By Raphael Geminder

Taxpayer-funded recycling plants are collapsing while plastic packaging waste is piling up in landfill

The Australian Government has spent heavily to build new plastics recycling facilities, but without promised packaging laws to feed those plants, the system is starting to fail.
News that South Australian soft plastics processer Recycling Plastics Australia has fallen into administration just two years after securing a $20m federal grant is the latest in a spate of bad news for Australia’s recyclers.
Since Anthony Albanese became Prime Minister, at least five plastics recycling facilities have collapsed, others are running well below capacity, and more than one million tonnes of plastic packaging waste is still being buried in landfill every year.
This is not a technology failure. It is a policy failure. The Australian Government banned the export of plastic waste and funded plastic recycling plants to the tune of $137 million, but it then failed to create the market conditions needed to make the recycling plants viable.
The core economics are brutal. In many cases, it costs more to recycle the plastic packaging waste than the recycled material is worth. That is why industry backed promised national packaging reforms based on Extended Producer Responsibility, an approach used in the EU and UK to make brand owners responsible for the packaging they place on the market.
The reforms were meant to introduce mandatory design, recyclability and recycled-content obligations so more packaging could be recovered and remade in Australia, rather than dumped.
But in August 2026, Federal Environment Minister Murray Watt confirmed a national packaging scheme would not be introduced in this term of government, citing cost-of-living concerns, despite being committed to by Federal, State and Territory governments three years earlier.
The decision to delay national packaging reform risks wasting taxpayer investment, undermining local recycling jobs and locking Australia into a landfill-first plastic waste solution at the exact moment it should be building sovereign recycling and manufacturing capability.
The Government must keep its promise to introduce national packaging reform and deliver mandatory rules that require packaging to be designed for recovery, reuse and recycling, and oblige brand owners to use recycled content in their plastic packaging.
In the absence of these promised reforms, more plastic recycling plants are at risk of closing their doors and the Government may be forced to prop up the sector with financial support to avoid an economic and environmental mess of its own making.