A person must not operate a thermal waste to energy facility to process permitted waste in Victoria without a cap licence or an existing operator licence.
What is a cap licence?
A cap licence allows a waste to energy facility operator to process permitted waste up to a specified maximum amount at their facility. A cap licence is required by anyone that intends to:
- build and operate a new thermal waste to energy facility in Victoria to process permitted waste
- increase the licensed amount of permitted waste they are allowed to process.
The cap is the maximum total amount of permitted waste that can be processed in Victoria each year by thermal waste to energy facilities. The cap has been set at 2.5 million tonnes per financial year.
The cap is designed to prevent over reliance on waste to energy as a solution to waste management and to ensure that Victoria continues to prioritise:
- decreasing waste generation
- increasing investment in recycling and resource recovery.
If capacity later becomes available (for instance by the cancellation of a project or removal of a licence from an operator), we may choose to run another process to allocate the available volume.
Cap licences issued
In 2025, Recycling Victoria concluded an application process under the CE Act for thermal waste to energy cap licences. Seven licences totalling 2,350,000 tonnes per annum were issued to the following waste to energy facility operators, subject to conditions that each licence holder must meet.
| Licence holder | Date of issue | Cap amount |
|---|---|---|
| Cleanaway Operations Pty Ltd | 17 August 2025 | 760,000 |
| HiQ EFW Victoria Pty Ltd | 17 August 2025 | 750,000 |
| Knox Transfer Station Pty Ltd (location to be confirmed) | 17 August 2025 | 15,000 |
| Liquid Power Co Pty Ltd | 17 August 2025 | 50,000 |
| Melbourne Water Corporation | 17 August 2025 | 450,000 |
| Recovered Energy Laverton Pty Ltd | 17 August 2025 | 280,000 |
| Zerogen Holdings Pty Ltd | 17 August 2025 | 45,000 |
| TOTAL | 2,350,000 |
Proposed location of facilities
Many of the projects that have received a cap licence are at a feasibility stage.
The cap licences generally do not specify a precise location for the proposed facility. The proposed location is considered and confirmed through planning approvals processes.
Cap licence application process
The decision-making process for cap licences includes expressions of interest followed by full applications.
When determining whether to issue a cap licence, we consider all mandatory criteria under the CE Act including the following:
- If the application relates to a specified critical waste infrastructure project, the desirability of that project meeting the critical need set out in the Regulations.
- The extent to which the facility will contribute to an efficient waste infrastructure system, including in relation to the facility's proximity to:
- sources of suitable feedstock
- offtake destinations for energy and other output products.
- The commercial viability of the facility.
- Any information provided to us about whether the applicant has obtained environmental, planning, safety and other permits or licences associated with operating or developing the facility.
- Any economic benefits associated with the facility, including employment opportunities created by the construction and operation of the facility.
- The energy outputs and offtakes of the facility and how the outputs and offtakes contribute to efficient energy fuels or products.
- Any other relevant information provided in the applicant's expression of interest or in the full stage application for a cap licence.
- Whether the applicant is a fit and proper person to operate a thermal waste to energy facility.
- Climate change as required under the Climate Action Act 2017.
Existing operator licences
Existing operators were eligible for a thermal waste to energy licence under the CE Act if they had a licence or permit granted under either the:
That licence or permit must have:
- allowed for the processing of permitted waste using a thermal waste-to-energy process
- been in force immediately before 1 November 2021.
Applications for existing operator licences closed on 4 December 2023.
Under the CE Act, the following existing operator licences were issued, subject to conditions on each licence holder.
| Licence holder | Date of issue | Location |
| Paper Australia Pty Ltd | 8 December 2023 | Maryvale, 3840 |
| Visy Industries Australia Pty Ltd | 18 January 2024 | Coolaroo, 3048 |
| Great Southern Waste Technologies Pty Ltd | 7 March 2024 | Dandenong South, 3175 |
| Recovered Energy Laverton Pty Ltd | 19 April 2024 | Laverton North, 3026 |
Further information
Updated