Revival of plastic packaging levy could be a turning point for industry

Proposed federal plans to introduce a levy on plastic packaging and mandate minimum recycled content could mark a turning point for Australia’s packaging industry, as policymakers respond to global oil volatility and growing pressure to reduce reliance on imported materials.

The renewed discussions signal a shift towards more interventionist policy after earlier reform efforts stalled in 2023. An update from Environment Minister Murray Watt is expected ahead of the federal Budget, with industry bracing for measures designed to fund recycling infrastructure and stimulate demand for recycled materials.

According to Jet Technologies’ general manager Daniel Malki, the policy momentum reflects changes already underway across the sector, where regulatory pressure, rising input costs and supply chain disruption have been converging for several years.

“What we’re seeing now is policy catching up with where the industry was already heading,” Malki said. “Regulatory change, cost pressures and supply chain disruption have been converging for some time. This just accelerates the need for action.”

With only around 20% of plastic packaging currently recycled in Australia, compared to approximately 65% for materials like glass and cardboard, the scale of the challenge remains significant. At the same time, industry estimates suggest only around half of the country’s recycling capacity is currently being utilised, pointing to deeper structural inefficiencies across the system.

“Australia doesn’t have a recycling problem, it has a utilisation problem,” Malki said. “We’ve seen investment in recycling infrastructure, but without strong end-market demand and the capability to use those materials effectively, the system can’t function as intended.”

The proposed levy, designed to fund recycling infrastructure and incentivise more sustainable packaging design, could play a key role in addressing this imbalance. Industry estimates suggest reforms could unlock an additional 370,000 tonnes of recycled plastic, or roughly a quarter of all plastic packaging in Australia.

“Creating demand for recycled materials is critical,” Malki said. “It’s not just about collecting waste, it’s about ensuring those materials can be consistently and commercially used in high-performance packaging.”

Across high-volume consumer goods sectors, businesses are already navigating a complex packaging equation, balancing rising input costs with growing expectations for sustainability. While recyclable flexible packaging formats are becoming more technically viable, they can come at a higher upfront cost, and recovery infrastructure remains uneven.

“Many businesses want to move faster, but they’re operating in a high-cost environment where sustainability expectations don’t always align with commercial realities,” Malki said. “At the same time, advancements in material technology mean recyclable formats can now deliver the performance required at scale, so for many applications, the challenge is shifting from feasibility to implementation.”

Jet Technologies works with packaging converters and manufacturers to support the transition to more sustainable packaging structures, helping balance performance, cost and compliance requirements.

“Early adopters are already demonstrating what’s possible, integrating recycled content and transitioning to more sustainable structures in commercial environments,” Malki said. “That momentum is critical in helping normalise new materials and accelerate broader industry uptake.”

The renewed policy focus also reinforces the importance of building stronger domestic capability, particularly as global supply chains remain volatile.

Looking ahead, Jet Technologies expects demand for advanced materials, flexible production technologies and more adaptable packaging formats to continue growing as brands respond to regulatory and market shifts.

“The companies that succeed will be those that prepare early,” Malki said. “This is a pivotal moment for the industry to move from ambition to action and build a packaging system that is fit for the future.”

Daniel Malki, General Manager at Jet Technologies.

Top image credit: iStock.com/Kesu01