Rubbish will pour into bursting landfills, the recycling industry will stall and greenhouse gas emissions will rise in a perverse side-effect of the federal government’s carbon tax, critics have warned.
Recyclers are making a last-ditch plea to the Climate Change Minister, Greg Combet, before the scheme’s introduction on July 1 to reward those who avoid emissions by diverting and reusing waste, putting the fledgling industry on an even playing field with landfill operators who could collect a $1 billion windfall under the fixed carbon price.
Landfill generates 10 per cent of Australia’s methane emissions as food, paper, garden and wood waste decompose. Methane is at least 21 times more powerful at warming the atmosphere than carbon dioxide.
However under the carbon tax, recyclers will not be granted incentives for the methane emissions they abate by diverting waste. In contrast, landfill operators can generate credits by capturing methane from existing waste to flare or convert into energy.
A leading resource recovery consultant, Matthew Warnken, said landfills would receive an unfair commercial advantage which reduced pressure to divert and reuse garbage.
”The trend will be to force [the recycling industry] out of any expansion phase, and some businesses will be put under significant duress,” he said. ”Closing will be options that they will consider.
”The net balance is that there will actually be an increase in greenhouse gas emissions from the [waste] sector.”
Landfills which generate more than 25,000 tonnes of greenhouse gases a year will pay the carbon tax from mid-2013.
Mr Warnken estimates that over the three-year fixed price period, landfills’ carbon tax burden will be far outstripped by carbon credits and a rise in gate fees, leaving the industry an estimated $993 million net bonus to offset their future carbon tax bill.
The chief executive of the Australian Council of Recycling, Rod Welford, predicted that landfill would remain a cheaper option than recycling over the long term, and the pressure of reduced revenue and energy cost blowouts would hurt the recycling sector’s growth.
Recycling rates in NSW have risen steadily over the past decade, although operators in some segments, such as household waste, have struggled to reach full capacity.
A spokeswoman for Mr Combet said the landfill sector is likely to generate enough credits to meet its carbon tax liability until 2020, but insisted the scheme would encourage landfill operators to divert and recycle waste.
”This incentive is not reduced by the fact that there may be opportunities for landfill operators to earn carbon credits by reducing emission from legacy [existing] waste,” she said.
A spokeswoman for the Australian Landfill Owners Association, Elisa de Wit, said suggestions that income generated from carbon credits would outweigh a landfill’s carbon tax bill were ”yet to be proven”.
She said a number of landfills, such as those in Victoria, already capture methane to comply with state environmental regulations, and pursuing further cuts may not be economically viable.
Any income gained by passing on the carbon price during the fixed period would be required to cover future carbon liabilities, she said.
Ms de Wit questioned claims the industry was in line for a $1 billion windfall, saying the proportion of methane emissions to receive carbon credits had not yet been determined.
