The federal government has launched its first Environmentally Sustainable Procurement Policy, which it says will generate strong local demand for recycled goods, cut waste and drive Australia’s transition to a circular economy.
Beginning on 1st July, any business bidding for government construction services projects above $7.5 million must meet agreed sustainability outcomes.
This means the policy will apply to two percent of government construction services contracts in its first year, but will capture 50 per cent of the value of these contracts.
According to last week’s statement from Tanya Plibersek, minister for the environment and water, the agreed outcomes could include cutting or repurposing waste and replacing single-use materials with recycled materials.
On 1st July 2025, the policy will extend to tenders for textiles, ICT goods, furniture, fittings and equipment above $1 million.
The Department of Climate Change, Energy, the Environment and Water (DCCEEW) says these categories were chosen for their “high impacts on nature and their immense potential in providing work for Australia’s domestic recycling industry.”
About 60 per cent of Australian Government suppliers already collect sustainability data for their products but, for the first time, the policy will establish a measurement and reporting framework to track environmental outcomes.
Coinciding with Plibersek’s statement, the Circular Economy Ministerial Advisory Group released its interim report, recommending ways in which the government can boost domestic manufacturing capabilities through reuse, repair and recycling, including:
- A Productivity Commission Inquiry to investigate how resource efficiency supports economic growth
- Developing a National Circular Economy Framework and a power to set specific circularity standards for products and materials
- Introducing a national ‘recycled content first’ policy to drive recycled content markets
- Setting up sector-based circular economy targets and embed circular economy principles in key climate policies
Plibersek said the new report shows the opportunities for Australia, including a boost to domestic manufacturing capabilities.
“This will deliver a future remade in Australia, creating opportunities and demand for goods to be recycled and remanufactured right here. It’s a win for business, and a win for the environment,” she said.
“Our national procurement policy will cut waste to landfill, help boost recycling and reduce emissions – all while supporting good, local jobs.
“Just as many Australians look for recycled content or environmentally friendly products at the supermarket, the Australian Government will use our purchasing power to back cleaner, smarter, more environmentally sustainable businesses.”
Professor John Thwaites, chair, Circular Economy Ministerial Advisory Group said the interim report encapsulates the initial advice to the Australian Government on opportunities to drive Australia’s transition to a circular economy.
“The report shows how essential circular economy actions are for reducing waste, pollution and carbon emissions. Our recommendations will incentivise innovation and shape new markets for circular economy products,” he said.
The news follows Anthony Albanese’s announcement of the Future Made in Australia Act at the Queensland Media Club, which aims to revitalise manufacturing in Australia with clean energy and Australian resources.
