Australia is taking steps to reduce the environmental impact of packaging, thanks to the work of the Australian Packaging Covenant Organisation (APCO).

This not-for-profit group is driving a circular economy for packaging, aiming to keep materials out of landfill and maximise the value of resources, energy, and labour within the local economy.

How APCO works

APCO was established as part of Australia’s product stewardship system, which shares responsibility for packaging waste between businesses and government. The organisation helps companies design packaging that is easier to recycle and less harmful to the environment.

APCO manages the Australian Packaging Covenant, a national framework under the National Environment Protection (Used Packaging Materials) Measure 2011 (NEPM).

The Covenant sets out how governments and businesses work together to manage packaging’s environmental impacts. It combines voluntary industry action with regulatory oversight to ensure accountability and results.

The Covenant covers Consumer Packaging, meaning any packaging used to contain, protect, market, or handle consumer products. This includes:

• Primary packaging: the container directly holding the product.
• Secondary packaging: materials that contain single or multiple primary packed products.
• Tertiary packaging: materials used for distribution, such as pallets, shrink wrap, cartons, and strapping.

Businesses with an annual turnover of $5m or more that meet the definition of Brand Owner under the NEPM must either sign up to the Covenant or comply with state and territory laws implementing it.

Brand Owner Members who become Signatories take on shared responsibilities to help achieve sustainable packaging outcomes.

Strategy and regulation

APCO’s strategy runs to 2030, focusing on improving packaging design and recovery. A key initiative is the eco-modulated fee system, expected by 2026–27.

Companies will pay fees based on how recyclable their packaging is, with harder-to-recycle materials attracting higher charges. Funds raised will support better recycling and waste collection systems.

Australian governments are reviewing the country’s packaging rules. The existing co-regulatory system, in place since 1999, is being updated to reflect modern environmental challenges.

Until new laws are in place, APCO continues to guide businesses and oversee compliance with the Covenant.

Supporting the packaging industry

APCO provides practical guidance to help companies use recycled materials, reduce waste, and improve recyclability. Its Quickstart Guides cover plastics, glass, paper, and fibre-based packaging, helping businesses meet national targets.

The Covenant promotes resource recovery by encouraging changes in packaging design, use, and procurement, so materials can be returned to the economy rather than discarded.

It also seeks to prevent packaging waste from entering the environment by supporting new innovations and alternatives.

APCO conducts annual audits to check compliance. Businesses that fail to participate may be referred to government regulators, ensuring that all companies share responsibility for reducing packaging waste.

By bringing together government and industry, APCO is shaping Australia’s move towards a circular packaging economy, influencing how packaging is designed, used, and recovered.

APCO’s work offers a model for other countries aiming to reduce waste and retain value in local supply chains.