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Australia's Packaging Covenant Drives Circular Economy Transition
17 Oct
Summary
- Australian Packaging Covenant Organization (APCO) spearheads packaging sustainability
- Eco-modulated fees to incentivize recyclable packaging by 2026-27
- Businesses with $5M+ turnover must comply with Covenant or state laws
As of October 2025, Australia is making significant strides in reducing the environmental impact of packaging, thanks to the efforts of the Australian Packaging Covenant Organisation (APCO). This not-for-profit group is spearheading the country's move towards a circular economy for packaging, aiming to keep materials out of landfills and maximize the value of resources, energy, and labor within the local economy.
APCO manages the Australian Packaging Covenant, a national framework that combines voluntary industry action with regulatory oversight to ensure accountability and results. By 2026-27, the Covenant will introduce an eco-modulated fee system, where companies will pay fees based on the recyclability of their packaging, with harder-to-recycle materials attracting higher charges. The funds raised will support the development of better recycling and waste collection systems.
Businesses with an annual turnover of $5 million or more that meet the definition of Brand Owner under the National Environment Protection (Used Packaging Materials) Measure 2011 (NEPM) must either sign up to the Covenant or comply with state and territory laws implementing it. APCO provides practical guidance to help these companies use recycled materials, reduce waste, and improve the recyclability of their packaging.
