REDcycle collapse prompts calls for government bans, regulation and legislation

REDcycle’s collapse has prompted industry wide calls for government action and responsibility for the continued recycling of soft plastics in Australia.

Liz Kasell, founder of soft plastic recycling service REDcycle, has announced that the company will be ‘temporarily’ shutting down.

The collapse of Australia’s only soft plastic recycler was inevitable, industry experts have ­declared, after reports revealed REDcycle had secretly stored millions of items in warehouses for months.

Environmental consultant Peter Allan backed industry calls for bans on soft plastic manufacturing and wider government regulation of soft plastic recycling after the collapse of the ­Melbourne-based company.

While REDcycle has defended its decision to warehouse items as necessary, the lack of transparency has been criticised as unsafe and “unforgivable”.

“We’ve seen enough storage warehouses go up in fire to know that this is not the right thing to do,” Mr Allan said. “This is problematic and poor communication (from REDcycle) – it appears supermarkets and other brands who essentially fund the system were not told that this material has been warehoused rather than recycled – that’s unforgivable.”

REDcycle’s focus on ‘down cycling’ soft plastics has been blamed for the company’s downfall with experts saying it was an unsustainable business model. Picture: Martin Dean

The collapse has been flagged as a symptom of Australia’s highly unregulated soft plastic manufacturing industry.

“Some brands are putting components and polymers into their packaging that are essentially not recyclable,” Mr Allan said. “And with soft plastics it’s almost impossible to sort millions and millions of very lightweight bags. So we ought to be phasing out the use of polystyrene and PVC altogether and we need to heavily restrict the use of some other polymers ... So, the government needs to step in and ban those problematic plastics.”

Coles chief executive Steven Cain said the supermarket was in talks with the Australian Competition & Consumer Commission to approve an industry-wide response to soft plastic recycling in light of REDcycle’s collapse.

“In Australia there needs to be more processing capacity; what’s happened is there has been a 350 per cent increase in the amount of product (plastics) coming back,” Mr Cain said.

“So one of the things we are looking at is getting ACCC approval as soon as we can to work together collectively on this and the government has said they will try to expedite that process.”

A fire broke out in one of REDcycle’s recycling plants in Victoria this year. The company has since announced that the “untenable pressure” generated by the exponential increase in demand plus “unforeseen challenges’ had forced the company to “temporarily” shut down all operations.

REDcycle has denied that the decision to warehouse items was a “secret coverup” but a “stop gap until the soft plastics recycling industry is operational again”.

“It’s inevitable when you’re making products or trying to make products that nobody buys,” Ms Sloan said.

While REDcycle’s down cycling initiatives were highly praised, slow uptake and low demand for their products meant the company was processing significantly higher numbers of soft plastic than needed.

Ms Sloan said instead of turning soft plastics into something else, future soft plastic recycling needs to focus on prioritising recycled soft plastic components over “virgin” components during the manufacturing of soft plastics.

“But we’ve seen that the market itself will not deliver the outcome,” she said.

Ms Sloan said Australia should look to implement something similar to France and UK’s ”virgin” plastic tax which taxes manufacturers who choose to use “virgin” plastics instead of recycled plastics.