INCREASING PACKAGING RECOVERY AND RECYCLING IN GREAT BRITAIN:
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1 INCREASING PACKAGING RECOVERY AND RECYCLING IN GREAT BRITAIN: THE CASE FOR REFORM OF THE PRODUCER RESPONSIBILITY SYSTEM AND THE ROLE OF DEPOSIT RETURN SYSTEMS JULY
2 OUR PROGRESS TO DATE 50% less material in our 500ml Coca-Cola bottles than we used 20 years ago. 20 % reduction in weight of some of our plastic bottle caps since All plastic bottle caps are now recyclable. 100 % 30 % of the plastic used in our Smartwater and Honest packs is PlantBottle - a plastic made partly from plant materials, rather than fossil fuels. It performs the same as traditional PET plastic but has a much lower carbon footprint. 100 % recyclability of all bottlesincluding our new Abbey Well 'twist' pack which has been designed to use 32% less material and the shape makes it easier to recycle. of our plastic bottles - across all of our 20 brands contain 25% recycled PET and we have committed that they will use 50% recycled PET by It takes 60% less energy to produce recycled PET compared with virgin plastic Today, we use 10,000 tonnes of recycled PET plastic in our bottles every year in Great Britain we plan to double that 57% of all plastic bottles are recycled from households in Great Britain every year. We want to play our part in recovering the remaining 43%! 2
3 EVERY BOTTLE MATTERS Resource efficiency has long been at the heart of our thinking around sustainability, particularly when it comes to our packaging. We have made positive progress across our business in Great Britain in recent years, but we know there is much more to be done. Coca-Cola and the wider industry have a responsibility to minimise the materials used by our industry; to reduce waste; to improve packaging recycling rates, as well as tackling litter. Here at Coca-Cola, the vision for our business in Great Britain is simple: our packaging is a valuable resource and we want to play an active role in ensuring that all our bottles and cans are recovered after use and recycled. Yes, that s ambitious. And we would not claim to have all the answers. But through our new sustainable packaging strategy we have identified the ways in which we want to work closely with others in the coming years. Firstly, to minimise the environmental impacts of our packaging, as well as making the circular economy a reality here in Great Britain. Our strategy is based around the positive actions we must take in three critical areas: 1. We will continue to innovate to ensure our packaging is as sustainable as possible 2. We will use our brands to encourage people to recycle 3. We will champion new ways to improve the recovery of packaging If industry is serious about creating a circular economy, then the starting point is to ensure that all consumer packaging is fully recyclable and compatible with the country's recovery systems. Our first area of focus in the strategy is on making our packaging as sustainable as possible. All our cans and bottles are already fully recyclable, and we are committed to playing a positive role in identifying, testing and rolling out new low-carbon, renewable packaging options. We will also continue our work to lightweight our packs and reduce our overall packaging usage wherever possible. For instance, in Great Britain, we have reduced the amount of packaging we use by 27% in the past decade. That s been driven in part by initiatives such as our work to reduce the amount of material in our 500ml Coca-Cola bottles which at just under 20g, now weigh almost half of what they did in the mid- 1990s. However, for the circular economy to become a reality, we believe companies must also show they are serious about ensuring recovered materials are recycled. This is particularly relevant for the PET plastic used to make our bottles where there is a need to create a strong demand for recyclate if we are to boost the circularity of our bottles. That's why we have set the goal of doubling the amount of rpet used in our bottles by 2020, working with local partners to make this a reality. The second focus of our strategy recognises the consistent feedback we have received from stakeholders. We need to play a more active role in educating and inspiring consumers about the importance of recycling, as well as supporting initiatives that seek to change the behaviours that lead to littering. We have been promoting the responsible disposal of our packaging with our consumers for many years. From our research, we understand the barriers that prevent people from recycling as much as they could. It is clear people will recycle more if they understand what can (and can t) be recycled, understand how to recycle and understand the benefit of each individual action in a tangible way. We have combined this insight with proven behaviour change techniques to run campaigns at high profile events like the London 2012 Olympics and music festivals as well as wherever we do sampling of our products; with our customers and directly to households with the help of Local Authorities. We know this approach works and we will continue 3
4 to evolve and tailor it to suit different audiences. As a next step, we are launching our biggest-ever advertising campaign designed to inspire people to recycle, with the aim of reaching more than 35 million people by the end of this year. We also plan to test a new recycling message on packs; promote recycling at events and festivals and identify new partnerships with customers to engage consumers. These efforts are backed by consumers: recent research by YouGov showed a third (33%) of consumers agreed that brands like Coca-Cola should be harnessing the power and reach of their brand to inspire people to recycle more items, more often. However, the ultimate responsibility for fixing the current challenges with recycling in this country lies not with consumers but with industry and Government. If we are to close the loop on packaging, then all links in the value chain must work together to champion new ways of improving the country s recovery and recycling infrastructure. Change cannot happen in isolation. That leads us to the third focus of our strategy. We will partner with others across our value chain to deliver on our vision that all our packaging is ultimately recovered and recycled. The current situation is complex and this paper sets out our thoughts as to how industry, Governments and others could collaborate to resolve the failings and complexities in the current recovery system and move towards a more effective approach to recycling across Great Britain. In developing our new strategy, we have engaged many different stakeholders and we are keen to continue this important dialogue. We would, therefore, welcome your thoughts on our strategy and the case for reform of the current producer responsibility system set out in this document. 4
5 SUPPORTING THE CIRCULAR ECONOMY We have long believed that household collections provide a robust packaging recovery solution for Great Britain, but we acknowledge that recycling rates have stalled in many parts of the country and understand the growing societal frustration around the issue of littering. Like other forward thinking businesses, we think it s time to update the existing producer responsibility system as we look to improve the current approach. The packaging producer responsibility system in Great Britain is based upon Packaging Recycling Notes (PRNs) and it has worked well in providing a market-based, efficient and costeffective system for business. Currently, packaging producers, fillers and retailers must demonstrate that a certain amount of packaging has been recycled. Each company's obligation is calculated based on the type and amount of packaging material they use. Companies do this by purchasing PRNs. The PRNs are generated when materials are recycled by re-processors or exported for recycling. As one of largest contributors to the PRN system from the manufacturing sector in this country, we support the current principles which underpin the scheme: The scheme is mandated and regulated. This is critical to create a fair and reasonably level playing field. A voluntary approach will not deliver the funds and scale needed and may allow noncontributors to avoid their responsibilities; There is shared responsibility along the supply chain. This principle is important as it helps establish ownership, collaboration and commitment to the inputs and outputs of the scheme. It means there is a fair and equitable division of costs across the chain, encompassing all those in the waste chain Local Authorities, waste management companies and those sectors currently covered by the existing PRNs scheme; It s a reasonably simple mechanism driven by supply and demand encouraging innovation and competition to avoid escalating costs; It has clear targets, which all material types are measured against. However, there are challenges with the current system and we want to see reforms that will deliver improved recycling outcomes. Our vision is that all our packaging can and should be recovered and ultimately recycled, which is why we are calling for significant reform to the current producer responsibility scheme in Great Britain. If we are to improve recycling, we believe that the Governments of Great Britain need to work together and with industry to create a new producer responsibility system that works for everyone in the value chain. Fig 1. Growth of number of household plastic bottles collected 8bn 7bn 6bn 5bn 4bn 3bn 2bn 1bn Source: Recoup UK Household Plastics Collection Survey 2016 Fig 2. Percentage of people saying there is a very or fairly big problem in their area or rubbish or litter lying about (England) Source: ONS Crime Survey, England and Wales, Trend in anti-social behaviour
6 To do this, reform must focus on these key areas: Financially reward those who design packaging that can be easily recycled. Incentivise the use of recycled material. Support British processing and reprocessing, instead of encouraging materials to be exported for recycling. Guarantee good environmental outcomes through more transparent use of funds including support for antilittering initiatives. More stretching targets to help drive behaviours and a lower de-minimus payment qualifying level to capture more of the materials currently being used. If the household recovery system is to be fully effective, then there is also a need for the administrations in Westminster and Holyrood to accelerate their ongoing work to create consistency in collections and communications on recycling learning from the positive experiences of Wales. A reformed PRNs system could support this work particularly in providing the funds necessary to communicate effectively with consumers. A reformed producer responsibility scheme will support a circular economy by: Driving the design of packaging which is more recyclable Step-changing the use of recycled materials in new packaging Providing more funds to allow national consumer campaigns, harmonisation of collection services and investment in essential national infrastructure Aligning the efforts of national and local government, industry and householders Targets underpin the current regulations but no targets have been set for 2021 and beyond, giving us a brief window of opportunity in which we can work with other like-minded businesses to champion new ways to improve the recovery of packaging in this country. We welcome the fact that compliance body, Valpak, has launched a consultation into PRN reform and would urge all businesses to support the need for far-reaching changes to the current system. Bottle Recovery Solutions As part of the ongoing process, we remain supportive of any discussions about the potential role that could be played by deposit return systems for one-way drinks packaging. We recognise that this is not a universally popular position within industry and we would agree that the immediate opportunity to improve packaging recycling lies in reform of the current producer responsibility system in Great Britain. However, from our experience elsewhere in Europe, we know that deposit systems can work if they are developed as part of an overall strategy on the circular economy and in collaboration with all relevant industry stakeholders. That s why we are exploring well-thought-through initiatives that have the potential to reduce littering and increase recycling and would fully support the trial of a well-designed DRS to understand exactly what contribution it might make in the UK. It is clear, we need to establish a scheme that works in Great Britain where we have a unique set of circumstances, particularly with a well-established household recycling collection system. Such a system must be developed in a holistic way to work for consumers, Local Authorities and smaller businesses. Nevertheless, this does not mean that we cannot take the learnings and best practice from other countries. There are some countries in which household kerbside collections schemes, very similar to what we have here in Great Britain, operate alongside a DRS system. While we cannot cut and paste these models, they are examples of how the two systems can work together. Throughout our research to develop our strategy, we have identified one area of potential opportunity for a DRS in Great Britain. Our internal data shows that around 65% of our packaging is consumed in the home; approximately 25% is consumed in other outlets, such as offices, restaurants and cafes; while it is estimated that the remaining 10% is consumed on-the-go. In our analysis, it's clear that genuine reform of the current PRN system could result in a more effective household collection scheme as well as introducing new requirements to improve recycling for all businesses selling food and drink products. This could be complemented by a well-designed DRS system, targeting drinks products consumed on-the-go, such as small PET bottles. As such, we are committed to working with others to test a bottle recovery and reward scheme to understand its impact as a way of informing any future national approach to tackling litter and recycling. Fig 3. Estimated point of disposal for CCE packaging in GB Transport, work, cafes, on-trade 25% At home 65% On-the-go 10% Source: CCEP internal data 6
7 Ultimately, any such interventions will require regulation to work on a national level and leadership from the Governments in Westminster and the devolved administrations. That s why we want to see a national dialogue on reform of the producer responsibility system as a whole and the role of new interventions such as DRS for on-the-go consumption to support the creation of the circular economy here in Great Britain. But as we have identified elsewhere in this paper, the circular economy will only become a reality if businesses like ours commit to change at every link in the loop. That s why we are proud of our track record in supporting the reprocessing sector here in Great Britain through our five-year relationship with a PET bottle reprocessing facility in Lincolnshire, now run by Clean Tech. In that time, we have helped support the recycling of two billion PET bottles through the facility. This is where we have sourced the 25% recycled material used in all our PET bottles and our ambition is to double that to 50% by 2020 the equivalent of some 20,000 tonnes of material a year or 800million 500ml bottles, sourced from the country s biggest bottle recycling facility. We are committed to going further in the long run, but our future use of more recyclate will require the collection and recovery systems in this country to improve dramatically. We would encourage all businesses in our sector to make similar public commitments to help support the reprocessing sector in this country. We already understand from our experiences in other countries the broad principles which need to be applied when building a welldesigned DRS system. Such an intervention can only be effective if underpinned by effective regulation so the leadership of Government is critical; this isn t an option for voluntary or self-regulatory approaches. As well as making our packaging as sustainable as possible, and inspiring consumers, we are prepared to champion the need for change to the recovery systems in this country, and will work with others who share our ambition that all our bottles and cans should be recovered and none should end up as litter, whether on land or in the ocean. IN SUMMARY Our ambition is to recover all our packaging This requires reform of the current producer responsibility system All ideas including DRS should be considered Governments across the Great Britain need to show leadership to work with businesses to accelerate this debate We will work with like-minded businesses to champion the case for reform 7
8 OUR SUSTAINABLE PACKAGING STRATEGY IN GREAT BRITAIN INFOGRAPHIC WE WANT TO RECOVER ALL OF OUR PACKAGING We will continue to innovate to ensure our packaging is as sustainable as possible 1 We will use our brands to encourage people to recycle We will champion new ways to improve the recovery and recycling of packaging SO THAT MORE IS RECYCLED AND NONE ENDS UP AS LITTER We will double the recycled plastic (rpet) content in all of our bottles to 50% by 2020 and source the material in Great Britain We will launch a Coca-Cola branded communications campaign to convey the importance of recycling to 35 million consumers As part of our support for well-designed recycling systems we will trial an on-the-go bottle recovery and reward scheme Ensure any new packaging we use is 100% recyclable all our bottles and cans are 100% recyclable and have been since 2012 Innovate to help develop sustainable packaging, including renewable materials and new product delivery mechanisms that meets consumers needs and reduce waste Implement best practice guidelines in our factories and with our suppliers to minimise the loss of PET pellets (or nurdles) into the ecosystem Continue to be transparent in our annual sustainability reporting about the amount of packaging we use Place a new and clear recycling message on our packs later this year, whilst continuing to support the voluntary On Pack Recycling Label scheme of consistent communication on packaging recyclability Communicate the importance of recycling to more than six million people via our sampling campaigns, at summer music festivals and other brand events Work with our customers to share our marketing expertise and help them raise awareness among consumers of the value of recycling Continue to champion Government reform of the current producer responsibility system in Great Britain to ensure it encourages the collection and reuse of more materials and directs funds towards agreed priorities Work with Governments, and others, to understand how new interventions (including DRS) can play a role to improve recycling or reduce litter, as part of reform of the producer responsibility system Partner with community groups to support anti-littering and clean-up initiatives to improve beaches, rivers and local spaces 8
9 Coca-Cola operates in Great Britain as two businesses Coca-Cola Great Britain and its bottling partner Coca-Cola European Partners. Coca-Cola Great Britain is responsible for marketing a portfolio of 20 brands and more than 80 drinks to consumers, including Coca-Cola, Fanta, Sprite, Dr Pepper, Oasis, glaceau smartwater and Schweppes. These products are manufactured under licence and distributed by Coca-Cola European Partners, which operates six factories and employs 3,600 people across Great Britain. It is through this strong partnership that we have been able to make significant progress to reduce the environmental impact of our packaging in recent years. However, both companies realise there is much more to be done and have worked together to build a new end-to-end sustainable packaging strategy outlined in this discussion paper. 9
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