Australia’s 2025 Packaging Shake-Up: What Eco Suppliers Must Know

2025 Is Here — and Australia’s Voluntary Packaging Targets Have Failed

When Australia’s 2025 National Packaging Targets were launched by the Australian Packaging Covenant Organisation (APCO) in 2018, they aimed to inspire a voluntary shift toward sustainability. The goals were ambitious:

• 100% of packaging to be reusable, recyclable, or compostable
• 70% of plastic packaging to be recycled or composted
• 50% average recycled content
• Phase-out of problematic single-use plastics

But by early 2025, it became clear that these targets were not going to be met.

According to APCO’s own reporting:

• Just 84% of packaging met the basic reusability/recyclability/compostability criteria
• Plastic recycling rates stagnated around 20%, far below the 70% goal
• Only 40% average recycled content was achieved
• Phase-out progress remained inconsistent across states and industries

This failure prompted federal intervention. In late 2024, the Department of Climate Change, Energy, the Environment and Water (DCCEEW) launched a public consultation to overhaul Australia’s packaging regulations. The response was clear: 65% of stakeholders supported a mandatory, federally managed Extended Producer Responsibility (EPR) scheme.

National vs Local: A Fragmented Landscape

A. A National Framework — Still Voluntary, But No Longer Optional

The release of APCO’s 2030 Strategic Plan in August 2024 signaled a turning point. The plan isn’t just about aspirations—it introduces real mechanisms to drive packaging reform, starting with eco-modulated fees that will reward sustainable design and penalize non-recyclable or excessive packaging.

Key features of the 2030 plan include:

• A new membership fee model based on packaging impact
• Incentives for reusable, compostable, or recyclable designs
• A 1 million tonne landfill reduction target by 2030
• Greater investment in recycling and composting infrastructure
• Alignment with a national EPR scheme, now gaining legislative momentum

For brands, this means decisions made today will affect tomorrow’s costs. Businesses sticking with hard-to-recycle or plastic-heavy formats may soon pay higher compliance fees. On the flip side, transitioning to certifiable compostable packaging—especially those compatible with local composting systems—offers a proactive path to meet regulatory expectations while supporting circularity.

Tip for Exporters and Foodservice Brands:
Choosing compostable packaging aligned with Australia’s evolving recovery infrastructure isn’t just a sustainability win—it’s becoming a business necessity. For businesses, this shift signals stricter expectations around packaging design, recyclability, and end-of-life responsibility—meaning higher compliance thresholds moving forward.

B. State-by-State Regulations: A Patchwork of Bans and Exemptions

While APCO’s 2025 and 2030 targets aim to create a unified national vision, implementation across Australia remains inconsistent. Each state and territory has taken its own path—some moving aggressively to ban problematic materials, others taking a more cautious or delayed approach.

This patchwork has made compliance especially challenging for businesses operating nationally or supplying across regions.

Below is a simplified overview of state-level single-use plastic bans and compostable packaging readiness as of mid-2025:

Policy Context & Compostables: Deeper View from the Australian Marine Conservation Society (AMCS)

Source: Australian Marine Conservation Society (2024), Plastic Scorecard Q3

As you can see, Western Australia and South Australia are among the most advanced in phasing out single-use plastics, while NSW and QLD are still aligning with national reform discussions.

For brands exporting to or operating across multiple Australian states, staying informed is crucial. What’s legal in one state may be banned in another.

This inconsistency also affects compostable packaging adoption. While most states allow compostables as alternatives, local infrastructure gaps—especially for home and industrial composting—mean that not all “compostable” products are actually composted.

That’s why clear labeling, verified certifications (e.g. EN13432, AS4736), and local end-of-life compatibility are essential considerations—not just for compliance, but for customer trust.

What It Means for Your Packaging Materials

As Australia moves toward tighter regulation and extended producer responsibility, the material choices behind your packaging will matter more than ever—both environmentally and financially.

With eco-modulated fees on the horizon and compostability claims under growing scrutiny, selecting the right material isn’t just about reducing impact—it’s about ensuring your packaging can pass regulatory checks, align with available composting infrastructure, and satisfy increasingly eco-aware customers.

Let’s break down the most common packaging materials and see how they stack up under current and future expectations in Australia:

🔹 Bagasse Molded Fiber

Uncoated bagasse packaging—made from sugarcane waste—is both recyclable and compostable, offering dual-path compliance with upcoming standards. It breaks down naturally without added chemicals, making it a low-risk, high-performance option for brands aiming to stay ahead of regulation.

🔹 PLA or CPLA Lined Packaging
Though marketed as compostable, these bio-plastic linings typically require industrial composting infrastructure to break down properly. Many local councils do not accept them in curbside green bins. This mismatch between label and reality may result in contamination issues or fines, especially as enforcement tightens.

🔹 Coated Paperboard and Mixed Materials
Paper-based packaging lined with plastic or other barriers often cannot be recycled or composted due to material separation challenges. They fall into a regulatory gray area—too complex for consumers to sort and too problematic for processors to handle efficiently.

What Businesses Should Do Today

Whether you’re a foodservice operator, produce supplier, or packaging manufacturer, one thing is clear: compliance is no longer optional, and waiting could cost you—financially and reputationally. Here’s how different sectors can prepare now for what’s coming:

🔹 Foodservice Operators

• Switch to molded bagasse clamshells, fiber trays, and compostable cutlery that contain no plastic linings or PFAS.
• Avoid PLA-lined items unless you operate in regions with confirmed industrial composting access.
• Label clearly and train your staff to guide consumers on proper disposal—especially as on-pack instructions will be under increasing scrutiny.

🔹 Fresh Produce Suppliers

• With plastic barrier bags and polystyrene trays being phased out, it’s time to transition to certified compostable punnets and fiber trays.
• Retailers are already shifting preference toward home compostable or unlined fiber options, particularly for pre-packed fruits and vegetables.
• Make sure your packaging aligns with expected reforms by mid-2026, or risk disruption in your retail partnerships.

🔹 Packaging Suppliers & Brands

• Start preparing for eco-modulated EPR fees—coming as early as 2027.
• Offer full documentation of your packaging’s recyclability or compostability (such as AS 4736, EN 13432).
• Highlight how your product design supports reuse, composting, or high-quality recycling to help clients meet evolving standards.

No matter your sector:

• Audit your local waste infrastructure—FOGO, green bin, or home compost? Design for what exists, not what you wish existed.
• Avoid greenwashing—Avoid greenwashing—be transparent about your packaging’s end-of-life options and only make compostable or recyclable claims where they can be supported by local infrastructure or third-party test reports.
• Engage now—internal training, clearer messaging, and pilot recovery programs can earn your brand both regulatory goodwill and consumer trust.

How InNature Pack Can Help

At InNature Pack, we understand that compliance is just one part of the picture. You need packaging solutions that perform across materials, supply chains, and public perception. Here’s how we support our clients:

• Material Compatibility
  We manufacture 100% plant-fiber packaging—free from PFAS, coatings, and additives. Our molded bagasse products are accepted in industrial composting facilities and suitable for dual-stream recycling when required.
• Customised Solutions
  From foodservice and produce packaging to protective inserts for e-commerce, we offer custom sizing, logo printing, and product development to suit your exact needs.
• Transparent, Responsible Communication
  We assist with regulatory-compliant labelling, provide localized composting guidance, and help you craft accurate environmental claims—ensuring your marketing stays credible.
• Pre-Regulatory Support
  Need to estimate your future EPR fees? Want to run compostability tests or send packaging samples to downstream stakeholders? We’re here to make it easier.

Conclusion: Don’t Wait for Fines—Act Now

By now, the message is clear: Australia’s packaging regulations are tightening—and voluntary goals are evolving into enforceable mandates. This isn’t just an environmental shift; it’s a business imperative.

Brands that choose packaging compatible with local laws and recovery systems aren’t just ticking a compliance box—they’re building long-term resilience, cutting future costs, and enhancing consumer trust.

At InNature Pack, we’re here to help you get ready—not react. Let’s talk about how you can turn compliance into competitive advantage.

FAQ

Q1: Is compostable packaging accepted in all parts of Australia?
Not always. Acceptance depends on local composting infrastructure. Home compostable materials have higher flexibility.

Q2: Are PLA-lined containers allowed?
In many areas, PLA is not accepted in organics bins. Avoid using lined products unless you’re sure your customers have access to industrial composting.

Q3: What’s the safest material to use right now?
Uncoated molded bagasse packaging—strong, natural, compostable without synthetic layers.

Q4: What should I do if I sell in multiple states with different rules?
Choose packaging that meets the strictest standard (e.g. home compostable, plastic-free), or consult a supplier who can guide you by region.