Australia delays new national packaging scheme

The Australian Federal Government has confirmed that it will not introduce a new Commonwealth packaging scheme during its current term, marking a significant setback for industry groups calling for mandatory national packaging reform.

The Department of Climate Change, Energy, the Environment and Water informed consultation participants that the government is instead considering shorter-term reforms that balance environmental objectives with wider economic and cost-of-living pressures.

National regulation postponed until after next election

The decision means that any new packaging scheme requiring Commonwealth legislation or regulation will not be introduced before the next federal election.

The government will continue working with state and territory authorities to identify improvements that could be implemented through existing regulatory frameworks, although no comprehensive national system is currently planned during this term.

Industry challenges cost-of-living argument

The government’s economic rationale has been challenged by recycling and waste management specialists. MRA Consulting managing director Mike Ritchie argues that packaging reform could generate savings through more efficient kerbside collection, higher recycling rates, reduced landfill use, improved labelling and lower litter-management costs.

Modelling by APCO and MRA estimates that a properly administered packaging scheme could cost approximately 0.3 Australian cents per packaging item, equivalent to around 20 cents on an average weekly grocery shop before indirect savings are considered.

Design for recyclability framework remains under review

Although the broader packaging scheme has been postponed, the government continues to assess an updated Design for Kerbside Recyclability Grading Framework.

qDesign Enterprises was appointed in February 2026 to review the framework, conducting more than 65 interviews with packaging manufacturers, brand owners, recyclers, reprocessors and industry organisations between March and May.

Framework could guide existing packaging obligations

The revised framework has now been delivered to the department, which describes it as an evidence-based tool that could help businesses improve packaging recyclability.

It could potentially provide guidance under the existing National Environment Protection Measure for Used Packaging Materials and the Australian Packaging Covenant, although the government has not yet decided how or whether the framework will be formally applied.

Pressure builds ahead of environment ministers meeting

The announcement comes shortly before Australia’s Environment Ministers Meeting in September, where packaging regulation is expected to return to the agenda.

Industry groups, recyclers and environmental organisations continue to call for a national regulatory pathway incorporating mandatory packaging design requirements and extended producer responsibility.

Reform process dates back several years

Australian environment ministers agreed in 2022 that packaging regulation should be reformed to ensure products were designed for recovery, reuse and recycling. Public consultation on broader reform options subsequently closed in late 2024.

The latest decision therefore extends a regulatory process that has already been underway for several years, creating additional uncertainty for companies preparing investments in packaging redesign and domestic recycling infrastructure.

Recycling sector warns of investment uncertainty

The delay comes at a challenging time for Australia’s recycling sector, where processors are facing pressure from low-cost virgin polymers, imported recycled materials and uncertain demand for domestically produced recyclates.

Without mandatory recycled-content requirements or stronger producer responsibility measures, industry representatives warn that investment in local recycling infrastructure could become more difficult to justify.

States may now play a larger role in packaging policy

With a new Commonwealth scheme effectively postponed, state and territory governments may become increasingly important in determining the short-term direction of Australian packaging regulation.

For packaging producers and brand owners, the absence of a unified national framework means continued uncertainty around design requirements, recycling obligations and future EPR costs, even as pressure for more circular packaging continues to increase.