000 tonnes of waste that are recycled require 9.2 full-time employees, compared to 2.8 for managing the same amount of waste sent to landfill.²⁶⁵ There are also jobs involved in sorting and transferring materials and transforming them into new products and in processing in New Zealand instead of sending them offshore.²⁶⁶

He tirohanga Māori i te ōhanga āmiomio: Māori views on the circular economy.

Māori have a holistic understanding of our environment and see it as an interconnected whole. Māori express a connection with the environment through kaitiakitanga. This respect for natural resources is demonstrated by maintaining their value for as long as possible before they reach the end of their lives, at which point they’re disposed of in a way that causes the least harm to the environment. In this way, Māori views on waste and recycling precede the concept of a circular economy (ōhanga āmiomio) but similarly acknowledge the mauri (life force) of natural resources.²⁶⁷

6.5.2. What we’ve heard

There was strong support for reducing waste among respondents to the Aotearoa 2050 survey. “Our lack of recycling means we create too much waste” was ranked as the second most important infrastructure issue, with two out of three respondents rating it as ‘very important’. 85% of people said that reducing waste was the best way for New Zealand to prepare for the impacts of climate change. Through both the survey and our consultation process, we learnt that many people felt that a strategic direction for waste infrastructure was needed. Submitters on our consultation document wrote that New Zealand lacked infrastructure for recycling and waste management and this was particularly bad for certain waste products and locations. A strategic approach was seen as important to lift performance and reduce costs.

We also heard that:

• There was a lack of infrastructure to deal with organic waste, other than landfills.
• The potential for waste-to-energy needed to be considered objectively as a way of dealing with waste in New Zealand.
• Relying on the waste disposal levy alone, without alternative ways of dealing with waste, would not reduce the quantity of waste going to landfill and could even lead to worse outcomes like illegal dumping.

6.5.3. Strategic direction

Setting a national direction for waste

A waste strategy will provide direction and help standardise services.

New Zealand introduced the Waste Minimisation Act in 2008 and the New Zealand Waste Strategy in 2010 with the aim of reducing and managing waste. Both rely on local governments to develop and implement their own waste-management policies. Implementation and outcomes vary considerably, but the overall trend has been toward increased waste. Between 2010 and 2018, municipal waste per capita increased by 35% in New Zealand, compared with an average increase of only 3% in all OECD countries.²⁶⁸

A National Waste Strategy that sets out a path towards a circular economy would help to align these varied approaches to waste management and make it clear where councils and others should be investing in waste infrastructure. The development of a waste strategy is on the government work programme, as is reform of the waste sector. A clear governance structure for moving towards a circular economy, with a minister and lead agency responsible for assessing and implementing actions, would be an important first step.²⁷⁰ Central coordination would provide best -practice guidance on how to support a circular economy as part of the pathway to our net-zero carbon emissions target. Supporting legislation and regulation may also be needed for a shared, New Zealand-wide approach.

A waste strategy should include:

• Direction on improving the infrastructure for recycling and processing organic material.
• Strengthening markets for recycled materials.
• Removing barriers to reducing waste.
• Improving planning for any waste infrastructure that’s still needed.

It could also help standardise some services, such as kerbside collections and container-return schemes. This could be further strengthened by setting a target of zero-waste to landfill by 2050.

Good decision-making requires good data.

A lack of data makes it hard to make good decisions about recycling and waste infrastructure and services. Currently, there’s limited publicly available and comparable data on how much waste New Zealanders produce, how it’s disposed of and how much waste and recycling infrastructure capacity we have. This is a blind spot that limits our ability to create policy, plan and invest.

In 2013, waste industry group WasteMINZ was granted funding to develop a National Waste Data Framework in partnership with local government. The framework was completed in 2015 but has not been fully implemented.²⁷¹ Funding and resources are needed to put the framework into place and to identify types of waste that New Zealand could be recycling, as well as opportunities for reducing waste.

Managing pressure on landfill and waste recovery facilities

A circular economy requires a new approach to waste infrastructure.

Figure 27 shows the ideal waste-management hierarchy, where reducing waste takes priority over methods like recycling and landfill that still need infrastructure. A movement towards a circular economy will prioritise redesigning waste out of production and developing more ways for reusing what would otherwise be waste.

Achieving this requires a different approach to waste infrastructure. It means reducing our reliance on waste-disposal infrastructure and instead increasing the need for infrastructure that can help with reusing or recycling waste materials. For any waste where recycling or reuse isn’t possible, a clear direction will be needed on waste-to-energy, a process where waste is burned to generate electricity.

Options to reduce waste should be considered before options that require infrastructure

Figure 27: Waste management hierarchy

Developing ways to minimise waste: redesign, reduce and reuse.

The best way to reduce the need for waste infrastructure is to prevent waste entering the market in the first place. Encouraging waste-reducing behaviour among consumers, like repairing broken items or buying reusable items, is one way of achieving this.²⁷² Another option is to regulate to reduce waste at the source, for instance by introducing product-stewardship schemes for hard-to-recycle plastics and electric batteries, or preventing the sale of products that are difficult to recycle.²⁷³

Changing the way we pay to encourage recycling and waste reduction.

The way we charge to send waste to landfill can encourage people to reduce waste.²⁷⁴ General taxation methods like rates don’t create enough incentives to reduce waste. More targeted prices can be effective, as has been proven overseas. When the United Kingdom increased the cost of disposing waste at landfill, it saw a major decrease in the amount of waste going to landfill (see Figure 28). New Zealand is currently increasing its waste-disposal levy and it will eventually be $60 per tonne, but further increases, at a minimum to adjust for inflation, should be considered over time.^275,276

Waste disposal levy increases can help manage demand and contribute to social objectives

Figure 28: United Kingdom waste tax rate (per tonne) and tonnes of waste landfilled 1996 to 2016

Resource recovery infrastructure is needed for priority materials.

New Zealand lacks the infrastructure we need to recycle or recover many materials. There’s a need to improve infrastructure for collecting and processing recyclable materials and organic waste. This infrastructure would keep more waste out of landfills and reduce the emissions caused when waste breaks down.²⁷⁸ The cost of investing in recycling and organic waste infrastructure is estimated to be between $2.1 billion and $2.6 billion, along with an additional $0.9 billion in operational funding over the next 10 years.²⁷⁹

There are barriers to improving waste recovery. For instance, it can be difficult to access recycling services, especially when there are long distances between the areas where the waste is created, where it is recycled and the markets where the recycled material is sold. This can make recycling infrastructure more economical in cities and large towns than in small towns and rural New Zealand.

To work well, recycling and organic collection needs to be simple, easy and consistent. Currently, there are large variations across New Zealand in how we recycle. While all New Zealand councils offer recycling services, 10 councils either have drop-off only services or privately provided kerbside recycling services. There is no standardisation of recycling collection methodology in New Zealand. Councils determine what is collected, how clean the waste must be and what materials are collected together.²⁸⁰ A simple and consistent sorting and collection system would improve our rate of recycling and the quality of the recycled materials we produce. This is important for the market value of recycled materials.²⁸¹ In Auckland, 12% of household recycling is contaminated with food or other waste, which makes recycling infrastructure less economical to build and operate.²⁸²

Recycled materials can be part of our infrastructure.

We can use more recycled materials within New Zealand and one opportunity is in the construction of infrastructure itself. As Case Study 10 illustrates, recovered materials can be used in infrastructure construction and maintenance. Increased local demand would encourage people to invest in recycling infrastructure here, instead of sending waste overseas to be recycled where it could be vulnerable to changing prices and import bans. Doing this would require government and waste-service providers, like councils, to take a coordinated approach in deciding which recycled materials could be used or sold within New Zealand. Increasing emissions trading prices and an increase in the waste disposal levy could also make opportunities like these more financially appealing.

Reducing construction and demolition waste is good for efficiency and the environment.

With construction waste making up the largest proportion of the waste we send to landfills, we need to focus on reducing this and increasing recycling in the sector. When done well, this can reduce costs for construction businesses by reducing landfill charges and using construction materials more efficiently.

Waste can often be reduced during the planning phase of a project.²⁸⁶ Procurement specifications for public sector infrastructure could be used to help reduce waste. For example, they could prioritise designs and materials that produce a lower amount of waste. They could even factor in disassembly and the reuse or recovery of materials at the end of the infrastructure lifespan, something known as ‘designing for deconstruction’. Using prefabricated parts can also help reduce waste. This is because it’s easier to recover and reuse waste from a factory dedicated to making a particular part than on a construction site where it can be mixed with many other types of waste. Finding ways to use recycled materials in construction can also add to the demand for these materials.

Other options to encourage the reuse of materials in construction include:

• Developing a resource exchange mechanism to minimise waste creation.²⁸⁷ This is software for matching surplus materials and products to needs for those materials and products. There are some resource exchange mechanism services in development in New Zealand, such as CivilShare,²⁸⁸ and the sector could look at expanding these to support infrastructure construction.
• Investing in new facilities that can sort and store waste materials from construction, demolition and commercial industries, then recirculate them to construction activities and other markets.²⁸⁹
• Reviewing building-material regulations to ensure they allow for the use of reused and/or recycled building materials.

Developing waste-to-energy for the waste we still produce

Waste-to-energy can play a role in the waste system.

We want to reduce the amount of waste produced in the first place and reuse or recycle it when this isn’t possible. Where waste can’t be prevented or dealt with in these ways, then using it to generate energy is preferable to dumping it in a landfill. This is known as waste-to-energy and most commonly involves incinerating waste to generate electricity or heat for industry. It can also include capturing the gases created when materials break down over time (for instance, converting organic wastes to biogas/ biomethane).²⁹⁰ It’s important that waste-to-energy is only used to replace disposal to landfill, not replace recycling or disincentivise efforts to redesign and reduce waste. The use of waste-to-energy also needs to be considered carefully in the context of New Zealand’s current renewable-energy goals.

Government guidance is needed.

Case Study 11 illustrates how using waste as an energy source can reduce carbon emissions and pressure on landfills. The Ministry for the Environment released guidance on waste-to-energy proposals in 2020.²⁹¹ The guidance outlined key questions that investors in waste-to-energy plants should address but didn’t establish a government position on the future role of waste-to-energy or preferred technologies. A clear position would provide greater certainty and help make it clear when this would be an option or when materials should be targeted for recycling.²⁹²

6.5.4. Recommendations