The Circular Economy (Waste Reduction and Recycling) (Waste to Energy Scheme) Regulations 2023 have established a cap of 2 million tonnes of permitted waste that can be processed by thermal waste to energy facilities each year.
The regulations also outline:
- licence application fees
- matters Recycling Victoria must consider when deciding whether to invite a person to submit a full cap licence application.
View the Circular Economy (Waste Reduction and Recycling) (Waste to Energy Scheme) Regulations 2023 on the Victorian Legislation website.
What is the cap?
The cap is the maximum total amount of permitted waste that can be processed in Victoria each year by thermal waste to energy facilities.
A cap licence allows a waste to energy facility operator to process permitted waste up to a specified maximum amount at their facility. A cap licence will be required by anyone that intends to:
- build and operate a new thermal waste to energy facility in Victoria to process permitted waste
- existing operator licence holders who wish to increase the licensed amount of permitted waste they are allowed to process.
The cap is designed to prevent over reliance on waste to energy as a solution to waste management and to ensure that Victoria continues to prioritise:
- decreasing waste generation
- increasing investment in recycling and resource recovery.
The cap is now set at 2 million tonnes. The Victorian Government Economic Growth Statement released on 10 December 2024 makes a commitment to further increase the cap limit to 2.5 million tonnes, subject to a regulatory impact statement being completed in early 2025.
If the cap limit is increased during the current cap licensing round, Recycling Victoria may issue and allocate cap licences up to the increased cap limit.
Once the volume cap is reached, no further licences can be issued.
If capacity later 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 process to allocate the available volume.
Calling for expressions of interest
Expressions of interest (EOI) are invited from applicants wishing to apply for a waste to energy cap licence.
EOIs are open to new operators as well as existing operators who wish to increase the volume of permitted waste processed by their facility.
Applicants who are successful at the EOI stage 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.
In assessing an expression of interest for a cap licence, Recycling Victoria will consider the following:
- The proposed waste that the applicant intends to process.
- The proposed technology will be used by the facility.
- Any advice or information provided by EPA Victoria regarding environmental or compliance risks.
- Details of any other approved or pending applications or licences under the Environment Protection Act 2017 or the Planning and Environment Act 1987.
- The applicant’s planned, completed or ongoing engagement with the local community and Traditional Owners.
Recycling Victoria will run an equitable application process to issue cap licences and will ensure that all prospective applicants are well-informed about the process and what is required of them.
If you are interested in applying for a cap licence, email the Waste to Energy Team in Recycling Victoria to receive an application pack.
Cap licence timelines
EOI open – 17 December 2024
EOI close – 17 February 2025 (late applications may be accepted on reasonable grounds)
Full applications open – successful applicants from the EOI stage will be invited to submit a full application.
Waste to Energy Scheme: Guidance on the scope of the Scheme
The Waste to Energy Scheme: Guidance on the scope of the Scheme provides guidance for proposed waste to energy facilities, including:
- whether your proposed facility needs a waste to energy licence to operate
- what you need to do if your proposed facility is within scope of the Scheme
View or download the Waste to Energy Scheme: Guidance on the Scope of the Scheme document
Scope overview
The Waste to Energy Scheme regulates thermal waste to energy facilities. The purpose of the scheme is to ensure only specific amounts and types of waste are used in thermal waste the energy processes.
Whether a facility falls within the scope of the Scheme is determined by all of the following:
- The type of technology/process it will use.
- The type of waste it will process.
- The outputs from the process.
Determining whether your proposed facility is in or out of scope
The table below outlines whether a proposed waste to energy facility is in or out of scope of the Scheme. More detailed information and guidance is contained in the Guidance on the scope of the Scheme. Please read the Waste to Energy Scheme: Guidance on the scope of the Scheme to ensure you understand whether your proposed facility requires a Waste to Energy Licence.
| Technology / process | Input | Output | In or out of scope? | Waste to Energy licence required? |
|---|---|---|---|---|
| Thermal waste to energy processes as defined in section 74M(1) of the CE Act | ||||
| A thermal process such as gasification, pyrolysis or incineration | Permitted waste only | Heat (converted to steam or electricity) or fuel | In scope | Yes |
| *Exempt waste only | Heat (converted to steam or electricity) or fuel | In scope | No | |
| Permitted and exempt waste | Heat (converted to steam or electricity) or fuel | In scope | Yes | |
| Banned waste only | Heat (converted to steam or electricity) or fuel | In scope | Banned - must not operate | |
*Where a process is outside of the scope of the Scheme, other regulatory approvals may still be required, such as an EPA development licence or planning permit for the construction and operation of a waste processing facility.
The following non thermal processes are not in scope of the Scheme and do not require a Waste to Energy licence.
| Technology / process | Input | Output |
|---|---|---|
| A process that treats waste biomass through a pyrolysis process or gasification process to sequester carbon | Waste biomass, as defined in regulation 4 of the Regulations | Sequestered carbon such as biochar that is applied to land |
| Advanced recycling process that changes the chemical structure of a material or substance through cracking, gasification, pyrolysis or depolymerisation | A material or substance | Monomer or chemicals intended for production of polymer materials, other than fuel |
| Biological waste to energy process that uses microbial action to recover energy from waste, such as anaerobic digestion and fermentation. | All types of waste | Any energy, such as biogas or fuel products |
| Landfill gas collection and combustion | Landfill gas | With or without energy recovery |
| Incineration of waste without energy recovery | All types of waste | No energy recovery |
| A process that recovers energy from a material other than waste | Materials other than waste, such as coal | Energy |
| A thermal waste to energy process for which a pilot project licence has been issued under the Environment Protection Act 2017 and is in force | - | - |
What if it is unclear whether I am in or out of scope of the scheme?
Recycling Victoria can help you work out if a proposed facility is in or out of scope of the Scheme. Recycling Victoria may require further evidence or documentation to confirm whether your facility is in or out of scope. For more detailed information please read the Guidance on the Scope of the Scheme.
Recycling Victoria can be contacted at wastetoenergy.licence@deeca.vic.gov.au.
Further information
- Circular Economy (Waste Reduction and Recycling) Act 2021
- Circular Economy (Waste Reduction and Recycling) (Waste to Energy Scheme) Regulations 2023
- Waste to energy: A framework for sustainable and appropriate investment
- New recycling laws and governance
- A08 (Waste to energy) licences - Environment Protection Authority permissioning decisions register
Find out more
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