If you operate a waste and resource recovery facility, you may need to provide a financial assurance under the Environment Protection Act 2017.
EPA applies the prescribed risk assessment criteria set out in the Environment Protection Regulations 2021 (the Regulations) to assess whether you need a financial assurance. Your compliance history as a duty holder is covered in the criteria.
Calculating financial assurance
The amount of financial assurance you might need is based on the total waste, plus the waste types included in your permissions. All waste on your premises is accounted for in the waste storage limits in A13 permits or licences for waste and resource recovery facilities. This includes industrial and municipal waste.
To help you calculate financial assurance, read Calculation of financial assurance for landfills, reportable priority waste (RPW) management and waste and resource recovery facilities (publication 2003). This document outlines EPA’s methods for calculating financial assurance.
In addition to the calculation method published by the Authority for financial assurance, the Environment Protection Act 2017 also requires that the Authority has regard to a reasonable estimate of costs of remediation and clean-up associated with a particular activity. EPA recognises that published guidance does not perfectly suit every activity or circumstance. In implementing the financial assurance program and where a specific permissioned activity has been deemed to require a financial assurance, the Authority can and does require evidence-supported financial assurance proposals from individual permission holders where the activity materially differs from that described by guidance.
Sub-limits for different waste types are not always included in permissions. Financial assurance is then calculated using the highest unit disposal cost and total amount of waste permitted for onsite storage. An example of this is when combustible and non-combustible wastes are both handled at the site. In this case, we calculate financial assurance by using the combustible recyclable material formula for the total waste onsite. EPA applies a cost adjustment to the formula for combustible waste. This is based on EPA’s experience of cleaning up this type of waste which is more costly than non-combustible waste.
Financial assurance is calculated using the maximum weight of stockpile waste allowed in the permission. A density conversion factor is included in the financial assurance calculation guidance for where the permission limit is in volume.
EPA can accept alternative methods for calculating weight where the duty holder provides evidence.
Financial assurance is calculated on the cost of disposing of waste to landfill. This method is used to estimate the scale of clean-up that would be required.
If EPA had to step in to clean up the site, it’s likely the waste would be sent to landfill. The calculation method is therefore based on the cost of disposal to landfill. In exceptional circumstances EPA can consider an alternative assessment of the clean-up costs.
Financial assurance is calculated on the cost of disposal to Victorian landfills.
All waste sent to landfill is liable for a waste levy (previously landfill levy) unless the Minister grants an exemption. If waste is abandoned and EPA needs to clean it up, we would have to pay the waste levy.
EPA considered the feedback from industry and made changes to the financial assurance calculation for use of:
- single disposal fee for landfilling regardless of location ($200/tonne)
- flat rate for transportation cost per tonne regardless of location ($15/tonne)
EPA released a proposed method for calculating financial assurance for waste and resource recovery facilities for consultation. Following industry input we published the report Developing new financial assurance guidance for the waste and resource recovery sector: external consultation report (publication 1963).
Read more about financial assurances
Financial assurance for permissions and contaminated land management (publication 2002)
Reviewed 10 January 2022