Following the announcement that major supermarket retailers in Australia will form part of a Soft Plastics Taskforce to explore solutions to address the immediate effects of REDcycle suspending its return-to-store soft plastics recovery program, REDcycle has issued a statement welcoming the approach.
“REDcycle would like to thank community and our industry partners for their support and patience as we work to find solutions. Today the ACCC has announced conditional authorisation for the formation of a Soft Plastic task force consisting of the major supermarket retailers, APCO, and industry partners to help address the impacts of the REDcycle Program pause and explore solutions. This multi-stakeholder approach is welcomed by REDcycle,” it said.
REDcycle reiterated that the current crisis which resulted in the suspension of its return-to-store soft plastics recycling program is due to a major imbalance in the domestic soft plastic pipeline that has been building over the past few years.
“The decrease in downstream processing capacity, coupled with the significant and sustained increase in customer return volumes has placed immense pressure on REDcycle’s operating model. This has resulted in the program’s pause on collections and the unwanted but necessary step of holding material in storage until capacity becomes available,” it added.
As REDcycle partners with Australian manufacturers of recycled products to keep the soft plastic in Australia, it said storing some material is part of normal supply chain processes.
However, when offtake partners are unable to fulfill commitments to REDcycle to receive material due to market downturn, or other reasons, REDcycle said it is left storing material for a longer than anticipated time frame until partners can resume their offtake commitments, or other processing opportunities emerge.
“REDcycle has been heavily involved in both areas; the development and cultivation of new end markets, and supporting emerging downstream processing technologies,” it said.
“As a message to our loyal REDcycle community, in hindsight, we should have shared our challenges with you along the way and we apologise for this. Your great efforts to divert your soft plastics from landfill have not been in vain. With the support of our industry, retail, and government partners, this material will continue its journey to become a resource, not to be wasted.
“We have come up short in the face of rapid growth in supply and insufficient end market demand. We need community, retail, industry, and government to come together and take the whole of value chain approach that is critically needed.”