EPA Financial Assurances

By on May 3, 2023

DR ELIZABETH GIBSON, General Manager of the CMPA

The Victorian Construction and Demolition (C&D) waste recycling industry is proud of its contribution to the circular economy with many of our members being at the forefront of product development and reuse of construction materials across the State and nationally, these businesses being pioneers in the industry and in business for decades.

Exorbitant financial assurances are now required by the Environment Protection Authority (EPA) for storage of C&D waste waiting for processing on site.
Using the designated formula in EPA Publication 2003.1 “Calculation of financial assurances for landfills, reportable priority waste management and waste and resource recovery facilities”, for a very modest 20,000 tonnes of C&D waste stored on site, leads to a financial assurance of $4.3 million (less project management fees).
Operationally, the C&D recyclables such as concrete and brick must be accumulated (stockpiled) on site to ensure stability of the recycling process i.e., inspection and segregation of materials, preparation for the crushing process, product traceability and in some cases stockpiling until it is at a financially viable volume for processing.

The formula prescribed to C&D recyclables used is the same as that for asbestos contaminated C&D waste.
We understand the intention of the Financial Assurance is to protect the environment and the community from the environmental risks and costs where a recycler is unable to continue or goes bankrupt (as in the case of SKM and Broderick Rd. mixed waste site in Lara) but the current formula
“assumes” that all recyclable material and recyclers pose the same risks and costs and should all be disposed to landfill. This “assumption” is incorrect and only serves to penalise legitimate long-term recyclers such as the C&D recyclers.

C&D stockpiles are very different from SKM and Lara as they are segregated into recyclable stockpiles of concrete, brick and rock which are:
• Inert and not flammable eliminating fire risk.
• They do not generate leachate and/or gas.
• They do not produce odour.
• They have a market value greater than the cost of producing and distributing back to market.
• They have a growing local demand and are therefore not vulnerable to international commodity markets.

In addition, C&D recyclers are very much aware of their responsibilities under the Environment Protection Act 2017 and General Environmental Duty and have had procedures and processes in place for decades to ensure that there is a limited risk of having hazardous material such as asbestos in the accepted C&D waste on site.

The introduction of the requirement for financial assurances in July 2021 has led to a dichotomy within the Victorian Government:

Exorbitant financial assurances will lead to the demise of the low-risk C&D waste recycling industry within Victoria.

6.5 million tonnes per annum of C&D waste will go to landfill; reducing the recoverable waste in Victoria by 65%
(https://assets.sustainability.vic.gov.au/susvic/ReportWaste-Strategic Summary-Report.pdf).

The Victorian Government has a plan for a thriving circular economy (https://www.vic.gov.au/victorias-plan-circulareconomy).

Department of Transport (VicRoads) has road specifications that mandate recycled C&D material.

The CMPA is concerned that the Victorian Government is taking an unnecessarily conservative approach to Financial Assurances and as such developed an alternate (to EPA) Financial Assurance Calculator in consultation with EPA. The alternate calculator was submitted to EPA in August 2022. Subsequently, EPA made a request to conduct site visits. The
following is the letter (redacted in places for confidentiality) addressed to Dr Elizabeth Gibson, General Manager CMPA received from EPA on 24 March 2023.

“Financial Assurance for Waste and Resource Recovery Facilities (A13a and A13b permission activities)

Thank you for arranging our visits to CMPA member sites in late 2022 which allowed EPA to observe the nature of the waste and resource recovery activities undertaken at these premises. EPA also visited a similar CCAA member facility in early 2023.

The following sites were visited:
• Small/regional construction and demolition waste recycling
• Paddock rock quarry operations
• Large construction and demolition waste recycling
• Construction and demolition waste and waste concrete
recycling, and quarry operations

The purpose of the site visits was to obtain a better understanding of the waste and resource recovery operations conducted by your members, to assist EPA in its consideration of the need for financial assurance to be required in the Environment Protection Regulations 2021 – A13a and A13b permissions for these activities. Of particular interest were the types of waste
processed at the sites and the operational controls to minimise contamination content in accepted waste.

Our view from the site visits is that certain facilities, such as those processing for recycling purposes paddock rock, asphalt, tiles, bricks or concrete where there are operational processes in place to minimise contaminants, are unlikely to be required to provide a financial assurance to EPA. Nevertheless, EPA will still undertake site-specific assessments of the need for financial
assurance for each A13a or A13b permission application and have regard to the risk assessment criteria outlined in the Environment Protection Regulations 2021.

Facilities which stockpile glass waste but do not reprocess this waste onsite will be carefully considered by EPA as to the quantities stored and contaminant levels, as this may impact our assessment of the need for financial assurance.

EPA is about to commence a program of work on the financial assurance framework which includes developing an alternative calculation methodology for waste and resource recovery facilities. We propose to include in this consideration the method developed by CMPA and liaise with you during this project.

It was also noted during our inspection that not all facilities may have submitted (or determined the need to submit) applications for A13a or A13b permissions to the EPA permissioning team as they were required to do by 1 October 2021. We recommend that this need be highlighted with your members, and any queries be raised with the permissioning team.”

The CMPA looks forward to working productively with the EPA on this matter.

See FAQs p. 36-37 for further information on whether you require permission from EPA.

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