On April 10, 2025, the Australian Packaging Covenant Organisation (APCO) opened consultation on a proposed shift to a strengthened, industry-led Extended Producer Responsibility (EPR) model, aiming to tackle persistent economic gaps that hinder progress toward the National Packaging Targets (NPTs). Feedback can be submitted via APCO’s website or through written submissions until midnight AEST on May 16, 2025.
Introduction of EPR
Extended Producer Responsibility is a policy approach where producers (in this case, brand owners who place packaging on the market) are held financially and operationally responsible for the end-of-life management of their products. EPR shifts the cost burden from local governments and consumers to producers, incentivising more sustainable packaging design and greater investment in circular systems.
While Australia already has a legislated co-regulatory framework under the National Environment Protection (Used Packaging Materials) Measure 2011 (NEPM) and the Covenant mechanism, APCO now argues that a more robust and industry-led version is necessary to ensure long-term viability and compliance with national targets.
Proposed Two-Part Fee Structure
APCO's proposed shift involves a new member fee model beginning in FY27, comprising:
Base Fee | Covers APCO's core operating costs, calculated based on annual revenue, in line with the existing system. |
EPR Fee | A new fee based on both the type and volume of packaging a brand places on the market. |
EPR fees will be used to fund direct interventions such as:
Service payments to operators, such as collectors and reprocessors, to improve material recovery, especially for soft and rigid plastics and fibre.
Supply chain facilitation to support development of niche material schemes, business-to-business (B2B) recycling, and end-markets for recycled materials.
Consumer education campaigns to boost recycling behaviour, particularly at the household (kerbside) level.
Proposed Recommended Pathway (Scenario B)
Among several pathways assessed, APCO is recommending "Scenario B", which balances cost, feasibility, and systemic impact. The costs, benefits and assessment of this scenario is outlined in the table below.
Costs | Estimated funding costs and member contributions (Base fee and EPR fee) • Between $38.4 and $41.5 million in FY27, increasing to • Between $230.4 million and $272.8 million in FY30 |
Benefits | Estimated benefits for landfill and recovery rates • Diverts 353kt from landfill by FY30 • By increasing recovery rates on: Soft plastic (to 19% in FY30 from a base of 6%) Rigid plastic (to 36% in FY30 from a base of 28%) Fibre (to 70% in FY30 from a base of 64%) |
Impacts | Drives lasting system impact because scale is sufficient to support system investment. Strikes a balance between high growth rates in recycling and management of implementation risks such as stockpiling and slow end-market growth |
The financial model is calibrated to scale with the size and environmental impact of each brand owner’s packaging activities, with considerations such as reuse, existing recycling schemes, and annual turnover factored into fee calculations. For example, packaging that qualifies for container deposit schemes (CDS) or verified reuse loops may be excluded or discounted.
Strategic Shift Toward 2030
The new model also activates APCO's 2030 Strategic Plan, positioning the organisation to take a more proactive role in coordinating collective action across the packaging supply chain. As the administrator of the only legislated stewardship scheme for packaging in Australia, APCO sees this as both an opportunity and a responsibility to lead a sector-wide transition toward circularity.
The 2030 Strategic Plan, developed by APCO, outlines specific actions, performance targets, and funding mechanisms, such as eco-modulated fees, which adjust producer contributions based on the environmental performance of their packaging. These fees are designed to incentivise more sustainable packaging choices by rewarding recyclability, reuse, and reduced material use, while disincentivising problematic formats.
Importantly, the Plan serves a transitionary role, remaining in effect until the Department of Climate Change, Energy, the Environment and Water (DCCEEW) completes its broader regulatory reform process. This ensures policy continuity and operational stability as the industry prepares for a potentially more prescriptive regulatory environment in the future.
