MyEco Group Ltd (ASX:MCO) has secured a significant new Supply agreement with Penrith City Council, reinforcing its position within Australia’s rapidly expanding food organics and garden organics (FOGO) recycling sector. The agreement, announced on 20 May 2026, is expected to generate annual Revenue of approximately $1.36 million and could deliver total revenue of up to $6.8 million over a potential five-year term.

The contract win arrives at a strategically important period for MyEco Group as New South Wales accelerates implementation of mandatory FOGO recycling reforms ahead of the state’s 2030 waste diversion targets. Investors have increasingly focused on companies exposed to environmental infrastructure and waste management trends, particularly those benefiting from legislative tailwinds.

For MyEco Group, the Penrith contract represents not only a material commercial agreement but also an important validation of the company’s long-standing council-focused operating model.

Following the update, MCO’s share price jumped 191% to AUD 0.035 per share during morning trading hours on 20 May 2026.

Long-Term Partnership Extended Through Competitive Tender

The newly awarded agreement extends MyEco Group’s eight-year supply relationship with Penrith City Council for the distribution of compostable caddy liners used in household FOGO programs.

The contract includes an initial three-year term with two optional one-year extensions, subject to satisfactory performance and mutual agreement. If fully extended, the agreement would carry an estimated total value of $6.8 million.

According to the company, the successful tender outcome reflected its established capabilities across compliance, quality assurance, environmental standards, and supply chain management. MyEco highlighted its vertically integrated operating structure spanning resin Manufacturing through to bag production and distribution logistics.

Penrith City Council specifically noted the company’s manufacturing experience, safety systems, and operational expertise in delivering compostable bags compliant with organics recycling requirements. The council also referenced MyEco’s ability to distribute products efficiently across households, an increasingly important Factor as local governments scale FOGO programs.

Legislative Tailwinds Continue to Drive Sector Growth

The broader significance of the contract lies in the accelerating rollout of mandatory FOGO recycling programs across New South Wales. The Protection of the Environment Legislation Amendment (FOGO Recycling) Act 2025 mandates that households and certain businesses separate food and garden organics from general waste streams.

From July 2026, mandatory FOGO separation requirements begin for sectors including supermarkets, hospitality venues, universities, and hospitals. By July 2030, all NSW households using red-lid waste bins must have access to weekly FOGO collection services.

These reforms are creating a substantial long-term market opportunity for suppliers of compostable liners, collection systems, and organics recycling infrastructure. MyEco has positioned itself directly within this transition by targeting local councils implementing new waste diversion programs.

The Penrith contract demonstrates the company’s ability to convert policy-driven Demand into recurring commercial revenue. Importantly, Penrith has already been recognised as one of the more advanced councils in NSW regarding FOGO implementation, giving MyEco exposure to an established and scalable municipal recycling program.

Share Market Attention Builds Around Recurring Revenue Visibility

MyEco Group shares have increasingly attracted investor attention amid growing momentum in Australia’s sustainability and Circular Economy sectors. Smaller-cap environmental solution companies often experience heightened market sensitivity to long-duration contracts because such agreements improve revenue predictability and operational visibility.

The Penrith agreement strengthens MyEco’s recurring revenue profile while reinforcing its reputation as a preferred supplier for councils transitioning toward mandatory organics recycling systems.

Unlike shorter-term commercial packaging contracts, council supply agreements can provide more stable demand patterns and multi-year Cash Flow visibility. This characteristic may become increasingly valuable as investors assess operational resilience within emerging environmental services businesses.

The announcement also highlights MyEco’s strategic focus on council partnerships rather than purely retail or consumer packaging channels. This positioning potentially differentiates the company within a competitive sustainable packaging market that has faced pricing pressure and fragmented demand conditions in recent years.

While the company remains relatively small compared to larger waste management operators, its specialised exposure to compostable FOGO products places it within a niche segment expected to benefit directly from evolving environmental regulation.

Operational Scale and Distribution Capability Remain Key Advantages

One of the more notable elements of the Penrith tender outcome was the emphasis on MyEco Group’s integrated supply chain and distribution network. Local councils increasingly require suppliers capable not only of manufacturing compliant compostable products but also of managing large-scale residential distribution programs.

Penrith City Council currently services more than 69,000 households through kerbside FOGO collection programs, alongside almost 15,000 additional households in multi-unit developments using shared collection systems.

Managing this scale of distribution requires logistical coordination, inventory management, and customer support infrastructure. MyEco stated that its long-term strategic relationships with distribution partners contributed to the strength of its tender submission.

The company also referenced its council-resident online ordering portal as a differentiating feature. Digital service capabilities may become increasingly relevant as councils seek more efficient resident engagement and supply management systems during FOGO rollouts.

Environmental Policy Momentum Supports Industry Expansion

The Australian waste management sector is undergoing structural transformation as governments seek to reduce landfill dependency and improve organics recovery rates. FOGO programs are central to these policy objectives because organic waste represents one of the largest contributors to methane emissions in landfill environments.

Independent studies cited by MyEco indicate that compostable liner-supported FOGO systems can improve household participation rates and significantly increase organics diversion outcomes.

The company also highlighted the broader environmental implications of improved waste diversion, including reductions in carbon emissions and lower landfill costs for councils. These policy-linked benefits are likely to remain important drivers behind continued government support for FOGO infrastructure expansion.

As additional Australian states and territories consider similar mandates, MyEco may have opportunities to replicate its NSW council-focused strategy in other jurisdictions over the medium term.

Strategic Positioning Within the Circular Economy Theme

MyEco’s latest contract reinforces its positioning within broader circular economy and sustainability Investment themes that continue gaining traction globally. Investors have increasingly focused on businesses aligned with waste reduction, compostable materials, and environmental compliance solutions.

The company’s strategy appears designed around long-duration legislative shifts rather than short-term consumer trends. This distinction may provide greater commercial stability if FOGO mandates continue expanding nationally.

However, execution risks remain relevant. Scaling municipal supply agreements requires operational consistency, manufacturing reliability, and cost management discipline. The ability to maintain product quality and service standards while supporting multiple council contracts simultaneously will remain important as the Business expands.

Competitive pressures may also intensify as more packaging and environmental solution providers target the growing organics recycling market.

Conclusion

MyEco Group’s newly secured Penrith City Council agreement represents another important step in the company’s expansion within Australia’s evolving FOGO recycling sector. The contract provides meaningful recurring revenue visibility while reinforcing MyEco’s standing as an established supplier to local governments implementing organics diversion programs. Supported by favourable legislative changes in New South Wales and increasing policy emphasis on landfill reduction, the company is strategically positioned within a growing environmental infrastructure market. While operational execution and competitive dynamics remain important considerations, the latest agreement highlights MyEco’s ability to capitalise on structural waste management reforms and strengthen its council-focused commercial footprint.