Why are we not taking advantage of our container deposit systems?
In April 2018, The Australian published a story highlighting beverage companies were pocketing $400m per annum from unclaimed container refunds in New South wales (NSW).[1] The new container deposit scheme was introduced in NSW on December 1, 2017 and since this time only 13% of containers in circulation have been returned to a recycling facility.
The new system in NSW was established in partnership with the five biggest drink companies — Coca-Cola Amatil, Carlton United Breweries, Lion, Coopers and Asahi — who established a company called Exchange for Change. NSW Environment Minister Gabrielle Upton has said that Exchange for Change cannot earn profits from the exercise.
How are the beverage companies making money?
The current system of the NSW Container Deposit Scheme is a close copy of the South Australian (SA) and Northern Territory (NT) schemes which work via offering households a 10c refund when they return their bottles to a container deposit scheme facility. To facilitate this refund, beverages that are part of the scheme are sold at an extra $10c. The below diagram highlights this flow:
This means that when people do not return bottles to a facility, the 10c ‘refund’ remains with the manufacturer as they are only required to pay the ‘super collector’ (see diagram above) for the quantity of bottles collected.
The current issue in NSW is (according to The Australia) there is no requirement for beverage companies to spend this extra profit on incentives that contribute to reduced waste / increased recycling[2]
So, does this mean the new container deposit system should be scraped?
ABSOLUTELY NOT!
Despite the teething problems presented in NSW, there is ample research to show the success of incentives. BehaviourWorks Australia at Monash University recently reviewed research and data from 47 examples of container deposit refund schemes round the world. The findings show that on average schemes recover 76% of drink containers.[3] In SA, the return rate is 80%.[4]
Container deposit systems looked in depth at how Australia’s container deposit systems compare to the rest of the world and found Australia is falling behind our OECD counterparts when it comes to recycling. Australia produces 2.23kg of waste per capita per day according to the World Banks’ What a Waste: A Global Review of Solid Waste Management. This is close to double the global average of 1.2kg per capita per day.[5] And, we only recycle 41% of this waste. [6]
Australia is ranked 13th out of all OCED counties when it comes to how much we recycle.
A UK article highlighted research conducted by Greenpeace and Keep Britain Tidy showing the recycling rates of countries with container deposit systems and without.
“The fact that container deposit systems work is undeniable. However, we can’t just expect a cultural change overnight with the implementation of a new system.” Says Brett Duncanson, Chair of Container Deposit Systems. “there are many factors at play to ensure a successful program implementation.”
Across the globe, and closer to home in SA and the NT, the system is working and helping to solve the current plastic crisis. So why is the NSW scheme reactions negative? Below, Container Deposit Systems looks at three core needs to ensure a successful program and how the new NSW Scheme can be improved.
1. Ease of Overall Process
There are currently 600 container collection points in NSW (including vending machines and donation stations).[7] Whilst location of participating facilities increases the ease for people to dispose containers, the core need in NSW is a community led supply chain. In SA, there are only 132[8] deposit centres, yet there is an impressive return rate of almost 80%.[9]
When comparing physical size, SA is 22% larger than NSW. Arguably, the key to the success of the scheme in SA is the establishment of supply chain systems with local community groups, schools and charities. The system support network has become integrated into the process. Examples include Scouts South Australia who even have their own additional network of Container Deposit Facilities established: https://scoutrecycling.com.au/find-a-scout-recycling-centre/
NSW is following this approach and looking to this model to encourage more not-for-profit groups to leverage the funding opportunities. However, this will take time. The state has implemented a fundraising / donation partner system: http://returnandearn.org.au/community which will ultimately increase ease in the supply chain and therefore, the return rates.
2. Education Programs and Funding
Most businesses agree that the quote “If you build it, he will come” (from Field of Dreams) is NOT how to get participation / customers! Any new program, such as a new container deposit scheme, requires a series of education programs to support growth. The NSW case study for A Container Deposit Scheme (2016) submission stated that: There is a need for an extensive communication and education program from the NSW Government based upon the proposed CDS design, integrated with anti-litter messages.[10]
In response to this statement, the government has established “Return and Earn” which is a campaign designed to educate residents on the new container deposit systems scheme. It would be expected the education program will expand over the next 12-24months to also include schools, community groups and local council run incentives. All these incentives will begin to change behaviour and eventually increase the return rates in NSW.
3. Investment in Recycling Facility Systems and Technologies
Investments into recycling technologies is an action all states need to implement to increase recycling rates. Currently, many facilities cannot take items which are broken and / or contaminated (with residue from liquids). Further, many locations are at limited to the number of containers they can sort and process.
Increasing efficiencies in processing containers will ultimately benefit both recycling facilities and consumers. There are already technologies in sorting containers and managing broken items, however, there are many facilities who are not yet able to take advantage of these innovations.
Government funding for investment into new technologies for the recycling industry can work in collaboration with container deposit schemes and thus, generate increased revenue to continue to invest back into the recycling industry.
In conclusion, Container Deposit Systems sees there are many opportunities for the new program to establish itself as the new norm; and most importantly, the program should continue. Establishing a program may be a quick win, however, changes in consumer behaviour will take longer to realise. Initiatives such as education programs, community involvement and investment into innovative technologies will support to achieve the ultimate goals of reducing litter, increasing return rates, and developing a circular recycling economy.
About Container Deposit Systems
Container Deposit Systems was formed with a vision to oversee the implementation of improved operational practices in recycling facilities. The company offers a range of services to recycling depot facilities to drive productivity improvements and transition traditional recycling facilities into modern technically advanced operators.
The company achieve this through patented technologies which deliver manufacturing automation to auto-sort materials via a highly sensitive multi-sensor integration. Systems integrations enable facilities to further gain efficiencies through workflows, materials handling, logistic processes, facility layout and design, customer interaction and data acquisition and management.
Container Deposit Systems technologies are designed and manufactured in Australia with local partners Sage Automation and Macweld Engineering.
For more information, please contact us directly.
References
[1] https://www.theaustralian.com.au/national-affairs/state-politics/companies-pocket-400m-a-year-from-unclaimed-refunds/news-story/9aaaaef93d76e02c3be9d3b4fc764bb3
[2] https://www.theaustralian.com.au/national-affairs/state-politics/companies-pocket-400m-a-year-from-unclaimed-refunds/news-story/9aaaaef93d76e02c3be9d3b4fc764bb3
[3] https://theconversation.com/container-deposit-schemes-work-so-why-is-industry-still-opposed-59599
[4] http://www.recyclesa.com.au/container-deposit-legislation/cdl-return-rates/
[5] https://www.weforum.org/agenda/2015/08/which-countries-produce-the-most-waste/
[6] https://www.weforum.org/agenda/2015/08/which-countries-produce-the-most-waste/
[7] http://returnandearn.org.au/
[8] https://www.epa.sa.gov.au/environmental_info/container_deposit
[9] https://www.epa.sa.gov.au/environmental_info/container_deposit
[10] https://www.lgnsw.org.au/files/imce-uploads/127/lgnsw-final-draft-submission-on-cds-feb-2016.pdf