National soft plastics recycling venture REDcycle is reported to have collapsed with debts in excess of $5m, the end brought about by its inability to pay for the increasing amount of storage it was using.
REDcycle paid the price for its inability to source onshore soft plastic recycling operations, as its collections soared while its recycling options diminished to virtually zero.
This, combined with REDcycle's alleged decision to not tell either the public or its supermarket partners that it was unable to recycle most of its collected soft plastic in the second half of last year, led to a collapse in consumer confidence in the ability of the packaging industry to recycle soft plastic.
RG Programs & Services, which traded as REDcycle, was wound up in February by court order following applications by transport companies BTG Logistics and Topline Logistics. The former claimed REDcycle had not paid it $200,000 for storing some 600 tonnes of soft plastic.
The largest creditor of REDcycle is IQ Renew, with which it had planned to merge, which is owed $1.6m. The ATO is owed $411,000 while employees are owed $62,000.
REDcycle is reported to have collected in excess of $20m in fees over the past decade from the nation’s supermarket giants – and the country’s biggest soft plastics producers – Coles and Woolworths, but allegedly did not inform them that for six months before the end it wasn’t actually recycling, and was instead storing virtually all the waste soft plastic, nor that for years before that it wasn’t recycling nearly as much soft plastics as it was collecting, instead storing it in warehouses around the country.
Of the three soft plastic recyclers that REDcycle was using for its collected soft plastic, which had reached 7,500 tonnes a year, the biggest, Close the Loop, suffered a fire that knocked its 2,500 tonnes a year recycling line out of action for six months prior to the REDcycle collapse, with smaller recyclers Replas and Plastic Forests pulling out of the scheme prior to its collapse.
Five months after it folded, it has been reported that REDcycle plastic storage sites continue to be discovered by authorities, with at least a dozen new warehouses full of the soft plastic collected by REDcycle reportedly found in WA, Queensland and Tasmania over the past month. Some 44 different sites have been located so far. REDcycle was collecting some 150 million items from almost 2000 supermarkets each month before it collapsed.
The Soft Plastic Taskforce, comprising supermarkets Coles, Woolies and Aldi, has now taken responsibility for the stored plastic, which is currently estimated to total around 12,000 tonnes. The Taskforce is thought to be asking for an exemption to the ban on sending it overseas. In NSW at least the EPA has given the Taskforce a grace period of a year to deal with it. However, it is feared much of the 11,000 tonnes could end up in landfill.
The Taskforce is aiming to start a new pilot scheme for post-consumer soft plastics recycling by the end of this year, with the aim of resuming post-consumer soft plastics collection and recycling by 2024 or 2025.
