Considerations for a Statewide Container Recycling Refund Program - - PowerPoint PPT Presentation

cmconsultinginc.com Considerations for a Statewide Container Recycling Refund Program

• 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

Quick Review – Why Deposit Return? 10 Reasons

• 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’)

The benefits of a modern DRS are multiple and cannot be achieved by any other alternative.

• 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 non-

profits

Points of Generation for Beverage Containers

(source: Container Consulting Inc.& R.W. Beck)

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% PET HDPE Aluminum Glass away-from-home at home

Waste Composition: Away-from-home (by volume)

PPP: Printed Paper and Packaging

Sarnia and Niagara, ONT – no deposits, except on alcohol Richmond, BC – deposits on all beverages

Different Models of Deposit Return

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

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

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

• perations – International experience indicates that these operations could
• perate on a stand alone basis – locating machines in service stations,

shopping centre parking lots, and convenience stores

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

Return to Depot (Alberta)

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;

New York – Hybrid (R2R & RC)

A Central Deposit organization

• 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

Operations

• Negotiation of contracts / sale of material
• Quality assurance and product development

Material trading and quality

• Marketing of the container return system towards consumers

Marketing

• 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

Data management and reporting

System Accountability

(Anti-Fraud Measures)

Predicting the impact on recycling rates

Impact on Beverage Container Recycling rate: Beverage container recovery will increase substantially

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)

Forecasting the impact on current County recycling revenues

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?

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)

Recyclable stream is in constant state of change

MRF Input (tonnes)

Residential Newsprint Other Residential (SF) Packaging Residential (SF) beverage containers

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

What does the Maryland MRF stream look like in the future under a Zero Waste Policy?

MRF Input (tonnes)

IC&I Paper recyclables

?

SF & MF packaging and paper

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

$(10.00) $(8.00) $(6.00) $(4.00) $(2.00) $- $2.00 $4.00 $6.00 MD VT MN MA

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) Avoided diposal (per HH) Avoided recycling collection (per HH) Lost net revenues in MRFs (net of processing)

Similar Case Studies

$(3.00) $(2.00) $(1.00) $- $1.00 $2.00 $3.00 $4.00 $5.00

MD VT MN MA

A look at the annual losses and gains to municipalities (per HH) from the introduction of a new bottle bill (MN & MD) or expansion

• f the existing bottle bill (VT & MA)

Avoided diposal Avoided recycling collection Net lost revenues for MRFs (assumes redemption of depsosit containers in MRFs)

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%; ~$80M @ 50% …)
• Some of these funds can be used to off-set capital

costs for program set-up and implementation.

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.

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

Examples of using stores/retail to run a bottle deposit program

Connecticut

Quebec

Michigan

Holland

Oregon

California

California Brazil Japan

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