The construction sector often points to its high resource recovery rates. On paper, it outperforms every other waste stream in Australia with over 80% of materials recovered.

However, most of the heavy lifting in these figures comes from aggregates such as concrete, brick, and asphalt. Recovery is measured in tonnes, which skews the picture. More lightweight materials such as packaging barely register in the data even though they are visible, persistent and often problematic on construction sites.

Packaging materials like plastics, cardboard and timber pallets move through every project in large volumes. Much of it is either not designed for recovery, poorly separated or lacks viable end markets. While the sector performs well on bulk materials, it is not capturing the full picture of circularity. Packaging—particularly plastic packaging—sits squarely in that gap.

The built environment already knows how to deal with problems like this. NABERS Energy, and more recently NABERS Waste, have shown how measurement changes behaviour. Green Star has done the same at the design stage, embedding best practice for performance and sustainable materials. Those frameworks are effective because they are consistent, measurable and supported by demand. Packaging has not yet been treated in the same way.

The issue extends beyond the built environment: Australia’s packaging system is still largely linear. Materials are placed on the market, used briefly and then too often wasted. In plastics alone—the most persistent and problematic of these materials—around 1.3 million tonnes of packaging is placed on the market each year. Of this, more than 1 million tonnes ends up in landfill or litter.

Where recovery systems are weak or demand is absent, materials fail to achieve circularity. In plastics, the core issue is a lack of demand for Australian recycled material. Australia has invested in recycling infrastructure. However, demand for the products it produces has not kept pace. Domestically recycled plastics struggle to compete with cheaper imports, leaving facilities underutilised and investment uncertain.

The Australian Government has committed to packaging reform, including a mandatory framework that makes producers responsible for the packaging they place on the market. This is well overdue and the continued delay is undermining investment in national recycling capability. Without clear national settings, the gap between the supply of recycled materials and demand continues to widen.

Recycling is not a waste management service. Rather, it is a remanufacturing supply chain. The current system does not properly value recycled materials – a market flaw that results in poor recovery. Fixing the market for plastic packaging alone could divert 370,000 tonnes of waste annually, slash emissions and inject billions into the economy.

This matters directly to the built environment. Construction is a major user of packaged materials and bears the impact when the system fails, from the added cost of handling and disposal to site logistics and growing sustainability reporting requirements.

The good news is that the construction sector has real agency in this space. While the broader market waits for packaging reform to fix systemic issues, procurement decisions are already shaping outcomes. What gets specified, accepted on site and required of suppliers all determine whether recycled materials have a viable end market.

Even without mandatory packaging regulation in place, there are well-established uses for recycled content across building products, infrastructure and landscaping. There is no shortage of applications, including bedding sand made from crushed glass, recycled plastics used in pipes and drainage and high-performance panel boards manufactured from recycled timber and composite packaging. The opportunity now is to scale their use. By driving demand for these Australian recycled materials, the built environment provides the market certainty that packaging reform must bolster.

Reform must be coordinated nationally with clear accountability across the supply chain. Get that right and the system improves. Get it wrong and costs increase without fixing the problem. Packaging is part of the materials system which the built environment depends on. If circularity is the goal, it cannot be left out.

The Australian Government must now deliver on its commitment to reform, ensuring this goes beyond design rules to actively foster demand. Simultaneously, the built environment can use its procurement power to pull domestically recycled materials into the core of the supply chain. The sector has already shown it can respond when frameworks are clear and incentives are aligned. With the right settings, it can provide the commercial scale necessary to make circularity work in practice.

Suzanne Toumbourou is CEO of Australian Recycling Council

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