On behalf of Mr Jihad Dib: I move:

That this bill be now read a second time.

The Government is pleased to introduce the Protection of the Environment Legislation Amendment (FOGO Recycling) Bill 2024. The bill proposes amendments to the Protection of the Environment Operations Act 1997 to mandate the source-separated collection of food and garden organics waste [FOGO] from households and food waste from businesses. The bill also mandates the reporting of food donations by large supermarkets. This bill is essential to ensuring that New South Wales, and Greater Sydney in particular, is able to reduce the amount of material going to landfill. These measures are urgent, and the time to act is now. We recognise that in order to solve significant waste management challenges for the people of New South Wales, significant reform is needed. This bill is one aspect of much-needed reform.

We recognise that while this bill is essential, it also represents a fundamental change to the way businesses and councils operate. We are introducing this legislation now to give councils and businesses time to prepare. The source-separated collection of FOGO has been discussed for many years, and this Government is committed to implementing it. By legislating the FOGO mandates, we provide certainty to local government and the waste sector that they should invest in new infrastructure in New South Wales. There are also important environmental benefits of this bill. Through the NSW Waste and Sustainable Materials Strategy 2041, key targets have been set to halve the volume of organics going to landfill by 2030 and to achieve net zero emissions from this waste stream.

Minimising the amount of organic waste going to landfill provides a huge opportunity to reduce environmental harm and protect the health of our communities. This is because every tonne of organic waste that we can divert from landfill avoids 1.5 tonnes of carbon dioxide emissions entering our air. At the current rate of waste generation, Greater Sydney is projected to run out of landfill capacity by 2030 or earlier. If we do not act, this shortfall will likely exacerbate the cost-of-living pressures on the average household as the cost of disposing waste rises. If Greater Sydney runs out of landfill space, the cost households pay for domestic waste management services is expected to increase substantially. Households are already under significant cost-of-living pressures, and these are basic services that are essential for protecting public health and the environment.

This Government is determined to reduce residual waste entering landfill. Each year in New South Wales, households and businesses generate around 1.7 million tonnes of FOGO waste, most of which is collected in red‑lid rubbish bins and landfilled. This is despite the great potential for FOGO waste to be recovered for beneficial use as compost for industries like agriculture. On average, food waste makes up more than one-third of the material in New South Wales household red bins. In landfill, organic waste decomposes to emit methane, a greenhouse gas which is more potent than carbon dioxide. Landfilling organic waste also attracts the waste levy, which increases costs for households and businesses to dispose of a material that is otherwise recoverable. An analysis of the proposed household mandates found that their application to all households in New South Wales may result in the diversion of almost 950,000 tonnes of FOGO waste each year from landfill.

We have also heard from councils through our consultation process. The bill includes exemption powers, and we recognise that some areas may need more time. We recognise the significant challenges councils currently face, and we want to work with and support them in implementing FOGO. Along with increasing the recycling of organic material, which this bill will achieve, we are committed to ensuring there is support for councils to achieve a clean waste stream. We need to make sure that the food and garden waste we collect is not contaminated by people throwing away food and beverage packaging with their FOGO waste. There is significant education work needed to reduce contamination and promote a clean waste stream. Collecting food and garden organic waste separately takes effort, and we do not want that effort undermined by inadvertent contamination that impacts the product.

The bill takes a balanced approach to regulation by gradually implementing the mandates, with businesses starting from 1 July 2026 in stages based on the bin volume, and households starting from 2030. This recognises the different capacities to adapt. The NSW Environment Protection Authority has consulted on the proposals with local government, other government agencies and the waste industry, and it led a formal public consultation process from July to October 2024. I thank everyone who provided feedback on these important reforms. I also acknowledge the work of the previous Government, which conducted extensive investigations into the viability and delivery of FOGO collection. Now is the time to address the significant waste challenges we face, and this Government is committed to solving the waste crisis.

I now turn to the detail of the bill and will first speak to the business mandates. New section 170F outlines that businesses and institutions deemed to be relevant premises under new section 170B are required to provide sufficient food waste bins for the collection of food waste onsite. Businesses will be required to ensure that food waste bins are collected weekly and that food waste is not mixed with other waste during transportation. The maximum penalty for not complying with the business mandates is $500,000, with an additional $50,000 penalty each day for continuing offences. On-the-spot fines of up to $5,000 can also be issued, with higher fines for second offences. The penalties reflect the importance of compliance and ensure that the fine cannot be treated as just a cost of doing business. New clause 79 in schedule 5 to the Act outlines that the mandates will be phased in based on the weekly residual waste bin capacity of a relevant premises. The first stage for businesses will commence food collection on 1 July 2026, followed by 1 July 2028, with the final stage on 1 July 2030. These businesses are likely to include supermarkets, large hospitality venues and some retailers.

I now speak to the household mandates. The bill includes amendments to require local councils to separately collect and transport food and garden organics waste from households from 1 July 2030 for all residential dwellings. Wherever possible, the bill has sought to use standard definitions from the Standard Instrument–Principal Local Environmental Plan. For the purposes of the chapter, a household under new section 170A includes a place of residence that is provided with a residual waste service. This definition ensures that councils are not unduly burdened with providing a food waste collection service where they do not already provide one. For example, this may be in particularly remote or inaccessible areas of the State.

Councils may elect to provide food organic and garden organic collection through separate bins, or FOGO collection combined in one bin, depending on the council's preference. Councils must provide an organics collection bin or bins of sufficient size to hold the average amount of food organics waste and garden organics waste generated onsite by a household of that type. Councils must collect FO or FOGO weekly and must ensure the organic waste stays separated from other non-organic waste during transportation. Where garden organics are collected in separate bins to food organics, the council is responsible for determining the frequency of collection of the garden organics. The intent of the weekly frequency of food organics collection is to ensure that households are not discouraged from using FOGO by the decomposition of material before collection.

In circumstances where a household is not provided with a collection by a local council but is provided with a collection by a person other than a local council, such as a commercial waste service provider, the business mandates in new section 170F will apply. This is to ensure that where a private waste contract has been negotiated, the building will still have an obligation to have a food organics collection service. Residential accommodation that is covered by the business mandates is not required to comply with the mandate until 1 July 2030. This is to ensure that all residential accommodation types are treated in the same way. The main exception is seniors housing providers, such as nursing homes, which use commercial waste service providers and would be covered from 1 July 2026 if the bin capacity thresholds apply. There are penalties for noncompliance with the household mandates, with councils liable for penalties of up to $500,000, with an additional $50,000 penalty each day the offence continues. On-the-spot fines of up to $5,000 can also be issued, with higher fines for second offences.

I now speak to the large supermarket donation mandates. The bill makes amendments to mandate that large supermarkets with a retail floor area of over 1,000 square metres must record their food donations monthly from 1 July 2026. New section 170F specifies the categories of food items that large supermarkets must report on. The EPA may request the food donation records of large supermarkets and may publish those records. The intent of the mandate is to encourage the donation of usable food, avoid food waste and bring greater transparency to food donations. I will now speak to exemptions. Under new section 170D, the chapter does not apply to Lord Howe Island or any part of the Western Division that is not within the area of a local council. An important aspect of the bill is new section 170J, which enlivens the ability of the EPA to grant exemptions from any of the requirements.

The Government recognises that a one-size-fits-all approach does not work. We will not be draconian—those sectors that need help to transition will get it. We also recognise that in some areas a food waste collection or a combined FOGO collection is not practical. As part of the exemption process, we will consider the threshold where the population of an area does not support FOGO viability. The intention of the exemption power is to recognise that in some areas, especially regional and remote areas, FOGO collection may not be a viable and cost‑effective option. Exemptions could also be utilised where the required FOGO processing capacity may not be able to be delivered in time to match the demand as the mandates commence. The Government recognises that in some situations councils' or businesses' access to a FOGO collection service may be limited or cost prohibitive. In these situations, exemptions may be available.

The exemption power may also be used to allow the necessary exemption of certain multi-unit dwellings, or MUDs. MUDs may have unique challenges in their infrastructure design, such as the use of bin chutes or the lack of available bin room space. They can also face contamination challenges due to some people inadvertently putting the wrong item in their FOGO bin. Because multiple people contribute to the waste stream, it only takes one household not using the bins properly to contaminate the stream, even if the majority are using it correctly. The power to grant exemptions recognises that, while some MUDs may be able to adopt FOGO collection by 1 July 2030, there will be others that need more time to get there. Ultimately, the Government wants to support businesses, councils and households to divert FOGO from landfill.

The bill contains regulation-making powers where the Minister may make a local council exempt from the chapter through regulation. The intent of the exemption powers is that the exemption may be either ongoing or temporary. An ongoing exemption may be one where a local council is deemed to be exempt from the requirement by regulation. This may be due to the remoteness or the lack of supporting infrastructure. An example of a reactive exemption may be where a person applies for an exemption from the requirement due to requiring more time to comply. The bill allows for entire local government areas to be exempt from the household mandate and to exclude localities from the business mandate.

The exemption powers are designed to be flexible, and the Government is committed to consulting further as we develop guidance around circumstances where exemptions from the mandates may be appropriate and explain how exemptions could be developed. The intent of this legislation is to achieve an outcome. There are offences contained within the legislation. However, the Government wants to work with businesses and councils to achieve the intent of the mandates. For the purposes of compliance activity, the appropriate regulatory authority, or ARA, for the business mandates will be a shared responsibility between local councils and the EPA. Broadly speaking, the EPA will oversee institutions operated by the State or a public authority, such as public schools, public hospitals, TAFEs, jails and council-run childcare centres, while councils will oversee businesses and some institutions. For the household mandates and supermarket reporting mandates, the EPA will be the ARA.

New section 170G allows for local council authorised officers appointed under the Food Act 2003 to exercise functions for the purposes of the business mandates under new section 170F without needing to be appointed under the Protection of the Environment Operations Act 1997. These measures offer greater efficiency and flexibility for local councils in how they implement checking of the business mandates. Councils that have separate compliance teams, one for food safety and hygiene and one for environment protection, could utilise the expertise of their food safety inspectors for inspection and enforcement of the business mandates. These measures are ultimately designed to increase recycling, divert FOGO waste from ending up in landfill, reduce residual waste and avoid methane emissions. If New South Wales is to avoid a landfill capacity shortage then strong action must be taken to divert waste. FOGO waste can be a valuable material and, therefore, it is in our interests to ensure that it remains in the circular economy.

The proposals in the bill have been years in the making and follow recommendations from a range of strategies and extensive consultation. The Government recognises that the sector, and specifically councils, will need support to adapt to the mandates. To help households and businesses prepare for the requirements, we commit to undertake a statewide community education program to reduce food waste, use the right bins and avoid contamination. We are also looking at ways to provide support to councils to offer practical onsite education, as well as support to help households improve their disposal practices and transition to the new organic waste collection requirements. The time for action is now, and this Government recognises the problems we are facing and has a plan to manage the waste crisis. This is an important step in that plan. I commend the bill to the House.