Announcement date
9 May 2023
Link to announcement
Budget Paper No. 2: Budget Measures
Problem being addressed
The Product Stewardship for Oil (PSO) Scheme pays incentives to industry to encourage the environmentally sustainable management and re-refining of used and recycled oil. There have been minimal changes to the PSO scheme since it was established in 2000. This has led to the PSO scheme not meeting its original policy intent, due to the increase in the volume of oil products recycled, and the stagnation of the levy collected to cover this growing cost.
There are three aspects to this issue:
1. The PSO scheme provides significant environmental benefits but is not financially sustainable;
2. There has been no adjustment to the benefits paid to oil recyclers in more than 20 years; and
3. There are significant information gaps that prevent an appropriate understanding of the level of access regional areas have to the scheme; and therefore if environmental protection objectives of the scheme are achieved in regional and remote Australia.
Proposal
To address the problem, the policy will increase scheme benefits to ensure that the PSO provides sufficient incentives to recycle waste oil and raise the levy to make the PSO Scheme financially sustainable. Additional ‘light touch’ reporting requirements for the waste oil collection industry will be implemented to deliver additional oversight to the Department of the PSO Scheme.
Assessed Impact Analysis outcome
Consistent with the Government’s Impact Analysis requirements, the Department of Climate Change, Energy, the Environment, and Water (The Department) certified the fourth independent review of the Product Stewardship (Oil) Act 2000 as meeting the requirements of an Impact Analysis.
Assessment comments
The Office of Impact Analysis (OIA) does not assess the quality of independent reviews, but does assess relevance. The OIA assessed that the options analysed in the certified report are sufficiently relevant to the Government’s proposed activities.
Regulatory burden
The Department has estimated that this decision will have annual average regulatory costs of $34.75 million across the Australian community. OIA notes that the estimated value of additional revenue (i.e. the change in the amount paid through the levy) should not be included in the regulatory costs calculation as it is outside the scope of the Australian Government’s Regulatory Burden Measurement Framework.