Waste to energy is an important part of the Victorian Government's 10-year circular economy policy.
Waste to energy involves turning waste material into useful energy resources such as heat, electricity, gas, and liquid fuels. After waste avoidance, reuse, and recycling, waste to energy is the final opportunity to get value from material that would otherwise go to landfill.
Victoria’s Waste to Energy Scheme, administered by Recycling Victoria, regulates market-related aspects of thermal waste to energy processing. It ensures that licensed facilities only accept approved amounts and specific types of residual wastes.
The Waste to Energy Scheme implements the Victorian Waste to Energy Framework. It is designed to support the circular economy by ensuring that the most effective material recovery and recycling outcomes are prioritised, as well as extending the life of Victoria’s landfill sites.
The Circular Economy (Waste Reduction and Recycling) Act 2021 ( CE Act) provides for the Head, Recycling Victoria to:
- issue licences
- regulate thermal waste to energy facilities.
The Circular Economy (Waste Reduction and Recycling) (Waste to Energy Scheme) Regulations 2023 detail how the waste to energy scheme is regulated.
Facilities licensed under the scheme will be allowed to process permitted waste. Permitted waste is:
- municipal solid waste (MSW) - residual waste (other than municipal food and garden organics, and municipal recycling material) that has undergone source separation
- commercial and industrial waste that is not technically, environmentally, or economically practicable to further reuse or recycle.
The CE Act provides for 2 kinds of licences:
- existing operator licence
- cap licence.
Existing operator licences
Under the CE Act, existing operators were eligible for a waste to energy licence from Recycling Victoria if they had a licence or permit granted under either the:
That licence or permit must:
- allow for the processing of permitted waste using a thermal waste-to-energy process
- have been in force immediately before 1 November 2021.
Applications for existing operator licences closed on 4 December 2023.
The Head, Recycling Victoria has issued the following licences, subject to conditions on each licence holder.
| Licence holder | Issue date of licence | Location | Licence status |
| Paper Australia Pty Ltd | 8 December 2023 | Maryvale, 3840 | Active |
| Visy Industries Australia Pty Ltd | 18 January 2024 | Coolaroo, 3048 | Active |
| Great Southern Waste Technologies Pty Ltd | 7 March 2024 | Dandenong South, 3175 | Active |
Cap licences
The Victorian Government committed to place a cap of one million tonnes each year on the amount of permitted waste that can be heat treated in new waste to energy facilities to make energy.
Future regulations will:
- establish a volume cap for new thermal waste to energy facilities
- allow operators of new thermal waste to energy facilities to apply to Recycling Victoria for cap licence
- outline the process and requirements to make an application for a cap licence.
The Head, Recycling Victoria will call for an expression of interest (EOI) for cap licences.
EOIs for cap licences will be open to new operators as well as existing operators who wish to increase the volume of permitted waste processed by their facility.
Successful EOIs will be invited to apply for a cap licence. The Head, Recycling Victoria will then decide whether to issue a licence for a particular allocation of the cap to their thermal waste to energy facility.
Once the volume cap is reached, no further licences can be issued.
If capacity becomes available (for instance by the closure of a project or removal of a licence from an operator), the Head, Recycling Victoria may choose to run another EOI process to allocate the available volume.
Expressions of interest for cap licences are not yet open.
Consultation on proposed cap licence regulations
The Department of Energy, Environment and Climate Action conducted public consultation on the proposed cap licence regulations between December 2023 and February 2024.
For information on the public consultation and feedback received as part of public consultation, visit the public consultation page on Engage Victoria or email the Climate Action and Circular Economy Division at wastetoenergy@delwp.vic.gov.au.
Once the cap licence regulations commence, the Head, Recycling Victoria will be able to invite expressions of interest to apply for a cap licence.
Further information
Updated