Rewarding Recycling Learnings from the World's Highest-Performing Deposit Return Systems - TOMRA
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Rewarding Recycling Learnings from the World’s Highest- Performing Deposit Return Systems
TABLE OF CONTENTS
1. Executive summary pg. 3
2. About TOMRA pg. 10
3. About this paper pg. 13
4. The challenge pg. 14
5. High-performing systems: what can they deliver? pg. 17
6. Key design principles and elements of successful
deposit systems pg. 21
7. Conclusion pg. 60
8. Appendix
o Frequently asked questions pg. 62
o Glossary of key terms pg. 65
Endnotes pg. 67
2 Rewarding Recycling
Executive summary
1. Executive summary
A series of trends are disrupting recycling The second trend is concerns raised by the Motivated by this confluence of trends,
and waste management conversations Basel Convention* and the associated rising policymakers, environmental organizations
worldwide. The first is a growing awareness costs of collection, processing and recycling and businesses are actively evaluating
that plastic waste is polluting even the far for parts of the world that used to rely on solutions such as a deposit return system
reaches of our planet. Scientists have China, India, and many other Asian (DRS) for the sustainable management of
determined that plastic waste including countries to buy and sort through mixed single-use beverage containers.**
litter is leaking into the oceans at a rate of recyclables.
a garbage truck per minute, and forecast Deposit return systems add a small but
there will be more plastic in the ocean than A third trend is a growing aspiration to meaningful deposit to the sale of each
fish by 2050 (by weight).1 This has led shift the industrial model away from “take- beverage, which is repaid when consumers
researchers to review how much plastic has make-waste” to a “circular economy”, where return the empty containers for recycling.
actually been recycled given current resources are captured and utilized at their DRSs are typically established through
recycling systems in place. Scientists have highest material value for as long as pos- legislation passed by state or national
determined that of all the plastic ever sible. This is most evident in the European governments. The policy is known for its
produced, only 9% has been recycled.2 Union’s Circular Economy Package, which effectiveness, with leading systems
established legally-binding collection and routinely recovering in excess of 90% of
recycling targets for common materials. deposit containers sold.3
* During the United Nations Conference of the Parties in Basel, Switzerland in May 2019,
the UN agreed to require consent from importing countries before exporting of mixed,
unrecyclable and contaminated plastic waste can proceed.
** Deposit return systems are also known as container deposit schemes, “bottle bills”,
container deposit legislation, or beverage container deposit and refund programs.
3 Rewarding Recycling
Executive summary
Figure 1:
Principles and elements of high-performing
deposit return systems
All of the elements – when applied together – will address global waste challenges and advance a circular economy.
PRODUCER
PERFORMANCE CONVENIENCE SYSTEM INTEGRITY
RESPONSIBILITY
1. Broad scope of beverages 4. Convenient redemption 7. Extended producer 10. Centralized, non-profit
and containers system for consumers responsibility financing administration and
2. Minimum deposit value 5. Separately charged and 8. Reinvestment of operations
3. Return-rate target fully refundable deposits unredeemed deposits 11. Government reporting
6. Container deposit markings and material revenue and consumer
for consumers and manual within the system communication
returns, barcodes for 9. Recycled content 12. Government enforcement
accurate accounting requirements
4 Rewarding Recycling
Executive summary
In 2019, the European Union adopted the markets, TOMRA identified a series of
Single-Use Plastics Directive, mandating “best practices”. Principles shared among
that its member states collect 90% of plas- high-performing deposit return systems
tic beverage containers by 2029. Experts include:
say this will be difficult4 to impossible5 to All of the elements
achieve without a deposit return system in • Performance: A collection target for all – when applied together –
place, and these programs are on the rise. beverages plus a meaningful deposit
will address global waste challenges
delivers strong results.
and advance a circular economy.
In the past three years alone, 22 states or • Convenience: A redemption system that
countries have committed to update is easy, accessible and fair for all users.
existing deposit systems or develop new • Producer Responsibility: Producers
systems.6 In addition to this group, at least finance and invest in the system using
12 states or countries are currently working the unredeemed deposits, commodity
on updating existing systems or developing revenues, and an eco-modulated EPR fee.
new systems.7 In 2019, nine US states • System Integrity: Trust is built into the The 12 key elements of high-performing
proposed adopting deposit policies, which system’s processes through transparent deposit return systems include:
is “way more interest than we have seen in management, a data-driven clearinghouse,
the past”, according to the Container and reliable redemption technology. PERFORMANCE
Recycling Institute, a non-profit that 1. Broad scope of beverages and
monitors deposit systems.8 containers: The legislation clearly defines
In practice, these design principles are which beverages, material types and sizes
TOMRA has over 45 years of experience brought to life through 12 key policy or will be included in the program. Leaving out
working in deposit return systems, today program elements. All of the elements – one beverage category could mean millions
working in 40 deposit markets, in every when applied together – will address global of recyclable cans or bottles are wasted and
part of the value chain. TOMRA has unique waste challenges and advance a circular potentially littered. When New York
first-hand insights based on its global economy. Prioritizing one but not the other expanded its DRS to include water in 2009,
experience in the field. Now is the right time will disrupt a deposit system’s performance it doubled the amount of Polyethylene
to understand what makes some programs and cost effectiveness. As with all policies, Terephthalate (PET) plastic containers
more successful than others. After local culture, infrastructure, and politics captured by the system. Water containers
analyzing global deposit systems and need to be factored in to shape the system now make up about 25% of all the contain-
reflecting on its experience in those that works best for each market. ers that New Yorkers redeem for recycling.
5 Rewarding Recycling
Executive summary
In addition, including more beverage types Regulators then measure performance
reduces consumer confusion at the redemp- and enforce provisions. (See Key Element
tion point, and leads to better economies of #12: Government enforcement). Setting
scale for the system. expectations through targets also grants a
license for businesses to design the
2. Minimum deposit value: Providing program with flexibility and responsiveness
a financial incentive to recycle is what in mind. For example, Oregon’s stakeholders
separates deposit return systems from other agreed to incorporate a performance target
collection programs. Decades of redemption in a 2011 legislative update. By 2016, the
data show that meaningful deposit levels return rate had fallen below the target of
effectively drive more containers into the 80% for two consecutive years, and
program. For example, Michigan uses a triggered an automatic increase in the
10-cent deposit to achieve a return rate deposit value from 5 to 10 cents.* The return
around 90%.9 By contrast, Connecticut’s rate rose from 64% in 2016 to 86% in 2019.11
5-cent deposit has not changed since 1978,
when it was an engaging value. The return
CONVENIENCE
rate has dropped from 88% in 2002 to 50%
4. Convenient redemption system
in 2018, making it tied for the lowest return
for consumers: High-performing deposit
rate in the world.10 High-performing systems
systems make redemption easy for the
establish a minimum deposit value at a
consumer. Consumers have a right to easily
meaningful level and allow producers to
recoup their deposit money, and producers
raise it as needed to reach performance
and retailers have an obligation to make
targets.
that possible. High-volume redeemers and
the informal economy also should be
3. Return-rate target: Setting a collection accommodated in the design of the
target establishes the policy’s objective, and
redemption network. The most common
aligns producers to set incentives and pro-
and effective redemption model is known
vide convenient redemption options. For the
as “return to retail”, where retailers who
purposes of this paper, “producer” means
sell beverages must take back the empty
the company first selling the deposit
containers. Nine out of 10 of the world’s
container in the market (e.g. producer,
best-performing deposit return systems
importer or distributor).
* April 2017
6 Rewarding Recycling
Executive summary
employ return-to-retail collection, achieving eligible for a deposit, high-performing
an average return rate of 91%.12 Germany, systems require standard text or a logo to
which has the highest-performing deposit be printed on each beverage container.
system in the world with a return rate of A visual marking also allows redemption
98%, leverages retailers in this way. locations that process containers manually
to easily recognize containers eligible for
5. Separately charged and fully deposit. Barcodes serve a similar purpose
refundable deposits: Effective deposit in that they enable automated redemption
systems label the deposit value separately technology to recognize and count each
on receipts and store shelves, and ensure deposit container. This provides accurate
deposits are fully refundable. A true payments to consumers, a baseline level of
“deposit”, in any context, is designed to be security, and fair, transparent financial
returned in full when the payor completes accounting by keeping track of each brand.
a given action. This maintains the strong Unique deposit marks and market-specific
financial incentive and delivers higher return barcodes prevent fraudulent redemption of
rates than those with partial refunds (known non-deposit containers, and reduce costs.
as “half-back” models). The top-five Before the deposit system was launched in
performing deposit systems in the world New South Wales, Australia, beverages sold
(Germany, Netherlands, Finland, Denmark together in what is known as “multi-packs”
and Lithuania) all offer fully refundable did not have individual barcodes. This
deposits. Together they average a 92% would have created a situation where one
return rate.13 Listing the deposit value container sold individually would be
separately from the sales price on both accepted by an automated reverse vending
the store shelf and receipt helps educate the machine (RVM), whereas those sold in
consumer and avoids unnecessary “multi-packs” would be rejected in many
confusion. cases. Due to concerns about consumer
confusion, the government updated
6. Container deposit markings for labeling requirements to add individualized
consumers and manual returns, barcodes before the deposit system was
barcodes for accurate accounting: implemented.
For consumers to easily identify containers
7 Rewarding Recycling
Executive summary
PRODUCER RESPONSIBILITY
7. Extended producer responsibility
financing: Incorporating the principles of
Extended Producer Responsibility (EPR),
successful deposit return programs engage
producers and retailers to manage the
environmental impact of a product back into
the packaging production cycle. Producers
cover the net costs and influence the design
of their package for recyclability. See also
how they can utilize several cost-saving
measures (Elements #8 and #10).
8. Reinvestment of unredeemed
deposits and material revenue
within the system: A “license to operate”* In the case of aluminum beverage cans, ments in collection, processing and
is granted to producers in exchange for those income streams are even high enough recycling. For example, in January 2018 the
using the unredeemed deposits to reinvest to avoid any additional EPR fee from pro- price of food-grade recycled PET in the US
in the system, and with the additional ducers. In fact, the EPR fee per aluminum was 7% cheaper than virgin PET, but by
commodity income reduce their own net can was negative, meaning NOK 0.08 was mid-2020 it was around 35% more
costs. Norway, with its 89% return rate, actually rebated to producers (€0.007 / expensive.16 While brand owners have
provides a notable example. In 2019, the US$0.008).15 recently set ambitious commitments to
unredeemed deposits and material revenue source more recycled content, companies
were enough to cover more than 90% of 9. Recycled content requirements: have set similar targets in the past only to
Norway’s DRS costs: 49% of system costs Since high-performing systems allow make minimal progress.17 Mandates for
were offset by unredeemed deposits, 35% deposit system operators to retain revenue beverage producers to use recovered
from material sales, and 8% from other from the sale of containers collected, high materials, such as the EU’s requirement that
revenues (mainly interest) – only 8% needed and stable commodity values reduce overall PET bottles utilize 30% recycled content
to be covered through an Extended Produc- system costs. Like many commodities, by 2030, will stabilize recycled commodity
er Responsibility (EPR) fee from producers.14 recycled materials experience volatile values, thereby incentivizing high-quality
market prices, which creates risk for invest- recycling.18
* Refers to the permission from governmental authorities and more generally
8 from the public at large to conduct business in a specific jurisdiction. Rewarding Recycling
Executive summary
SYSTEM INTEGRITY to an independent “network operator”, THE UN CALLS FOR
10. Centralized, non-profit who is responsible for delivering certain
CONTAINER DEPOSIT SYSTEMS
administration and operations: pre-requisites such as a certain number of
Deposit systems provide a platform for collection points per capita. As leaders grapple with the extent of the
producers and retailers to responsibly challenges ahead to address waste and
manage the take-back and recycling of 11. Government reporting and transition to a circular economy, it’s evident
product packaging. Given there are typically consumer communication: Reporting the ambition of public policies will need to
hundreds of producers, importers, keeps regulators and the public informed grow to meet the moment. Scientists estimate
distributors and retailers operating in each about the performance of the program, to there is already more than 150 million tons
market, if every regulated organization measure progress towards goals. Education of plastics in the ocean today19 and this is
provides their own compliance service, raises awareness among the public about expected to triple by 2040 if no action is
overall system costs increase. High- how to participate in the deposit program, taken.20 The UN is rising to the challenge.
performing systems address this by which improves the public’s confidence and In 2017 the UN Environment Assembly passed
encouraging the beverage industry to the system’s integrity and performance. a resolution encouraging members to adopt
centralize some common DRS “innovative” approaches to marine pollution,
responsibilities under a non-profit entity. 12. Government enforcement: like container deposit systems.21
This “Central System Administrator” (CSA) While much of a high-performing DRS
facilitates cross-industry problem solving allows private-sector companies to imple- As the world enters the sixth decade of
and realization of cost efficiencies. Common ment and manage the system, government deposit systems for one-way (non-refillable)
responsibilities that a CSA manages include plays an important role as a regulator to containers, there are areas for improvement.
(among others) product registration, maintain performance, arbitrate violations No public policy can be established and
and maintain a competitive “level playing expected to meet its objectives indefinitely.
managing the deposit and fee
field”. Clear penalties that are higher than Changes in consumer products, packaging,
“clearinghouse”, and establishing fraud-
the cost of non-compliance reliably inflation and innovation are encouraging
mitigation protocols*. But making sure
motivate stakeholders to comply, and also system designers to consider “modernizing”
redemption is easy for consumers (including
invest in making the traditional deposit return models. By moving
the design of the redemption infrastructure
system more efficient. ahead with a thoughtful approach – one based
and its management) is not left solely to the
Legislation also defines on the principles of Performance,
CSA, because of the potential for conflicts
Convenience, Producer Responsibility and
of interest. System design is designated in auditing protocols and
System Integrity – more high-performing
legislation in most programs as the agency with
deposit return systems can become a reality.
“return-to-retail” redemption or delegated enforcement authority.
* See “Clearinghouse” definition, pg. 65.
9 Rewarding Recycling
About TOMRA
TOMRA COLLECTION SOLUTIONS
TOMRA Collection Solutions provides reverse vending solutions for Clean Loop Recycling
- collecting beverage containers that can be continually reused and recycled back into
new bottles and cans. With over 84,000 installations across more than 60 refillable and
2. About TOMRA one-way deposit markets, TOMRA’s reverse vending machines capture over 40 billion used
beverage containers every year for reuse or closed-loop recycling. The TOMRA system of
machines, digital solutions and service make recycling easy for deposit system owners,
We are living in an age of
retailers and consumers, all contributing to a more sustainable planet.
unprecedented consumption.
This is pushing us beyond the
boundaries of what our planet
can sustain. TOMRA seeks to
disrupt this paradigm with TOMRA SORTING SOLUTIONS
solutions that help to transform TOMRA Sorting Solutions applies advanced, sensor-based sorting technology to the
Recycling, Food and Mining industries to maximize resource productivity. TOMRA
waste into resources. We believe Recycling’s technology is favored by state-of-the-art material recycling facilities and the
TOMRA’s contributions of sensor- waste management industry. Over 6,000 TOMRA Sorting Recycling systems have
based technology, and over been installed in more than 100 countries worldwide. TOMRA Sorting Food reduces
waste in the processing of a wide range of foods, maximizing both yields and profits.
45 years’ experience working with Solutions from TOMRA Sorting Mining help to increase the energy efficiency and extend
private, public and civil sector the life of mining operations, increasing the overall value of mineral and ore deposits.
stakeholders around the world,
can help the entire value chain
optimize resource productivity.
To do this, TOMRA has invested in TOMRA CIRCULAR ECONOMY
TOMRA Circular Economy (TCE) was established to leverage TOMRA’s expertise to
two businesses and an innovation
accelerate the transition to a circular economy. With its leading position in collection and
accelerator. sorting product technology and recognized process knowledge, TCE will work to position
TOMRA as an essential strategic partner by collaborating with key business players across
the entire plastics recycling value chain. Our target is to develop new methods, processes,
technologies and business models, aiming to develop sustainable and holistic solutions.
TCE’s long-term focus will lead to new business opportunities beyond today’s business
through exploration of disruptive technologies and digitalization of the value chain.
10 Rewarding RecyclingAbout TOMRA
Our experience in container
deposit return systems
In 1972 our founders, Tore and Petter Planke, invented
the first fully-automated reverse vending machine after
a local grocery store asked for help with redemption
of beverage containers. Now retailers could offer their
customers a self-service option for returning their
empty refillable bottles for the deposit. Since then,
TOMRA has expanded to most container deposit
markets in world, providing invaluable experience in
system design, investment and execution.
TOMRA’s founders, Tore and Petter Planke
11 Rewarding RecyclingAbout TOMRA
TOMRA’s deposit system competencies
TOMRA’s experience extends beyond developing and managing technology. In some markets,
TOMRA partners with beverage producers in managing data and material recovery (US and NSW, Australia).
REDEMPTION DATA MANAGEMENT COLLECTION RECYCLING
RVM technology Clearing deposits/fees and Material pick-up, processing PET processing
managing data integrity and brokerage
12 Rewarding RecyclingAbout this paper
3. About this paper
This white paper was published for those stakeholders
looking for best practices and guidance to accelerate the
adoption of a circular economy, to meet performance
targets, and to address the chronic problem of beverage
container litter. This resource is also designed for
legislative and regulatory drafters seeking to understand
how to organize a DRS in a legal document. It is applicable
in the design of new deposit programs and modernizing
existing ones. However, it is recognized that local culture,
socio-economic groups, infrastructure, and politics will
add nuances.
This paper does not seek to describe a comprehensive
economic analysis of recycling systems. It provides
information on the highest-performing DRSs and their For those stakeholders looking
best practices. However, where data is available, we have for best practices and guidance
presented it to illustrate the cost efficiency of such a
system. to accelerate the adoption of a
circular economy.
13 Rewarding RecyclingThe challenge
4. The challenge
Today, a number of trends are shaping a 2050 (by weight).23 This has led research- • Rising recycling costs as the world
debate about how society approaches ers to review how much plastic has actually focuses on material quality: After years
waste: been recycled given the current recycling of pollution concerns, the China National
system in place. Scientists have determined Sword policy effectively prohibited the
• Ocean plastic leakage: As of July 2018, that of all the plastic ever produced, only import of “personal/household waste plas-
policymakers have passed 325 laws to regu- 9% has been recycled.24 In the absence of tic” and “unsorted waste paper”, removing
late the use of plastic packaging.22 Scientists a global policy framework to address this a major buyer from the global market. This
have determined that plastic waste is leak- global challenge, producers have set nearly eliminated demand for low-quality
ing into the oceans at a rate of one garbage ambitious commitments like Coca-Cola’s recyclables and forced communities to in-
truck per minute, and they forecast there goal to take back one can or bottle for vest in raising material quality. For example,
will be more plastic in the ocean than fish by every one they sell by 2030.25 the collective exports from the US to China
14 Rewarding RecyclingThe challenge
and Hong Kong dropped by 94% for plastic to use it for manufacturing new products, rate of beverage containers actually
scrap and 60% for paper scrap.26 The Basel which means society is unnecessarily decreased.31 This suggests public motivation
Convention Plastic Waste Amendments in disposing of valuable resources. for recycling plays an important role in the
2019 only amplified this effect by placing success of waste management.
regulations on the global trade of plastic • Mandated performance targets: As
waste. Where some communities used to policymakers transform public sentiment • Glass recycling remains a challenge:
make a small profit from recycling, many are to “fix” plastic waste issues into legislation, Glass, in particular, is challenging for
now covering steep costs.27 Some have shut beverage producers have new, legally- curbside recyclers to handle (especially in
down recycling services altogether due to mandated packaging collection targets to single-stream operations) as it often breaks,
budget concerns. Others have called achieve. The European Union’s Single-Use contaminating other materials and reducing
for producers to take on a larger role in Plastics Directive, for example, mandates its own value. A survey of 45 material
financing waste management.28 the collection of 90% of single-use plastic recovery facilities (MRFs) throughout the
bottles with caps and lids by 2029, with an US Northeast found that facilities accepting
• Circular economy aspirations: A interim target of 77% by 2025.30 curbside material sent almost 40% of glass
staggering amount of perfectly recyclable straight to the landfill to be buried or used
material is sent to landfills, incinerators or • Access alone has not increased as landfill cover.32 Separate glass collection
leaked into nature each year (86% of recovery: As the number of people who systems in Europe perform better, with an
plastic packaging globally).29 This material is had access to curbside recycling quadrupled average collection rate for recycling of 76%
actually sought after by industries seeking from 1990 to 2010 in the US, the recycling (2017).33
EU Single-Use Plastics Directive targets for plastic beverage bottles
Collection targets for plastic beverage bottles Targets for recycled content in plastic beverage bottles
*
*
Collected containers Unrecovered containers Recycled content Virgin plastic
* 2025 target for PET beverage bottles only. 2030 target for all plastic beverage bottles.
15 Rewarding RecyclingThe challenge
• Committing to recycled content: In rate for PET bottles would need to rise to tems serve a significant portion of the
part due to the challenges outlined above over 70%, up from 29% in 2019.34 market and carry out these functions well,
and the associated public pressure, major but there are opportunities to improve
beverage brands have announced goals to These challenges have led policymakers to efficiency and apply controls. Connecti-
increase the amount of recycled content evaluate container DRSs for their ability to cut’s deposit value has stayed at the same
used in their containers. This presents a collect high quantities of beverage contain- level since it was passed in 1978, US$0.05
dilemma, because there is simply not ers and maintain the materials’ high quality (€0.04), and as a result the state has the
enough post-consumer PET plastic collected in a way that enables closed-loop applica- lowest return rate in the world at 50%.35
and recycled at a high quality to meet these tions like “bottle-to-bottle recycling”.
commitments. For example, the National In addition, the operators that manage
Association of PET Container Resources in However, not all container deposit systems deposit systems strongly influence its
North America estimates that in order for US deliver high performance. This is due to the success. While fundamentals like a
beverage producers to meet a 50% recycled fact that no two deposit systems are alike. meaningful deposit value drive return rates,
PET content threshold, the national recycling For example, both Norway and Connecticut leaders need to maneuver wisely to evolve
(USA) have deposit return systems but they the program over time.
are vastly different in structure and perfor-
Public motivation for mance. Norway’s model allows producers to Think of the DRS like a car: if you use the
recycling plays an important manage the system’s operations and admin- wrong component or the driver has had no
role in the success of waste istration through a central non-profit entity training, the car will struggle to drive and
and retailers provide a convenient redemp- ultimately break down. By using the right
management.
tion system. (For the purposes of this paper, parts with a seasoned driver and consistent
“producers” means beverage producers, maintenance, the car will drive reliably for
importers and/or distributors). The deposit years.
value itself is relatively high at €0.18-0.27
(US$0.21-0.32) and it achieves a container The challenge for policymakers and stake-
return rate of 89%. In comparison, Connecti- holders alike is to negotiate legislation that
cut’s statute assigns responsibilities to brand will enable sustainably high performance.
owners but does so without a redemption In the following chapter we outline what
target. Further, it does not encourage deposit return systems are capable of
centralizing management of operations and delivering, and in Chapter 6 what makes
compliance measures. Two third-party sys- these programs “work” in practice.
16 Rewarding Recycling5. High-performing deposit return systems:
what can they deliver?
To better understand deposit return Guaranteed recycling
systems, it helps to review the results of While collecting material is half the
high-performing models, such as the challenge, the other half is maintaining the
following: material’s value throughout the recycling
process. The deposit stream is particularly
Reduction of litter and ocean plastic successful at this component. For example,
leakage 100% of the glass that TOMRA processes
Beverage container litter as a proportion of from New York’s deposit return system goes
all litter is 66% less in regions with a DRS to the glass bottle manufacturing process.
than without.36 Regions with a meaningful
deposit value experience less beverage Climate benefits
container litter as a proportion of all litter Recycling materials enables manufacturers
compared to deposit systems with a low to replace the use of virgin material in the
deposit value or no deposit system.37 production of new goods. This avoids the
upstream environmental impacts associated
More material captured for recycling with virgin material extraction, transporta-
and “saved” from disposal tion and processing. According to a 2019
The European average collection rate for Ellen MacArthur Foundation study, recycling
PET plastic beverage containers recycling 1 ton of plastics could reduce emissions by
in a curbside system is 47%, versus 94% for 1.1-3.0 tons of CO2e* compared to producing
deposit return systems.38 In the US on the same ton of plastics from virgin fossil
average, 27% of aluminum, glass and feedstock.40
plastic non-deposit containers are collected
for recycling vs 72% of deposit containers.39 More material recycled in a closed loop
rather than “down-cycled”
Separate collection and processing of con-
* Carbon dioxide equivalent
17 Rewarding RecyclingHigh-performing deposit return systems: what can they deliver?
tainers in a DRS maintains the material’s programs for refillable beverage containers
quality. This results in more demand from in the world with a 41% refill quota, collecting
manufacturers, and a significantly higher 98% of refillable containers annually (25.4
market value than containers handled by billion containers) in addition to collecting
the “single-stream” recycling process (due 98% of one-way containers (20.5 billion
to contamination).41 containers). Oregon’s refillable beer program
started recently in part because the
Waste disposal cost savings infrastructure and cost-sharing between
Disposing of recyclable beverage containers producers was already in place through the
in landfills or incinerators incurs a cost either direct, indirect and induced jobs resulting non-refillable DRS.
through taxes or private waste services. from New York’s DRS was over 5,700.45
Placing a meaningful deposit on containers Creation of a local circular economy
has been shown to divert the majority of Enjoyment of local environment Regions that have DRSs are also likely to
deposit-bearing beverage containers from Sociology studies have shown that people spur the creation of local material proces-
disposal, which saves money and frees are willing to pay to live in areas without sors. A good example is New York, which is
capacity for processing more recyclables.42 litter. A Belgian study, for example, home to multiple processing facilities, two
calculated the willingness to pay for the PET plastic reclamation facilities, and two
Litter clean-up cost savings removal of beverage litter at the equivalent glass bottle manufacturers, all of which
There is a cost on municipalities, regional of US$33.28 per household per year, which depend on the deposit system’s reliable
governments and private property owners if applied across the EU and US would supply of clean, high-quality material.
for dealing with littered material, and a equate to US$11.6 billion (€9.8 billion).46 47
further, uncalculated environmental cost Access to recycling
when it escapes into the marine environ- Facilitate the transition to refillables High-performing deposit systems allow all
ment and food chain.43 DRSs are a mechanism that can facilitate households – regardless of demographic or
the adoption of a system for refillable (reus- income – equal access to recycling services.
Jobs able) beverage containers, which is known Increasing convenient access is a key com-
DRSs are a job creator in the sense that to have superior environmental benefits.48 ponent in increasing recycling. This benefit
they create market demand for collection, DRSs help shift consumer behavior to return has become even more apparent during
sorting, counting, processing and recycling containers and build out the infrastructure COVID-19-related shutdowns of material
services.44 In 2017, the calculated number of needed to make reuse possible. Germany, for recycling facilities that accept material from
example, operates one of the most successful curbside and drop-off collection streams.
18 Rewarding RecyclingHigh-performing deposit return systems: what can they deliver?
SNAPSHOT: HOW DEPOSIT RETURN
SYSTEMS HAVE ADAPTED IN THE
COVID-19 ERA
COVID-19 has affected deposit systems in two different ways.
Some systems continued on without real interruption by
implementing best practices in COVID-19 prevention, while
others experienced enforcement suspensions or, in two rare
cases, total shutdown.
For the deposit systems that faced redemption service
suspensions or shutdowns, regulatory authorities began to
resume normal redemption activity after the first wave of
coronavirus cases subsided and public health authorities
clarified that person-to-person transmission was more of a
concern than surfaces (including cans and bottles).49
While public health guidance varies from region to region,
some of the common best practices for beverage container
redemption to emerge in terms of COVID-19 prevention include:
• Requiring or recommending the wearing of masks
during returns
• Promoting social distance at all times through signage
and floor markings (6 feet / 1.5 meters)
• Limiting occupancy in redemption areas as necessary to
maintain social distance
• In redemption locations with multiple reverse vending
machines, turning off every other RVM as necessary to
maintain social distance, or installing plexiglass barriers
• Cleaning and disinfecting frequent touchpoints
• Prioritizing touchless, automated redemption rather than
manual in order to minimize person-to-person interaction
• Automatic printing of deposit receipts without the need to
touch buttons
This shows that with proper planning, deposit systems can
provide reliable access to recycling even in the face of a global
pandemic.
19 Rewarding RecyclingFigure 2:
How a high-performing deposit return
system works in practice
1 Producer pays deposit and
EPR fee, and sends data for
each container sold to CSA
Producer
Producers are aligned to design an effective system
to reach the legislated return-rate target. Producers
8 Material recycled
and converted
Recycling 2 Producer charges
price + deposit for finance the net costs of the system through an
Retailer
into new each container sold eco-modulated EPR fee.
packaging
Deposit +
EPR fee
Sales
data
3 Retailer charges
deposit upon
sale (regaining Consumers are incentivized to participate through
their deposit) a meaningful deposit value and broad scope of
beverage containers.
Central system
Recycled administrator Consumer
material sales Material
Container redemption is easy due to a compre-
7 CSA sells
material as
Revenue
hensive return-to-retail obligation, which provides
feedstock to D a convenient network of return locations.
recyclers ha epo
nd sit
ta lin +
da g
fe
rn R e
tu da ede
Re
d
i g
n
io e
at fe ta mp
tio
4 Consumer
returns beverage
ol in n
o ns unt container,
Consolidation & C co redeeming their Trust is built into the system’s processes through
counting center + Retailer system integrity measures, transparent management,
deposit
6 Consolidation,
counting and
a data-driven clearinghouse and reliable redemption
technology. The CSA uses unredeemed deposits and
validation of
Logistics material revenue to balance the system’s budget.
all manually-
returned
containers
Monetary flow
5 CSA arranges and pays for
transport of containers and Data flow
receives data
20 Rewarding RecyclingKey principles of high-performing deposit return systems
6. Key design principles and Figure 3:
elements of high-performing Principles of high-performing deposit return systems
deposit return systems PERFORMANCE PRODUCER RESPONSIBILITY
In reviewing the results of deposit return systems from around the
world and reflecting on over 45 years of TOMRA’s experience in the
field, TOMRA found that effective deposit systems are built around
four principles: Performance, Convenience, Producer Responsibility
and System Integrity.
This section explores these Principles, the Key Elements that A collection target for all beverages Producers finance and invest in
plus a meaningful deposit delivers the system using the unredeemed
deliver them in practice, and case studies that illustrate their strong results. deposits, commodity revenues, and
importance. an eco-modulated EPR fee.
All of the elements – when applied together – will address global CONVENIENCE SYSTEM INTEGRITY
waste challenges and advance a circular economy. Considering
some but not all could disrupt the system’s performance and cost
effectiveness. For example, legislation that centralizes responsibili-
ties under the beverage industry but does not explicitly require a
convenient redemption system (e.g. retailer obligation to offer
redemption) will underperform. Any system without a return-rate
target backed by enforcement has the risk that the system will not
reach the target without the producer and retail-funded central The redemption system is easy, Trust is built into the system’s
system administrator voluntarily taking action. accessible and fair for all users. processes through transparent
management, a data-driven
clearinghouse, and reliable
Note that policymakers should consider a region’s current recycling redemption technology.
context (e.g. infrastructure, historical learnings, etc) when it comes
to adopting significant system design measures.
21 Rewarding RecyclingKey principles of high-performing deposit return systems - Broad scope of beverages and containers
1. BROAD SCOPE OF BEVERAGES AND
#1
BEVERAGE CONTAINERS
Principle
To maximize capture rates, prevent consumer confusion and create a fair
playing field among producers, effective systems accommodate what’s sold
on the market today, and consider this in three ways:
a. Beverage type: Specified by using industry-identified categories
(i.e. bottled water, carbonated soft drinks, sport drinks, energy drinks, juice
and juice drinks, beer, hard cider, wine, spirits, plant-based beverages, and
non-dairy drinks). Legislation can empower the regulatory or managing
PERFORMANCE
body to ensure that new beverages placed on the market are added to the
program.
b. Material: Defines the packaging material to be included such as plastics,
metals, glass, and liquid paperboard. Policymakers typically prioritize
packaging commonly used by producers and recyclability.
A collection target c. Size: Using volume as the metric, ranges are often set at 100 ml up to
3 liters (or 4 ounces up to 101 ounces.) This range will capture 99% of the
for all beverages plus containers on the market – while allowing all deposit containers to be
a meaningful deposit automated through reverse vending machines.
However, local container shapes may require
delivers strong results. special consideration, so engagement with the
system operator and beverage industry is
recommended prior to codifying accepted sizes.
Local market beverage consumption patterns
should be considered when defining scope, to
ensure the DRS achieves maximum recycling
performance and avoids market distortions.
22 Rewarding RecyclingKey principles of high-performing deposit return systems - Broad scope of beverages and containers
SYSTEM SPOTLIGHT
The regions below all include broad yet well-defined specifications:
Oregon, USA Estonia Lithuania New South Wales,
Australia
Beverage 118 ml up to and including in Soft drinks, water, juice, juice Beer and beer cocktails, cider All beverages sized 150 ml
type 1.5 L (4-50 oz) concentrates, nectars, beer, and other fermented up to 3 L (5-101 oz).
Coffee/tea, energy and sports cider, perry, low-alcohol beverages, mixed alcoholic
drinks, fruit and vegetable juice beverages (up to 6% alcohol and non-alcoholic beverages, Excluded:
(does not have to be 100%), content). all types of water, juice and • Plain milk (or milk
juice smoothies, coconut water, nectars. Fruit wines and wine- substitutes)
non-alcoholic wine, hard cider product cocktails are included • 1 L (33 oz) or more of:
if 8.5% ABV or less, marijuana when sold in plastic and metal flavored milk, pure fruit/
beverages, protein shakes packaging. vegetable juice, wine and
(unless marketed as meal water casks
replacements), kombucha, • Wine and spirits in glass
cocktail mixers. Up to and containers
including 3 L (101 oz): Soda • Wine sachets of 250 ml
(carbonated/sparking (8.4 oz) or more
beverages), beer and malt • Cordials and concentrated
beverages, water, hard seltzer, fruit/vegetable juices
kombucha. • Registered health tonics
Up to and including 3 L
(101 oz): Soda (carbonated/
sparking beverages), beer and
malt beverages, water, hard
seltzer, kombucha.
Material Plastic, metal (aluminum/ Plastics, metal, glass. Plastic, metal, glass. Metal (aluminum/steel), glass,
type tinplate), glass. plastic (HDPE, PET), liquid
paperboard.
Size 118 ml to 3 L in some cases 100 ml up to 3 L (3-101 oz). 100 ml up to 3 L (3-101 oz). 150 ml up to 3 L (5-101 oz).
(4-101 oz).
23 Rewarding RecyclingSYSTEM SPOTLIGHT Key principles of high-performing deposit return systems - Minimum deposit value
2. MINIMUM DEPOSIT VALUE
• Michigan, USA: While the system
achieves the highest return rate in Providing a financial incentive to prevent The higher the deposit amount placed
North America (around 90%), it does not littering and promote recycling is what on a beverage container, the higher the
include modern beverage categories like separates deposit return systems from other collection rate.
bottled water.50 By contrast, when New York collection programs. The deposit motivates
expanded its DRS to include water alone in consumers to treat packaging as a resource, As Figure 4 illustrates, it is difficult to reach
2009, it doubled the amount of PET plastic rather than trash. Decades of redemption an 80% return rate or above with a deposit
containers captured by the system. Water data shows that meaningful deposit levels value at or below €0.05 (adjusted for
containers now make up about 25% of all effectively drive more containers out of the Purchasing Power Parity).
the containers that New Yorkers redeem for waste stream and into the recycling stream.
recycling.
Figure 4: Return rates compared to Purchasing
• Netherlands: Until recently, the Power Parity-adjusted deposit values - € (2018)52*
Netherlands’ DRS only included PET plastic
100%
bottles over 1 liter. This left out plastic Germany
Germany
Finland
containers under 1 liter and all aluminum Michigan
Lithuania Netherlands
Lithuania
90%
and glass containers. Of the approximately Iceland
Finland Croatia Estonia
Denmark Denmark
Iceland Estonia
900 million small plastic bottles sold every Sweden
Iceland Lithuania
year in the Netherlands, around 100 million 80%
South Australia
Israel
Oregon
are estimated to end up in the environment.
rate
Estonia
Iowa
As a result, in 2020, the Dutch government
Rate
70%
Return
New York
announced that a deposit on plastic
Return
Hawaii
containers smaller than 1 liter would carry 60%
Massachusetts
a €0.15 (US$0.17) deposit by July 2021,
which is expected to collect 90% of large 50% Connecticut
and small plastic deposit bottles.51 In
addition, the DRS will most likely add cans 40%
to the program in 2022. 0.000 0.025 0.050 0.075 0.100 0.125 0.150 0.175 0.200 0.225 0.250 0.275 0.300 0.325
Deposit Value (PPP Adjusted €)
Deposit value (PPP-adjusted €)
* Figure 4: Multiple country titles refer to instances where a DRS utilizes multiple deposit values depending on beverage type, material or size.
24 Rewarding RecyclingKey principles of high-performing deposit return systems - Minimum deposit value
High-performing systems set values by
considering the purchasing power of the Figure 5: Return rates and deposit values for the
Redemption Rates and Deposit Values for the World’s Highest Performing Deposit Return Systems (2019)
respective market, which takes into account world’s highest-performing deposit return systems (2019)*53
the relative strength of economies and
80% 82% 84% 86% 88% 90% 92% 94% 96% 98% 100%
differences in wealth. Based on a review of Germany
global return rates, a good principle appears €0.25 (US$0.30)
to be setting the deposit value high enough Netherlands
€0.25 (US$0.28)
to motivate consumers to return empty Finland €0.11-0.40
containers at a rate of 90%+, while low (US$0.11-0.45)
Denmark €0.13-0.40
enough to discourage fraud. While the (US$0.15-0.45)
definitive deposit amount will depend on Lithuania
the system’s collection infrastructure and €0.10 (US$0.11)
Palau
the government’s collection target, perfor- €0.08-(US$0.10)
mance metrics suggest that policymakers Norway* €0.18-0.27
(US$0.20-0.30)
consider a deposit of a minimum €0.10
Michigan
(PPP-adjusted) or $US0.10 to be effective at €0.08 (US$0.10)
this time. Croatia
€0.06 (US$0.60)
Estonia
When coupled with a performance target, €0.10 (US$0.11)
policymakers will set a minimum deposit Iceland
value(s) while empowering producers to €0.11 (US$0.12)
raise it if they choose. As discussed later * In 2011, Norway recovered 88.9% of containers by units, 89.4% by weight. The total recovery rate including volumes collected by central
sorting and recovered through waste to energy is above 95%. Latest data available shown for Germany, Netherlands and Palau (2018).
under Element #10, effective systems allow
producers to manage the day-to-day opera- value for all beverage types, materials and meaningful. Ultimately, the goal is to
*Norway also counts energy recovery/incineration within it’s redemption rate. A more accurate redemption rate would be 88%.
tions of the DRS including the deposit value. sizes. A flat deposit value is easiest for capture and recycle the highest number of
Producers may choose to voluntarily set a consumers and other parties to understand. containers.
higher deposit value if they seek to achieve In that case, a harmonized or flat deposit
a performance target, or if there are penal- value provides clarity in the system. While a meaningful deposit value is critical,
ties associated with underperformance. However, policymakers may choose to set high return rates also depend on a
higher deposit values on containers that are convenient network of redemption points to
Stakeholders may debate the use of a single larger and more expensive in order to ensure the deposit does not act as a tax.
or “flat” deposit value vs a variable deposit ensure the incentive to redeem remains
25 Rewarding RecyclingKey principles of high-performing deposit return systems - Minimum deposit value
SYSTEM SPOTLIGHT (€0.17) today.57 The deposit value was set by consumer. Inflation pressures may weaken
the legislature in statute, and requires the this, as will a consolidation or decline in the
• Germany: Germany has deposit systems legislature to amend it. As such, there is no number of redemption points. In addition,
for both refillable and one-way containers. mechanism to future-proof this key element “unredeemed deposits” may provide a
German law initially required beverage as performance declines. perverse incentive to prioritize income over
producers and retailers to sell an overall 72% performance.
of beverages in refillable containers (known
as a “reuse quota”). As the quota was not Setting a target for the return rate defines
met, a one-way DRS was implemented. To a common goal for producers, retailers and
ensure one-way containers do not overtake regulators. It aligns design, investment, data
refillables, policymakers set a high deposit management and encourages cooperation.
value, but allowed producers to set a higher It is also a way for producers to maintain
value if desired.54 With the world’s highest their “license to operate” to manage the
return rate, at 98%, producers have not seen program, with some flexibilities in setting
a need to increase the deposit value. fees and maintaining the unredeemed
Empowering the producers this way allows deposits to help finance the program.
for flexibility to manage the program to Taxes, delisting products or implementing a
achieve objectives. “trigger” to automatically raise the deposit
value are some of the ways used to ensure
• Connecticut, USA: On the opposite end a fair playing field for all brand owners and
of the spectrum is Connecticut with its 50% to raise the return rate. Penalties are set at
return rate, making it among the poorest a level to properly incentivize compliance.
performers. Containers carry a US$0.05 (For more see Key Element #12:
(€0.04) deposit value, which has not been 3. RETURN-RATE TARGET Government enforcement).
updated since the law was passed in 1978.55
In a survey, 27% of Connecticut residents Programs with return rates matching or
reported that the deposit is too low to exceeding 85% of the containers sold are Return rate =
justify redeeming; this compares to just 3% considered “high performers” (see Figure 5 deposit containers redeemed
in Michigan, where the deposit is US$0.10.56 for examples). This is achievable primarily
deposit containers sold
If Connecticut’s deposit value had kept pace through setting a meaningful deposit value
with inflation, the deposit would be US$0.19 and ensuring redemption is easy for the
26 Rewarding RecyclingKey principles of high-performing DRS – Return-rate target
SYSTEM SPOTLIGHT
• Massachusetts, USA: Massachusetts is implemented in 1983.58 Without a return-
an example of what happens when a rate target and penalties associated with
performance target is not in place. With underperformance, producers lack
a 2019 return rate of 50%, Massachusetts incentives to improve the system at scale. In
matches Connecticut for the lowest return addition, unredeemed deposits are diverted
rate in the world. With a deposit value of to the government, which may incentivize
US$0.05 (€0.04), the incentive to the
Figure regulatory
5: Container bodyTargets
Return-Rate to keep the return rate
participate has diminished since the law was low.
100
90
Figure 6: 80
Beverage container 70
return-rate targets (%) 60
50
40
30
20
* In 2022, Quebec will instate a staggered target of 75% 10
collection by 2025, 90% by 2030.
0
** The European Union set staggered goals of 77%
collection of plastic bottles by 2025, 90% by 2029.
Return-rate targets
27 Rewarding RecyclingKey principles of high-performing deposit return systems - Convenient redemption system for consumers
4. CONVENIENT REDEMPTION SYSTEM
#2
FOR CONSUMERS
Principle “Deposit return” is the moniker for a system made up of two distinct but
inseparable parts. While the deposit value engages the consumer, the return
rates also rely on a return system which is equally engaging. High-performing
programs make redemption easy for the original consumer by making it as
accessible as it was to purchase the product in the first place.
“Return to retail” refers to the aspect of the system where retailers who sell
beverages must take them back. Nine out of 10 of the world’s highest-
performing deposit return systems employ return-to-retail collection,
CONVENIENCE achieving an average return rate of 92%.59 In 2019 the average return rate for
return-to-retail deposit systems was 88% vs 77% in systems that do not
involve retailers.60 Retailers have been involved in container returns since at
least the early 1900s when the original refillable systems were common. As
one report on the history of packaging put it, “if an apothecary or merchant
provided goods in a bottle, there was typically an understanding that the
The redemption system is bottle belonged to its purveyor and was to be returned after use.”61 Today
retailers continue to share responsibility with producers for the end-of-life
easy, accessible and fair collection of deposit containers.
for all users. As a deposit is charged, a promise is made to
consumers that they will be able to recoup their
money. Producers, retailers and the government
have an obligation to make it so, otherwise they
run the risk of purporting an unauthorized tax
or eco-fee. Effective systems consider cost-
effectiveness in the design of a DRS – but also
the consumer’s experience and rights. Return-to
retail-systems deliver both.
28Key principles of high-performing deposit return systems - Convenient redemption system for consumers
Setting the redemption system up Measuring convenience
for success Although a metric for “convenience” does Other metrics used to evaluate convenience
High-performing systems do not allow not exist yet in statute, high-performing include the return rate and the percentage
design of collection point infrastructure and programs are effectively providing of consumers that participate in the system.
operations to be left to a central beverage consumers points to return their containers
industry-run administrator, due to conflicts in parallel with retailer density. Or, as data
of interest. Either redemption system design suggests below, a ratio of 1 point of return
is left to legislation – e.g. “return to retail”– for every 355 – 1,100 people. Due to higher
or to an independent network operator populations in urban areas, effective
tasked with delivering certain prerequisites, systems approach those localities
like a number of collection points per capita, differently. For example, the number of
effectively splitting the responsibility for collection points per square kilometer
system administration into two levels across Norway is 0.3, but in the capital
(see the New South Wales case study on Oslo it is 11.
pg. 55 for more).
Figure 7: Redemption points per person
System Norway Lithuania Germany Michigan California
* Displays 2018 return rate
Return rate (2019) 89% 92% 98%* 89% 60%**62 as 2019 data is not
available as of publication.
** 2020
Redemption 15,000 2,500 130,000 13,500 1,21963
locations
Population (2019) 5.33m 2.79m 83.02m 9.99m 39.51m
Redemption point 1 : 355 1 : 1,117 1 : 638 1 : 739 1 : 32,411
to consumer ratio
29 Rewarding RecyclingYou can also read
