Proposed reforms to the NSW scrap metal industry have been welcomed by the National Waste and Recycling Industry Council (NWRIC), which says a national ban on the export of unprocessed scrap metal would further improve the integrity of the sector.

A new report by NSW Police into the state’s scrap metal industry was tabled in NSW Parliament on 25 November following a review of the Scrap Metal Industry Act 2016 (the Act). It includes 19 recommendations to amend the Act and ensure greater regulation of the industry.

NWRIC CEO Rose Read said the NWRIC is calling on the NSW Government to support and act on the recommendations.

“The proposed reforms would strengthen the integrity of the sector and help shore up the future potential of the Australian scrap metal and steel industries,” Ms Read said.

“The report found that legitimate scrap metal recyclers in NSW are losing a large amount of feedstock end-of-life vehicles to questionable businesses, known as ‘car breakers’, who rapidly strip vehicles and export their parts and materials.

“Despite operating like scrap metal recyclers, car breakers avoid the prohibition on buying scrap metal using cash under section 12 of the Act by purchasing motor vehicles under the pretence of recycling them.

“The report found that illegal operators who deal in cash account for a significant loss of business for compliant scrap metal dealers. This has, in some instances, resulted in a 40% reduction in end-of-life vehicle intake volumes since the start of the Act.

“To address this issue, the report proposes extending the ban on paying cash so that it also applies to vehicle recyclers, which would capture car breakers.

“Amending the Act to clarify that scrap metal businesses without a scrap metal yard must still be registered and the appropriate details are included as registration information is another recommendation that would further strengthen the industry.”

The report also recommends the creation of a public register which identifies people in breach of the Act; increasing penalties for non-compliance to the Act; and that it becomes an offence for a scrap metal dealer to advertise the payment of cash for scrap metal.

Waste Contractors & Recyclers Association of NSW (WCRA) Executive Director, Tony Khoury, said while the WCRA welcomed the proposed reforms, the report did not go far enough in providing enforcement solutions.

“Industry is urging the NSW Government to re-engage on the matter of enforcement of the Act, so that the legislative intent becomes a reality,” Mr Khoury said.

Ms Read said the report’s recommendations add further weight to NWRIC’s call for the Federal Government to ban the export of unprocessed scrap metal.

“The Federal Government has implemented a timetable to ban the exports of waste glass, plastics, tyres and paper and cardboard by 1 July 2024, yet banning of unprocessed scrap metal is not yet on the table,” Ms Read said.

“Last week, the Federal Government launched its ‘ReMade In Australia’ campaign aimed at supporting Australians to reuse and buy products manufactured with recycled goods to reduce waste and create new jobs. While NWRIC welcomes this move, we need to see unprocessed scrap metal added to the list of waste that is no longer shipped overseas.

“An estimated 25% to 30% or 717,000 tonnes of the estimated 2.39Mt of scrap metal exported annually is non-metallic waste such as unprocessed glass, plastics, textiles, and tyres. And it is being exported to developing countries, many of which fail to have the appropriate environmental standards or employment conditions in place.

“This unprocessed Australian waste can cause harm to human health and the environment overseas and at the same time, undermine the sustainability of Australia’s scrap metal recycling industry.

“We know that around 32% of global demand for steel products can be satisfied by scrap steel sources. Further, the World Steel Association says about 630 million tonnes of scrap are recycled every year, saving nearly 950 million tonnes of emissions that would have come from the production of virgin steel.”

According to the Australian Steel Institute, steel occupies a strategically essential role in Australia’s sovereign production capabilities, particularly at a time where there is unprecedented global uncertainty in supply chains.

“It is a critical input in many areas of Australia’s society and economy, from residential and commercial construction and manufacturing, through to mining, agriculture and environmental protection. All these essential downstream and related industries rely on steel to function,” concluded Ms Read.