Waste to Energy Scheme licences

What is a cap licence?

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 is required by anyone that intends to:

• build and operate a new thermal waste to energy facility in Victoria to process permitted waste
• increase the licensed amount of permitted waste they are allowed to process.

The cap is the maximum total amount of permitted waste that can be processed in Victoria each year by thermal waste to energy facilities. The cap has been set at 2.5 million tonnes per financial year.

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.

If capacity later becomes available (for instance by the cancellation 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.

Cap licences issued

Recycling Victoria has concluded the application process for thermal waste to energy cap licences. The Head, Recycling Victoria has determined and issued 7 licences totalling 2,350,000 tonnes per annum to the following waste to energy facility operators, subject to conditions that each licence holder must meet.

Any operator not listed above has not received a cap licence from Recycling Victoria. Under the CE Act, a person must not operate a thermal waste to energy facility to process permitted waste in Victoria without a cap licence or an existing operator licence.

Proposed location of facilities

Many of the projects that have received a cap licence are at a feasibility stage.

The cap licences generally do not specify a precise location for the proposed facility. The proposed location is considered and confirmed through EPA and planning approvals processes.

Other regulations and approvals

A cap licence is one of several regulatory approvals that must be held before a thermal waste to energy facility can be developed. Anyone who wants to develop and operate a thermal waste to energy facility in Victoria must obtain all required regulatory approvals before they can commence construction and operation.

Find out more about regulation of thermal waste to energy facilities

Cap licence application process

Recycling Victoria undertook a robust, fair and transparent decision-making process that included expressions of interest followed by full applications.

When determining whether to issue a cap licence, the Head, Recycling Victoria considered all mandatory criteria under the CE Act including the following:

• If the application related to a specified critical waste infrastructure project, the desirability of that project meeting the critical need set out in the Regulations.
• The extent to which the facility would contribute to an efficient waste infrastructure system, including in relation to the facility's proximity to:
  • sources of suitable feedstock
  • offtake destinations for energy and other output products.
• The commercial viability of the facility.
• Any information provided to the Head, Recycling Victoria regarding whether the applicant has obtained environmental, planning, safety and other permits or licences associated with operating or developing the facility.
• Any economic benefits associated with the facility, including employment opportunities created by the construction and operation of the facility.
• The energy outputs and offtakes of the facility and how the outputs and offtakes contribute to efficient energy fuels or products.
• Any other relevant information provided in the applicant's expression of interest or in the full stage application for a cap licence.
• Whether the applicant is a fit and proper person to operate a thermal waste to energy facility.
• Climate change as required under the Climate Action Act 2017.
• Other matters as considered appropriate by the Head, Recycling Victoria.

Existing operator licences

Under the CE Act, existing operators were eligible for a thermal waste to energy licence from Recycling Victoria if they had a licence or permit granted under either the:

• Environment Protection Act 2017
• Planning and Environment Act 1987.

That licence or permit must:

• allow for the processing of permitted waste using a thermal waste-to-energy process
• have been in force immediately before 1 November 2021.

Applications for existing operator licences closed on 4 December 2023.

The Head, Recycling Victoria has issued the following licences, subject to conditions on each licence holder.

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