The renewable energy industry currently operates within the traditional linear economy model characterised by a “take-make-dispose” approach. This approach not only contributes to waste but also undermines the sustainability principles at the heart of the energy transition.
A circular economy, by contrast, prioritises resource efficiency, reuse, and recycling, ensuring that materials such as solar panels, wind turbine blades, and lithium-ion batteries are repurposed rather than disposed of, extending their lifecycle and reducing environmental impact.
Achieving this shift, however, requires more than just industry goodwill — it demands strong policy frameworks and governance mechanisms to support innovation, investment, and infrastructure for circularity.
Recognising this, the Australian Government took a significant step in 2024 by launching Australia’s Circular Economy Framework (the ‘Framework’) with the ambitious goal of doubling circularity by 2035.
Current policies on circular economy
As of 10 February 2025, the following policies and regulations are currently in place across States and Territories to support the transition to a circular economy:
| New South Wales | Circular Economy Policy (2019) |
| Queensland | Waste Management and Resource Recovery Strategy (2019) |
| Victoria | Recycling Victoria: A New Economy (2020) |
| Western Australia | Waste Avoidance and Resource Recovery Strategy 2030 (2024) |
| South Australia | South Australia’s Waste Strategy 2020-2025 |
| Tasmania | Draft Waste Action Plan (2019) |
| Australian Capital Territory | Circular Economy Act 2023 |
| Northern Territory | Circular Economy Strategy 2022-2027 |
The national Framework sits above and consolidates the underlying objectives of the various policies and frameworks. The three key targets of the national Framework are:
- to reduce Australia’s per capita material footprint by 10%;
- lift material productivity by 30%; and
- safely recover 80% of resources by 2035.
At the national level, there are also several investment instruments that support a circular economy including the $7 billion Northern Australia Infrastructure Facility launched in July 2016 and the $15 billion National Reconstruction Fund launched in November 2023.
As it stands, despite housing 0.33% of the global population,1 Australia generates 4.5% of global emissions, of which 80% comes from fossil fuel exports.2 Australia’s circularity rate is just 4.6%, falling below the global average of 7.2%. Australia also has the highest material footprint per capita among G20 nations and generates only $1.20 USD in economic output per kilogram of materials consumed—significantly lower than the OECD average of $2.50 USD. By doubling circularity, Australia has the potential to realise a net economic benefit of $26 billion in GDP by 2035.
The framework and the renewable energy industry
By the time Australia introduced the Framework, three-quarters of G20 countries had already established national circular economy strategies. The Framework was designed to align with emerging global supply chain priorities to enhance the competitiveness of Australian exports.
CSIRO identified mining, construction, manufacturing, agriculture and resource recovery as the five key industries with the most potential to advance circularity in Australia.3 The renewable energy sector touches on all these industries and plays a key role in the transition serving as both an indicator of the transition and a driver of circularity through the recycling and repurposing of critical materials. In addition to critical minerals, there is also opportunity for Australia to export green steel and other sustainable materials.
Critical minerals
Critical minerals are essential for producing renewable energy technologies, and demand is expected to exceed supply over time. Given the parallel pursuit of net zero targets, there has been an accelerated increase in the adoption of renewable energy technologies, including in Australia. This led the government to develop and launch the Critical Minerals Strategy 2023–2030 in 2022, which also prioritises circularity and highlights the need to develop downstream processing capabilities.
The end-of-life management of renewable energy technologies (such as batteries and solar photovoltaics) must involve the recovery and reuse of valuable materials and minerals to give Australia a competitive advantage in the resources industry. This requires investment in innovation and infrastructure to develop new methods to extract valuable minerals from waste and renewable technologies.
Leveraging best practices to advance Australia’s circular economy
Given that Australia currently lags behind other advanced economies in promoting circularity, Australia has a unique opportunity to combine the traditional ecological knowledge of First Nations Peoples with the strategies of other global economies to create a more sustainable and competitive circular economy.
Consultations with First Nations People
The Australian Government should consult with First Nations communities who have long implemented knowledge systems that embody circular economy principles, such as “caring for Country, minimising waste and ensuring the natural environment thrives for future generations”. The First Nations Peoples traditional knowledge of sustainable practices offers valuable insights into a circular economy that emphasises respect for the environment, long-term planning, and holistic approaches to resource use.
European Union (EU)
The EU is a global leader in establishing a circular economy, with a circularity rate of 11.5%. One of their most successful schemes is the ‘Extended producer responsibility scheme’, which mandates all electrical goods producers in the EU to cover the costs of recycling their products. This approach incentivised producers to maximise product life cycles, in turn reducing waste and providing consumers with better quality goods.
Alongside this, the EU recognised the significant role of renewable technology in achieving circularity, and rapidly expanded the industry and actively reduced the use of fossil fuels. This shift contributed to a significant 8% reduction in greenhouse gas emissions in 2023.4
Taiwan
Similarly, Taiwan invested in comprehensive renewable energy distribution programs which included detailed maps of wind, photovoltaic and hydroelectricity energy resources which has led to substantial developments in the renewable energy sector.
In 1997, Taiwan introduced a ‘4-in-1 Recycling Program’, which required manufacturers and importers to pay fees that subsidised recycling. This initiative led to a dramatic reduction in municipal solid waste, from 1.14 kg per person per day in 1997 to just 0.4 kg in 2011.
The above case studies demonstrate the effectiveness of integrating circular economy principles with renewable energy advancements to promote sustainability, develop durable goods and reduce waste.
Moving forward
As the Framework is relatively new, it is essential that its implementation is closely monitored to assess its effectiveness and adapted as required. As policymakers are aware, businesses and industry stakeholders are more likely to comply when compliance is straightforward. Therefore, it is essential for federal and state governments to continue to harmonise policies and regulations across the renewable energy sector, and more broadly, to encourage greater participation and facilitate a more effective transition to a circular economy.
The Hamilton Locke team advises across the energy project life cycle – from project development, grid connection, financing, and construction, including the buying and selling of development and operating projects. For more information, please contact Matt Baumgurtel.
1‘Australia Population’, Worldometer (Web Page) < https://www.worldometers.info/world-population/australia-population/#:~:text=Australia%20population%20is%20equivalent%20to,(and%20dependencies)%20by%20population.>.
2‘Australia’s massive global carbon footprint set to continue with fossil fuel exports’, Climate Analytics (Web Page) <https://climateanalytics.org/press-releases/australias-massive-global-carbon-footprint-set-to-continue-with-fossil-fuel-exports#:~:text=Australia%20has%20a%20global%20carbon,from%20its%20fossil%20fuel%20exports.>.
3Australia’s Advantages in Transitioning to a Circular Economy (n 1) p iv.
4Desmond McCormack, ‘EEA Trends and Projections: EU Greenhouse Gas Emissions See Significant Drop in 2023’, European Environment Agency (Online News Article, 31 October 2024).
