The Waste Contractors and Recyclers Association (WCRA) has predicted the Federal Government’s plans to reduce fuel assistance for transport, which have already started, will result in higher waste processing costs and in some cases make the recycling of material from remote and regional areas financially unviable. The Queensland Trucking Association said the carbon plan could pose a cost to its industry of more than $500 million in 2014-15.
The predictions have come from the Waste Contractors & Recyclers Association (WCRA) as a result of two government announcements. Firstly, the Australian Taxation Office announced that fuel tax credits would fall to 15 cents per litre for vehicles greater than 4.5 tonnes effective from July 1st this year. Further, in conjunction with the carbon price announcement, the Federal Government said that the diesel fuel tax credits would fall again on July 1st, 2014 to match the carbon price.
The Queensland Trucking Association has estimated that the fall in diesel fuel tax credits received by trucking operators for on-road use from July 1st, 2014 to match the planned carbon price of $25.40, could cost the industry and its customers $510 million in 2014-15.
In its briefing documents on the carbon tax, the Federal Government wrote that changes to fuel tax credits and excise to reflect the carbon price will be based on the specific emissions intensities of CNG, LNG, LPG, aviation gasoline, aviation kerosene, petrol and diesel, with all other liquid fossil fuels based on the diesel emission rate.
The Federal Government also wrote that future fuel prices would continue to be linked with the carbon price. “Adjustments to credits and excise will be annual during the fixed price phase and every six months (based on the average carbon price over the previous six months) during the flexible price phase.”
Tony Khoury, executive director of WCRA in NSW told Inside Waste Weekly that the waste industry was very sensitive to any change in the price of diesel, as trucking was a core component of the waste business.
“Our waste and recycling trucks visit every house and every business as a minimum once a week…there is no other part of the heavy vehicle transport sector that does that any more,” he said. “Every machine in every landfill, in every transfer station and in every waste facility operates on diesel.”
Khoury also said that increased electricity prices would effect the processing of both waste and recyclables. “All of the recycling lines and the material handling lines rely on electricity. So if your plant is going to be driven by electricity and your loading equipment relies on diesel – it then follows that there will be cost increases.”
In turn, Khoury predicted that this would affect the viability of local recycling operations. “There might be some materials that may not be processed in Australia, if processing costs are significantly affected,” he said. “That already happens with some metals, because of the unintended consequences of the waste levy.”
Rick Ralph, executive director of WCRA Queensland echoed Khoury’s sentiments. “We are 100% reliant on transport at some point in the waste and recycling chain to get anything done,” he said. “Any impacts anywhere in this chain of operation directly affect our business costs which in turn we have to pass through to the customer.”
Ralph said the Queensland waste industry was particularly susceptible to effects of the increased transport costs, noting that the state was the most “demographically decentralised state in Australia. “This meant that increased transport costs would reduce the viability of removing recyclables from remote and regional centres.
“I can foresee without any doubt certainly in many remote and regional areas in this state that industry…will stop pulling recyclable products,” he said, noting that such products could include “light gauge metals, used tyres, electronic wastes and maybe cardboard and plastics”.
