Rachel asked the government about waste-to-energy caps and Victoria’s Sustainability Fund. The proposed increase of waste-to-energy caps will reduce Victoria’s waste levy revenue, leaving less in our Sustainability Fund to fund climate change and recycling initiatives.
Thursday the 4th of December, 2025
Victorian Legislative Council
Rachel Payne (South-Eastern Metropolitan):
Substantive question
Skills and TAFE. In your own department’s 2023 regulatory impact statement for Victoria’s waste-to-energy cap and cap licensing, it is noted that increased waste-to-energy capacity will reduce the government’s waste levy revenue. Their modelling projected that over 27 years, with a 2 million tonne cap on waste to energy, waste levy revenue would decrease by $2.836 billion and waste-to-energy operator revenue would increase by $7.453 billion. For the Sustainability Fund, which collects most of Victoria’s waste levy, this means less funding for recycling initiatives and programs to help deal with climate change. Now the waste-to-energy cap is at 2.5 million tonnes, can the minister advise how this will decrease waste levy revenue and increase waste-to-energy operator revenue?
Gayle Tierney (Western Victoria – Minister for Skills and TAFE, Minister for Water):
Substantive response
I thank Ms Payne for her question. It will be referred to the Minister for Environment. And again, can I thank her for her ongoing interest in waste-to-energy matters.
Rachel Payne:
Supplementary question
I thank the minister for referring that on. By way of supplementary, the Victorian Auditor-General’s Report on the Annual Financial Report of the State of Victoria: 2024–25 showed that the balance of the Sustainability Fund had ballooned from $66.8 million at 30 June 2022 to $545.7 million at 30 June 2025. Now, this fund is responsible for collecting most of Victoria’s waste levy and is meant to fund recycling initiatives and other programs to help deal with climate change. Yet increasingly, this money is not being spent.
So my question is: why is this money sitting in the Sustainability Fund instead of being used to help deal with climate change and funding recycling initiatives?
Gayle Tierney:
Supplementary response
Again, I thank Ms Payne for her supplementary. It will be referred to the Minister for Environment for a response.
Written response received, 8th of December 2025:
Waste to energy represents the final opportunity to divert waste from landfill. Without this investment, we would need to start planning to open new landfills in the near future.
Modelling by the Department of Energy, Environment and Climate Action supports a 2.5 million tonne cap as the most appropriate limit that strikes the right balance between diverting as much waste as possible from landfill, while managing the risk of over-investment in waste to energy infrastructure.
The Victorian Government is continuing to provide record investment from the Sustainability Fund and has allocated more than $1.1 billion from the fund from 2018 to 2025. This includes $538 million to deliver once-in-a-generation systemic change to the state’s waste and recycling system and implement its transformative circular economy policy.
Steve Dimopoulos MP
Member for Oakleigh
Minister for Environment
Related:
- Waste-to-Energy inquiry debate sparked – Rachel Payne
- Inquiry into Waste-to-Energy passed! – Rachel Payne
- Hampton Park waste transfer station proposal ‘a load of rubbish’ – Rachel Payne
- Waste-to-energy could cause more problems than it solves – Rachel Payne
- Waste incineration and landfill targets – Rachel Payne
