The soft plastics recycling program used by Coles and Woolworths has entered liquidation. Liquidation is when a business sells off its assets to pay off outstanding debts before it closes down. The REDcycle recycling program was declared insolvent (unable to pay its debts) in the NSW Supreme Court yesterday, due to a failure to pay the storage fees for the soft plastics that had been stockpiled.
First, the context
REDcycle coordinated a recycling program for soft plastics – including plastic bags and bubble wrap – that couldn’t be recycled through normal recycling bins. These plastics were processed at special facilities and then used to create recycled products, including outdoor furniture and shopping trolleys. Since beginning over a decade ago, REDcycle says they have saved over 5.4 billion pieces of soft plastic from landfill.
In November, REDcycle abruptly paused its operations due to difficulties carrying out the program. This was due to record high levels of soft plastics being collected for processing amid lowered capacity, partly due to a fire at a facility used by REDcycle. The suspension of REDcycle meant that soft plastics were being forced to landfill. A taskforce was established in the weeks after by representatives from Coles, Woolworths, and ALDI to address the “urgent need” for a soft plastics recycling program in Australia.
Has anyone stepped in?
Coles and Woolworths have offered to take control of the soft plastics sitting in storage. That offer was accepted by REDcycle this week. Coles and Woolworths don’t expect the Court’s orders will affect their plans, saying the agreement provides “greater certainty” that REDcycle’s soft plastics will be “responsibly managed for the best possible environmental outcome”. They will begin work to address the current stockpile this week, which will include inspecting the REDcycle material that’s been left in storage.