Considerations for a Statewide Container Recycling Refund Program. cmconsultinginc.com
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1 Considerations for a Statewide Container Recycling Refund Program cmconsultinginc.com
2 In business since 1998, Ontario, Canada What we do: Environmental research and report writing Stewardship program planning & development, evaluation and strategic counsel Waste diversion policy and strategy development Feasibility analyses of alternative waste minimization Life-cycle assessment and cost-benefit analysis of options to improve the management of various waste streams, including beverage containers ++. Development of recycling standards and industry best practices Reviewing and recommending optimal waste handling, treatment, and disposal practices
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4 Quick Review Why Deposit Return? 10 Reasons
5 The benefits of a modern DRS are multiple and cannot be achieved by any other alternative. 1. Higher collection rates: Overall collection rates in states with DRSs consistently range from 66 to 96% while rates in non-deposit states average 30%. 1. Cleaner, higher quality recyclables: DRSs produce clean materials which attract a price premium and can be used for higher value recycling compared to curbside recycling which offers often contaminated material attracting a lower price and down cycling for lower value uses, or disposed of in landfill. 1. Litter reduction (land; marine; storm water management ). 1. Environmental benefits: Improvement in greenhouse gas emission reductions associated with greater levels of high-value recycling 2. Equitable/Fair: Shifts the cost away from taxpayers and responsible consumers to those responsible for producing the waste (based on the polluter pays principle )
6 7. Supports the domestic beverage manufacturing industry by providing them with more recycled content (avoids using virgin material for new products) 8. Job creation: Ton for ton, DRSs require between 1.5 and 4 times more employees than curbside to collect, sort, and transport containers to a MRF or secondary processor. 9. Economic savings for taxpayers Reduced costs of litter collection Reduced storm water clean-up costs Reduced landfill fees Reduced waste collection and treatment costs Less recycling collection Improved economics of curbside recycling: A DRS can improve the economic viability of curbside by reducing volumes and the number of collection services and sorting operations which need to be provided. 10. A fundraising opportunity for charities and community nonprofits
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11 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% Points of Generation for Beverage Containers (source: Container Consulting Inc.& R.W. Beck) 0% PET HDPE Aluminum Glass away-from-home at home
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14 Waste Composition: Away-from-home (by volume) Sarnia and Niagara, ONT no deposits, except on alcohol Richmond, BC deposits on all beverages PPP: Printed Paper and Packaging
15 Different Models of Deposit Return
16 Return to Retail Most programs mandated R2R Used extensively in North America and Europe Most convenient for the consumer Yields the highest rate of return Larger retailers usually install RVMs Potential benefits to retailers include increased foot-traffic in store
17 Return to Redemption Centre/Depot Common in Canada, South Australia Any organization may operate such centers, although certification of the center may be required Reduce pressure on retailers: RCs can reduce the amount of material returned to retail by an estimated 50-80% depending on population density
18 Reverse Vending Machines Commonplace in Europe and USA Consumers receive refund of their deposits by placing empty containers into the machine where they are scanned and sorted into separate bins Usually located in grocery stores and other retail locations where beverages are sold (high visibility and convenience) Increases system efficiency while reducing overall system cost Provides accurate, auditable data on the type and quantity of containers returned RVMs should be established within zones of convenience to retail operations International experience indicates that these operations could operate on a stand alone basis locating machines in service stations, shopping centre parking lots, and convenience stores
19 Common Canadian Model Features Centralized agency (gov or industry) administers registration of deposit sales by type and size; collection of deposits; paying handling fees & refunds; and finance education; Unredeemed deposits & material revenues off-set costs; In some cases, a portion of the unredeemed deposits is given the municipal authorities to help finance curbside recycling Auditing system in place to mitigate fraudulent redemption; Handling fees are set in regulation Trend for differentiated handling fees
20 Return to Depot (Alberta)
21 New York De-Centralized system. Each distributor administers their own obligation. This means they hire a third-party collector to pick-up their own brand of beverages. In some cases, they collect themselves when delivering full goods. (reverse logistics) Distributors must pay redemption centres a 3.5-cent handling fee, plus the refund. This accounting is done individually by distributors and their own contractor (like Tomra for example) 20% of Unredeemed deposits and material revenues off-set costs;
22 New York Hybrid (R2R & RC)
23 A Central Deposit organization Operations Manage and design the flow of full and empty containers + clearing of deposits Approval and quality assurance of manual collection procedures Approval of collection equipment Administration of handling fees / compensations Awarding of transportation and depot contracts Registration of new products / containers into the system Design / control the use of deposit labels Material trading and quality Negotiation of contracts / sale of material Quality assurance and product development Marketing Marketing of the container return system towards consumers Data management and reporting Aggregation of data from automated and manual collection sites Clearing of deposits across the different trade levels in the system Reporting to competent body (Government) of achieved collection rates
24 System Accountability (Anti-Fraud Measures)
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27 Predicting the impact on recycling rates
28 Impact on Beverage Container Recycling rate: Beverage container recovery will increase substantially
29 Impact on State Recycling Rate: It will be dependent on many variables including: Changes to the recyclables stream Effectiveness of Zero Waste initiative (as per draft plan)
30 Forecasting the impact on current County recycling revenues
31 Many different inter-related variables and assumptions will determine how Counties are impacted. These include (but not limited to): The changing composition of the recycling stream over time; The composition of the beverage container stream over time; The value of the commodities received by MRFs; The agreement that the County has with their MRF operator; The volume and density of those recyclables; The flexibility of MRFs to re-negotiate their processing/ton fees (See Toronto case study) The new materials introduced to the existing MRF s technology; The participation rate (stays the same, up or down?) Are there new suppliers of material to the MRF (IC&I; MF; ) What Counties pay for.. (collection &/or processing &/or garbage &/or litter.. Etc. etc. Will depend. How are the contracts structured?
32 Case Study: City of Toronto, Canada City of Toronto reported that the introduction of the Ontario deposit return program on wine and spirit containers resulted in net savings to their existing curbside program of $448,000 in 2007, and $381,000 in 2008 (mostly due to reduction in processing and disposal costs of glass) They saved $, even when the processor increased their per/ton cost due to a material change with the recycling stream. (as a result of deposit return on all alcohol containers (much less weight from glass)
33 Recyclable stream is in constant state of change Other Residential (SF) Packaging Residential (SF) beverage containers Residential Newsprint MRF Input (tonnes)
34 Here s the Bad News for MRFs Fully developed residential recycling programs are beginning to see tonnage declines due to behavior/consumption and packaging changes. This means: Changes in composition of recycling stream Quality of materials from MRFs start to become a concern from end markets Operators have or will notice a drop in Old Newspaper (ONP) (significant in some cases) and increase in Old Corrugated Cardboard (OCC) Increase in convenience packaging
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44 What does the Maryland MRF stream look like in the future under a Zero Waste Policy?? SF & MF packaging and paper IC&I Paper recyclables MRF Input (tonnes)
45 Financial Impacts MRFs (private or public) may loose some revenue but can gain it back by redeeming deposit containers that continue to enter the MRF. Opportunity for new capacity for increased throughput from greater recycling of non-beverage materials like paper and paper packaging. Less glass in a MRF is a good thing (reduced contamination; and less wear and tear on equipment). Municipalities/Counties (Taxpayers) save from: Less recycling collection Less garbage collection and disposal Less litter to cleanup land-based; marine-based empty bottles and cans
46 A STATIC PICUTRE: ASSUMES EVERYTHING ELSE REMAINS THE SAME A look at the annual losses and gains to municipalities (per HH) from the introduction of a new bottle bill (MN & MD) or expansion of the existing bottle bill (VT & MA) $6.00 $4.00 $2.00 $- MD VT MN MA $(2.00) $(4.00) $(6.00) $(8.00) $(10.00) Avoided diposal (per HH) Avoided recycling collection (per HH) Lost net revenues in MRFs (net of processing)
47 A look at the annual losses and gains to municipalities (per HH) from the introduction of a new bottle bill (MN & MD) or expansion Similar of the existing Case bottle bill Studies (VT & MA) $5.00 $4.00 $3.00 $2.00 $1.00 $- $(1.00) MD VT MN MA $(2.00) $(3.00) Avoided diposal Avoided recycling collection Net lost revenues for MRFs (assumes redemption of depsosit containers in MRFs)
48 Other Considerations about finances The unredeemed deposits fund will be high in the first few years of the program as it reaches maturity. (~$90M at 30%; 50% ) Some of these funds can be used to off-set capital costs for program set-up and implementation.
49 New Opportunities Higher volumes of beverage containers will be recovered and need to be processed. Higher volumes of clean valuable materials will be collected and can be used by local/regional and national end-markets, rather than being shipped over-seas. Existing businesses can serve as redemption centres building on existing capacity Existing municipal facilities can play a revenue generating role in managing collection of these new containers.
50 Data & Information Sources Container Recycling Institute s Beverage Marketing Data Analysis (BMDA) 2012 sales in tons and units (MD, MN) Assumed 25% current beverage recycling rate in MD Material revenue values per ton, Recycling Refund System Cost Benefit Analysis, January 2014, RSE., unless material revenues are identified specifically in a State report. Censes bureau for households, unless identified specifically in State report. Final Report to Vermont, November 2013, DSM Final Report to Massachusetts, 2009, DSM Minnesota, Recycling Refund System Cost Benefit Analysis, January 2014, RSE
51 Examples of using stores/retail to run a bottle deposit program
52 Connecticut
53 Quebec
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55 Michigan
56 Holland
57 Oregon
58 California
59 California Brazil Japan
60 QUESTIONS?
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