Container Deposits: Boomerang Style

Adding some grunt to Australian Recycling

www.boomerangalliance.org.auNov 2012

POLICY OBJECTIVES1. 75-85% beverage container recycling rate

of high value, uncontaminated material2. Financially sustainable with no

government or packaging industry funding3. Network of drive through recycling centres

for range of products servicing households and commercial sector

4. Removal of beverage container litter from streets, parks, rivers and ocean

5. No consumer charges (other than refundable deposit)

6. Convenient return system7. Funds and material to grow the recycling

chain and local processing8. New jobs, charity income

Public support doesn’t waiver over many years (82% in latest Newspoll)

Industry alternatives/fear campaigns fail to convince community and governments, which refuse to drop CD from decision agenda

After 10 year community campaign, environment ministers on cusp of 2013 decision

Bi-partisan political support in some states and territories

Campaign gone viral across all demographics – young, senior, income, voting and education groups

THE POLITICS

FACTS & FICTIONS• Kerbside operations harmed – WRONG say last 5 state and

federal gov’t inquiries*

• Families hit $300pa – WRONG, price data false^ & our CD system is cost-neutral

• More bins the answer – WRONG as unproven and contaminated (and councils pay for lift, transport, landfill and replacement costs)

• It’s out of date – WRONG, more schemes each year and Boomerang’s is modern version – unlike Sth Australia’s (& NT)

• Fails cost-benefit test ($1.4b over 20yrs!) – WRONG, CRIS didn’t quantify many benefits; modeled costly system and included disputed $447m ‘participation’ costs

• Benefits and costs unproven – WRONG, it’s based on real experience around world

• It’s a tax – WRONG, it’s a deposit you choose to redeem

* Some council contracts will require transition arrangements

^ AFGC assumes all prices rise by 20cents but this has not occurred in NT and half is the deposit . Senate Inquiry says ‘weak methodology and poor data’ (2012).

Container deposits – not out of date

Return rates: biggest influence is convenience and deposit level (eg, SAust is 10 cents, less convenient; Germany .25euro, very convenient)

PERFORMANCE AROUND THE GLOBE

Recovery

R

ate

100%

0%

Net Cost0- +

Nova Scotia

Newfoundland

California

B.C.

Alberta

HawaiiSth Aust.

Sweden

Norway

Finland

New York

Maine

NB: Where the beverage industry runs the scheme it is assumed that unredeemed deposits are used to offset the cost of the scheme

Net Costs & Collection Rates – BA model net positive

Sources: CM Consulting , BottleBill.org, & pers coms

Michigan

BA

• One independent Co-Ordinator, not multiple – and not run by beverage companies (no conflict of interest) – bottlers only provide deposit

• Containers not sorted by many brands, only material

• Lower handling costs because more efficient with automation (reverse vending machines, RVM) and bulk sorting machines

• Significant transport savings due to compaction before transport and no travel to brand centres

• Unredeemed deposits used to support system (not beverage company profits) and with material sales produce surplus for more recycling

• Accurate data provision via barcodes simplifies system admin and (eft) financial payments

• Household collection centres more conveniently located – no extra travel – and open outside working hours and on weekends

• Financially supports new commercial and industrial recycling

BA model advantages over SA/NT

So how does it work? (details follow)

The Convenience Point is the everyday consumer interface Uses automation (RVM) to best manage a high number of (low

volume) transactions for retail voucher Will be found in or near every shopping centre (1800+ locations

around Australia) Established in car parks – not in-shop, so retailer space not

impacted Car park owners earn $18 - $24k per annum RVM owner keeps site tidy (incl bin for other waste) and machines

working

Convenient return system

WHAT DO RVMS DO? Easy and quick interface with consumers and

provide voucher Accept all major container materials (glass,

aluminium, steel, PET, HDPE, other plastics, LPB etc.)

Sort by material, colour, & type (using barcode + shape); collect excess liquid

Reject non-container and non-deposit and filled containers

Compact containers for efficient transport and notify when “bins” full

Link to Central Coordinator database and retailer point of sale systems

Provide comprehensive information to government and industry for audit

Automatic updates for introduction of new containers

Over 100,000 RVMs worldwide

Retailers benefit from more sales

46

30

0

10

20

30

40

50

60

Returned empties (1.266) Didn't return empties(1.164)

46 45

53

37

2925

3337

0

10

20

30

40

50

60

Albert Heijn(618)

Aldi (398) Superunie(845)

Laurus (569)

Returned empties Didn't returned empties

Netherlands Shopper Surveys, average spend (TSN Gallup 2003)

Is designed to be flexible and provide a range of currently unviable services, not only for beverage containers:◦ Affordable recycling for SME’s, commercial sector (via redeemed

deposit)◦ A convenient point for households to dispose of problem wastes

Existing MRFs and transfer stations can be adapted Functions like the wholesaler in a traditional supply chain taking

transactions with much higher volumes Fast turnaround for MSW and C&I redemption Will also be established for rural and regional areas where no

current service Refunds via EFT to repeat redeemers

THE HUB

Consolidates materials Shortens the length of

transport (and in turn costs)

Supports the Co-Ordinator in managing transport

Manages delivery of recyclate to reprocessor

THE HUB – A LINK POINT

Overall impact on council kerbside(Options 4a, 4b are CD)

“Councils across Australia could save $69 to $183million annually.”Mike Ritchie, Investigation for NSW Local Gov’t Assoc’n, 2012

PWC / Wright Corp Strategy- CRIS 2011

Cost Party Option 4A Option 4B Option 2A Option 2B Option 2C

Kerbside collection & tpt

Local Gov’ t

($737) ($737) $58 $26 $76

Recycling at MRF

Local Gov’t / Recyclers

($1,964) ($1,964) $66 $118 $194

[Note: some council contracts will require transition arrangements]

System revenue from sale of the material collected (premium value), unredeemed deposits^ and interest – 5.2c per container

System costs (handling fees, transport, retail incentive, Co-Ordinator fee) – 4.2 – 4.9 cents per container

Surplus of 1-.3 cents pc

^ accumulated via initial ramp up and after 80% recovery achieved

* Based on actual systems – detailed breakdown available

How can it be financially viable?*

There is a surplus when CD schemes are introduced (high % of unredeemed in initial years) - in excess of $1billion for Australia

+ an average $38million p.a. ongoing

We believe that we should fund:◦ A bounty scheme – rewarding reprocessors

for increasing local recycling◦ Offset costs of MSW recycling for regional

and rural local government◦ Non-beverage container litter programs ◦ Support for council contract transition

STRENGTHENING RECYCLING