What is a circular economy?

In a circular economy, materials, energy and other resources are used productively for as long as possible to retain value, maximise productivity, minimise greenhouse gas emissions, and reduce waste and pollution.

A circular economy is different from the traditional linear ‘take, make, use, dispose’ model of production and consumption. Becoming more circular will help us to ensure that we make the best use of our resources. We can do this by encouraging repair and reuse of products, as well as improving processes throughout the lifecycle of a product – from design and manufacture, to consumption and use, right through to collection and recirculation of unwanted products.

The image below shows how material resources flow in a circular economy.

resource flow

The Victorian Government is developing a circular economy policy and action plan by 2020. The policy and action plan will identify ways to grow our economy and increase jobs by improving our resource productivity.

This will build on Victoria’s strong record of continuously improving our waste management and resource recovery capabilities. In 2015 Victoria finalised the Statewide Waste and Resource Recovery Infrastructure Plan, the first long-term, comprehensive state-wide waste and resource recovery infrastructure planning framework in Australia. The Plan sets out the waste and resource recovery infrastructure Victorian needs to manage waste that our growing population will create over the next 30 years.

In July 2018, the Victorian Government launched the Recycling Industry Strategic Plan – a $37 million blueprint to transition Victoria’s recycling system to a more resilient and sustainable model.

The state is facing unprecedented growth. As Victoria’s population grows, so too will the amount of materials we use and discard. By 2046 Victoria will generate almost 60 per cent more waste than it does from 2015 levels. This will increase pressure on our waste and resource recovery system and, without further action, may require the establishment of new or expanded landfills.

International developments also present new challenges. China’s decision to restrict the import of some low quality mixed recyclables in early 2018 destabilised many global recycling markets and led to increased cost of recycling services. The effects of these shifts in global markets were strongly felt in Victoria. In the longer term, this presents an opportunity for Victoria to innovate and grow our domestic recycling capabilities, and build local markets for recycled materials.

Countries, regions and cities around the world such as the Netherlands, Germany, China, the United Kingdom and Japan are also moving toward a circular economy. Victoria’s circular economy policy and action plan is an opportunity to consider the role that each Victorian can play in minimising and managing our waste.

Waste to energy technologies provide an opportunity to recover waste that cannot otherwise be reused or recycled. In late 2017, the Victorian Government released Turning Waste into Energy, a discussion paper to gather views from the community and industry about how waste to energy facilities might fit in Victoria’s waste and resource recovery system.

Since the release of the discussion paper Australia has faced a new set of challenges from major shifts in global markets for recyclables. As a result, considerations around the role of waste to energy are now best included in the circular economy policy and action plan.

Thank you to everyone who provided feedback during the waste to energy consultation process. This feedback will be used to inform directions within the circular economy policy.

Read the Discussion Paper

Turning Waste into Energy (PDF, 1.2 MB)

Turning Waste into Energy (DOCX, 3.1 MB)