Australia’s Path to Stronger Packaging Regulations

The global packaging landscape is rapidly shifting as regulations tighten and consumer demand for better end-of-life outcomes grows.

Europe is leading the charge with innovative policies focused on waste reduction and recyclability. In Asia, advancements in recycling technologies and policy enforcement, particularly in Japan and South Korea, demonstrate the potential for systemic change. In the United States, progressive states like California are showing the power of localised action in a fragmented regulatory environment.

In comparison, Australia has been slower to act. However, momentum is now building. The question is: can Australia bridge the gap, learn from global leaders, and carve out its own path towards a more Circular Economy focused on fit-for-purpose, sustainable packaging?

Why Progress Matters

Terms like Extended Producer Responsibility (EPR), eco-modulation, and Scope 3 emissions are no longer just buzzwords – they are now critical realities shaping how businesses operate. Failing to embrace these changes risks more than regulatory penalties; it could threaten a brand's relevance in a market that increasingly values sustainability. 

What was once seen as a mere compliance requirement, packaging regulation, is now emerging as a key competitive differentiator for businesses willing to adapt. For forward-thinking companies, these shifts present significant opportunities:

• Meet customer expectations: Consumers are increasingly demanding sustainable solutions, driving loyalty and preference for responsible brands.
• Enhance brand reputation: Aligning with sustainable practices positions businesses as leaders in corporate responsibility.
• Future-proof operations: Staying ahead of global regulations avoids penalties and costly last-minute changes.
• Reduce costs long-term: Efficient material use and improved recyclability can lead to operational savings over time.

Let's face it, if these challenges are not addressed, non-compliance will increase the cost of goods in a global market already strained by high inflation and cost of living pressures. Regulators must balance economic considerations with the existential risk to the planet – no easy task!

Global Leaders in Sustainable Infrastructure

Europe: The Pioneers

Europe sets the global' gold standard' in sustainable systems through proactive regulation and innovation. Policies like EPR and eco-modulated fees incentivise sustainable design:

•      In the Netherlands, Belgium, and France, lower fees reward high recycling rates supported by robust infrastructure.

•      EPR schemes work, latest estimates put annual fees paid by producers to industry and non-industry owned packaging EPR schemes at between 4-5 billion Euros annually. The EU's packaging recycling rate has improved from around 25-30% in the early 1990s to 70% by 2021, with some countries achieving over 80%; the fees over this duration (some 35 years) have supported the required infrastructure to deliver these improvements.

•      The UK's EPR program, launching in 2025, is projected to generate £1 billion annually to fund recycling systems and is only the start.

Europe's leadership shows how regulatory frameworks can drive both waste reduction and sustainable practices, serving as a model for other regions.

Asia: Advancing with Technology and Policy Enforcement

Countries like Japan and South Korea exemplify the power of combining technology with stringent policies:

• Japan: Known for its meticulous waste-sorting systems and advanced recycling technologies, Japan has achieved recycling rates that rival Europe. In 2021, Japan reported an official plastic recycling rate of 87%, including energy recovery methods such as thermal recycling¹. Policies like the Containers and Packaging Recycling Law have created a robust framework where producers are responsible for recycling their packaging, encouraging sustainable design and circularity practices.
• South Korea: With strict regulations on single-use plastics and an aggressive push toward resource circulation, South Korea is heavily investing in recycling infrastructure. Recent initiatives include the development of waste treatment platforms focused on plastic recycling and waste-to-energy solutions. EPR systems also drive material recovery, further reducing environmental impact.

United States: Progress Through Localised Action

Like Australia, the United States faces challenges with a fragmented approach to packaging regulations, lacking the centralised frameworks seen in Europe. However, state-level initiatives are demonstrating the potential for impactful change, which is particularly significant coming from this global economic leader. Despite potential headwinds under a Republican-led Trump government, the overall direction appears to be on track.

•      EPR Momentum Across States

Since 2021, five states – California, Colorado, Maine, Minnesota, and Oregon – have enacted EPR legislation. These programs hold producers accountable for managing packaging waste and incentivise sustainable practices.

•      Advances in Compostable Packaging Regulations

California continues to lead the way with innovative policies like the Plastic Pollution Prevention and Packaging Producer Responsibility Act – Senate Bill 54 (SB54), designed to eliminate plastic waste and drive a circular economy. Recent updates to SB54 include:

• Streamlined Standards: Compostable products now need only comply with Assembly Bill 1201 (AB1201) statutory requirements to be labelled as compostable, removing previous restrictions based on composter acceptance rates.
• Expanded Collection Programs: AB1201-compliant compostable products will be included in local collection programs, strengthening the integration of compostable packaging into waste management systems.

What is AB1201?

AB1201 ensures truthful environmental labelling by:

• Regulating claims about recyclability and compostability
• Mandating compliance with international compostability standards
• Requiring compostable products to be free of harmful chemicals like PFAS

AB1201 aligns with the work being done by the Australian Competition and Consumer Commission (ACCC), which has increased its focus on greenwashing claims and holding large corporations accountable – another critical shift in the regulatory landscape. Although the regulations are not yet finalised, CalRecycle's shift to support compostable products also represents a significant policy advancement. This approach could serve as a blueprint for other states, balancing innovation with enforceable standards.

Click HERE for more information about AB1201.

Australia: Bridging the Gap in Packaging Regulations

Current Landscape

Australia's packaging regulatory framework, similar to that of the U.S., remains fragmented and heavily dependent on voluntary commitments. The Australian Packaging Covenant Organisation (APCO) has set ambitious National Packaging Targets for 2025, including 100% of packaging to be reusable, recyclable, or compostable and 70% of plastic packaging to be recycled or composted. However, as these targets are voluntary, progress has been inconsistent across industries. 

In August 2024, APCO unveiled its 2030 Strategic Plan, which aims to strengthen this approach by introducing economic incentives, driving regulation, and improving recovery, recycling and circularity.

Australia's foundational programs include:

• Container Deposit Schemes (CDS): All states and territories have introduced or are in the process of implementing CDS programs that offer financial incentives for consumers to recycle. South Australia, a leader in this area, has achieved container recycling rates of up to 80%.
• Sustainable Packaging Guidelines (SPGs): Developed by APCO, these guidelines assist businesses in reducing the environmental impact of packaging throughout its lifecycle. They are aligned with APCO's Sustainable Packaging Principles and aim to support the achievement of the 2025 National Packaging Targets.

Learning from Global Leaders

Australia has a wealth of global examples to draw from as it works to advance its packaging sustainability efforts:

• ‍Europe has set the benchmark with robust regulatory frameworks that incentivise sustainable design and drive accountability. ‍
• Asia offers valuable insights into leveraging advanced recycling technologies and enforcing stringent policies to achieve high recycling rates.‍
• The United States, through state-level initiatives, demonstrate how localised efforts can effectively address regional challenges while fostering broader systemic change.

Examples like these underscore the importance of balancing tailored solutions with cohesive national goals. By adapting proven strategies from global leaders, Australia can accelerate its transition to best practices, unlocking both economic and environmental benefits.

Another common thread globally is the growing emphasis on data. For example, businesses in the United States and Australia are being pushed to improve material tracking, enhance data collection, and ensure supply chain transparency. Early adopters who align with these evolving regulations stand to gain a competitive advantage, leveraging data to drive informed decisions and achieve better outcomes.

As global standards take hold, companies operating across borders must navigate compliance with regulations beyond their immediate jurisdictions. This creates a "domino effect," where the pressure to meet international standards accelerates change at the pace of global compliance requirements. To remain competitive, companies must embrace these shifts proactively while continuing to advocate for robust policies that drive both economic and environmental benefits.

Transforming Australia's Packaging Landscape: Key Opportunities and Measures

Australia is embracing the opportunity to transform its approach; it has the ambition to lead:

• Integrate voluntary targets into regulation: Establish mandatory frameworks that ensure consistency across industries and drive accountability.
• Foster partnerships: Collaboration between government, businesses, and consumers is essential to build infrastructure and enforce standards. Australia needs to bridge financial gaps in downstream recycling infrastructure. Finding an effective balance between the public and private sectors will be key to improving circularity.
• Tailor global lessons locally: Adapt proven strategies from Europe, Asia, and the U.S. to fast-track progress while addressing unique local challenges.

Key Measures in Progress

• EPR: Current EPR regulations in Australia operate under a co-regulatory framework, with businesses either voluntarily joining APCO or reporting directly to state authorities. By 2025, payment obligations will commence, and a national EPR scheme could further enforce producer responsibility through eco-modulated fees.
• Eco-Modulation: By 2027, APCO will introduce eco-modulation fee structures, requiring businesses with annual turnovers exceeding $5 million to pay fees based on the recyclability and environmental impact of their packaging. This framework will incentivise sustainable design and align Australia with successful European models.
• Mandatory Reporting: Although not yet implemented, there is growing momentum for businesses to disclose their packaging impact and recyclability rates. Such transparency would drive accountability and measurable progress across industries.
• Infrastructure Investments: Australia is strengthening its recycling systems, particularly for managing soft plastics and complex materials, following challenges such as the collapse of REDcycle.

The era of incremental change is over. Australia now stands at a crossroads where decisive action can transform its packaging landscape. With eco-modulation and EPR frameworks on the horizon, there's a unique opportunity to align with global best practices, driving long-term sustainability, economic growth, and competitiveness.

At Phantm, we’re driven by a simple but powerful mission: to eliminate fugitive materials from the global ecosystem and help build a cleaner, more regenerative circular economy.

We know meaningful change isn’t always easy, and it comes with costs – that’s why we’re committed to helping our customers unlock value and find solutions thatwork for both their business and the planet. Together, we can turn challenges into opportunities and create lasting change.

¹ Source: Japan 2 Earth

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