The below is an analysis of the main material streams from decommissioned infrastructure. There are other smaller categories of waste, such as non-ferrous metals, fabrics, and batteries, which will also need appropriate management.
Steel
Australian scrap steel has a high recycling rate of close to 90%. Of the total Australian scrap steel recycled:
- about 51% is used as feedstock in Australian steel mills for steel manufacturing
- 49% is exported for recycling overseas (KPMG 2023).
There are limits to how much recycled scrap steel Australian mills can accept at present. Australia’s scrap steel processing and smelting capacity is in south-eastern Australia with no current smelting capacity in Western Australia (KPMG 2023). Scrap metal is generally processed close to its collection point given the costs of transport (CSIRO 2024a). This raises challenges around the overall economic viability of domestically recycling decommissioned scrap steel from other regions, especially Western Australia (KPMG 2023).
Investment and technological improvements can address these limitations, and there are signs that this is occurring. The Australian steel industry has prioritised use of recycled scrap steel as an enabler of its decarbonisation pathway (KPMG 2023). Steel from decommissioned oil and gas projects could provide a supply for new green steel projects, opening up more opportunities for the onshore components of decommissioning to occur in Australia.
The competitiveness of onshore processing will likely depend on multiple factors such as transport costs and market demand. Export remains an important avenue for processing scrap steel. It is sometimes the most financial pathway for recycling Australian scrap steel. Export markets see Australian scrap steel as high quality, and generally offer higher prices than domestic markets (KPMG 2023).
A mix of both domestic recycling and export is likely to be necessary for processing decommissioned scrap steel. Measures that improve domestic processing capacity, if developed in close proximity to decommissioning, can reduce the amount of scrap steel being exported (CSIRO 2024a). Given the lower emissions intensity of recycling scrap steel, increasing domestic processing can support the transition to net zero and the growth of a green metals industry in Australia.
Concrete
There are well established markets in Australia for recycled concrete, with more than 80% of concrete recycled and innovative concrete recycling solutions coming to market (KPMG 2023). The capacity of the domestic construction and demolition waste recycling market is significant and estimated at 10,500 kilotons per year (KPMG 2023). It is therefore enough to accommodate the expected volumes of concrete from the offshore decommissioning industry, noting that costs may still be a factor (KPMG 2023). There are also concrete recycling facilities within a reasonable distance of most expected decommissioning ports. Port adjacent recycling and use of concrete aggregate will reduce emissions. Transport costs should not pose a significant barrier to recycling concrete from oil and gas projects (KPMG 2023). Areas of higher population see cheaper concrete recycling due to the higher demand for aggregate (KPMG 2023). The presence of extra materials such as reinforcing steel and fibres, as well as long-term exposure to seawater, may impact how much of the concrete from decommissioned materials is recyclable.
Plastics
There are many different plastics used in offshore infrastructure. High density polyethylene (HDPE) is one of the predominant types, with common uses in construction, pipes, and fittings.
In July 2021, Australia banned the export of unprocessed mixed polymer scrap plastics. Plastics processed into clean pellets or flakes can be exported. In 2020–21, Australia exported 35% of its recycled plastic. Domestic demand for recycled HDPE is expected to increase by 54% between 2021 and 2040 (Blue Environment 2022). HDPE is one of the most exported plastics in Australia because of high global prices (KPMG 2023).
In 2020–21, 17.9% of scrap HDPE was recycled (Blue Environment 2022). Exporting HDPE is likely the most economic pathway for recycling Australian scrap HDPE because of global prices. However, domestically recycling HDPE is best from an emissions perspective (KPMG 2023). Given the low proportion of plastics in decommissioned material there is an opportunity for industry to absorb this in existing capacity (KPMG 2023). As industry takes on advanced recycling techniques this will increase efficiency and provide cost reductions, enabling greater onshore uptake by Australian industry (KPMG 2023).
Before it can be recycled, scrap plastic from decommissioned infrastructure needs to be broken into smaller pieces and separated from other material. Given the proximity of some hazardous materials to plastic materials in offshore infrastructure, processing scrap plastic for recycling will also need to manage contamination risks (KPMG 2023). Some plastics may need decontamination before recycling.
The current sorting and cutting processes for scrap plastics at the port can be inefficient and risk contamination by hazardous waste (KPMG 2023).
Most polymer reprocessing facilities are in New South Wales and Victoria, with smaller sectors in Queensland, Western Australia, and South Australia. Materials recovered from the north-west may therefore see higher transport costs and emissions if plastics from decommissioning are processed domestically (CSIRO 2024a).
Hazardous waste
Disposal or storage are the dominant approaches for managing hazardous wastes. Hazardous wastes need to be handled appropriately and according to hazardous waste management regulations to ensure worker, community, and environmental safety. Ports receiving such material will need appropriate infrastructure to handle, clean, and manage such waste (KPMG 2023).
The export of hazardous wastes is regulated under both international and domestic law. In Australia, onshore hazardous waste management falls under the jurisdiction of state and territory governments. This increases regulatory complexity where hazardous waste from decommissioned material needs to travel across state borders. There are regulatory and legislative arrangements set up by each state and territory and at the federal level for managing hazardous wastes.
Contamination of other decommissioned materials such as plastics with hazardous waste increases the likelihood of material ending up in intractable waste facilities. Without decontamination, there is little to no option for future reuse or recycling (KPMG 2023).
Waste classification and management directives are the jurisdiction of state and territory governments. Stakeholders have noted that the complexity of the waste management regulatory ecosystem is challenging. Particularly noted were challenges associated with the transboundary movement of NORMs, mercury, and other contaminated waste (CSIRO 2024a).