On January 16, 2026, the Australian Productivity Commission published an inquiry report on the country’s circular economy, which was presented to Parliament on January 23. The report highlights that progress in Australia’s circular economy has slowed over the past decade, with persistent issues such as high costs, fragmented regulations, and limited data availability. The Commission has called on the Australian Government to simplify and align regulatory frameworks, enhance corporate accountability through product stewardship programs, and encourage innovation to boost resource productivity. It identifies five priority sectors where improvement is essential: building, food, agriculture and organics, mining, electronics, and textiles and clothing.
The following provides a summary of the key findings.
Current State of the Circular Economy
The report notes that although Australia has seen modest improvements in raw material productivity, circularity, and waste recovery over the past ten years, the pace of progress remains slow. Circular economy policies are still relatively underdeveloped. Historically, government initiatives focused mainly on recycling, but recent policy directions have begun shifting attention toward earlier stages of the product lifecycle.
Key Recommendations for the Government
To strengthen resource productivity in ways that support both economic growth and environmental protection, the government is encouraged to focus on three main areas:
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Simplifying and harmonizing regulations to support the adoption of innovative technologies and business practices while safeguarding human health and the environment.
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Expanding product stewardship responsibilities for companies supplying products that generate high-risk or high-value waste, including small electronics and small-scale solar photovoltaic systems.
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Supporting circular innovation through programs that promote coordination, collaboration, and capacity development across industries.
The report also highlights five priority sectors based on their economic and environmental significance and relevance to Australia. The following outlines key aspects of the electronics and textiles and clothing sectors.
Electronics
Australia’s electronic waste recovery rate is currently about 50%, and around 80% of collected e-waste is processed through low-efficiency recycling systems. This presents significant potential to recover valuable materials, decrease dependence on virgin resources, and reduce risks linked to improper disposal, such as lithium-ion battery fires.
To address these challenges, the report recommends that the Australian Government:
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Establish national product stewardship schemes covering small electronics, solar PV systems, and electric vehicle batteries.
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Coordinate with state and territory authorities to ensure consistency and avoid fragmented regulatory approaches that could increase costs for industry.
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Strengthen existing schemes through complementary measures such as improved product labeling, reuse and repair targets, expanded Right to Repair initiatives, and consumer awareness programs.
Textiles and Clothing
Australia ranks among the highest globally in textile consumption and waste generation. On average, households and businesses use approximately 39 kg of textile products per person each year, which is about 2.5 times the global average. Around 33 kg per person is discarded annually, highlighting substantial opportunities to improve resource efficiency and reduce waste. Although some companies are supporting voluntary product stewardship initiatives, participation remains low and funding constraints limit their impact.
In response, the report proposes that the Australian Government:
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Introduce stronger oversight and transparency measures to increase accountability among textile companies for waste reduction and resource productivity.
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Work with industry stakeholders to improve public reporting and monitoring systems to track progress against performance targets.
