Banner: Exploring Producer Responsibility
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Beverage Producer Responsibility Forum:
Exploring Ways to Improve
Beverage Container Recycling in Minnesota

April 28, 2003

Summary of Presentations

Minnesota has a rich political history surrounding efforts to create traditional beverage container redemption systems like those of Iowa and Michigan. While efforts to pass legislation on this issue have not been successful in the past, improving beverage container recovery is a recurring policy issue.

This forum, hosted by the GrassRoots Recycling Network, was dedicated to exploring ways to improve Minnesota’s beverage container recycling. The presenters examined the current state of beverage container recycling in the Minnesota, outlined the nuts and bolts of producer responsibility, presented vital information from new research on beverage container recovery systems, and explained how the alternative California and Alberta redemption systems operate.

Minnesota’s Perspective on Beverage Container Recovery and Product Stewardship
Garth Hickle, Product Stewardship Team Leader, Minnesota Office of Environmental Assistance. [back]

The Minnesota perspective of the proper way to manage waste is a principle called product stewardship, where producers, consumers, and government share the responsibility of managing waste. Minnesota is pursuing product stewardship initiatives currently with CRT-containing electronics, paint, carpet, and mercury-containing products. Minnesota is also part of an initiative involving other states and industry to develop a national solution to the problem of beverage container waste.

The issue of beverage container waste has been a recurring one throughout Minnesota. A current look at beverage container recycling rates shows a 32% recycling rate for containers in 2001. This is down from the 38% recycling rate MN achieved in 1995. While glass and aluminum containers were both recycled at a rate of 39% in 2001, plastic beverage containers, which have increased in use by 60% since 1995, are only being recycled 10% of the time. Meanwhile there is a proposal by the governor to cut the SCORE funds, those that help run recycling programs, by 4 million dollars in 2004.

From the Minnesota perspective, beverage container recycling rates are of concern. Plastic beverage containers, while having the lowest recycling rate, dominate sales growth in the state. Meanwhile, existing municipal infrastructures are limited in their ability to capture beverage containers increasingly consumed ‘away from home’. In the Minnesota perspective, the best way to move forward is to examine multiple policies and programs, engage industry leaders, look for ways to link into other existing programs, and pursue product stewardship or other new approaches to solve this problem.

Beverage Producer Responsibility: Overview, Current Application, Recent Research
David Wood, Co-Director, GrassRoots Recycling Network [back]

In exploring beverage producer responsibility it is important to understand just what is meant by the phrase. Extended Producer Responsibility (“EPR”) is the idea that producers are financially responsible for the entire life-cycle impacts of the products they put on the market. EPR is more than “take back”. It shifts end of life management costs off of taxpayers and on to producers/brand owners. EPR drives design improvements,
requires a robust (ideally localized) recycling infrastructure, and requires individual (producer) instead of collective (tax-payer/government) responsibility.

Extended producer responsibility is utilized in different ways all around the world. In Maine, producers are responsible for the end of life management of mercury containing vehicles. In Germany, through a system called Green Dot, producers are responsible for all packaging waste. In Europe all automobile and electronics manufacturers are responsible for the end of life management of their products. Many other types of regulations exist where EPR principles are embraced, including: advanced recovery fee programs, product stewardship, extended product responsibility, and producer take back- as seen with traditional bottle bills, the California redemption system, and various Canadian redemption systems.

Recent research has been conducted in regards to the effectiveness of beverage producer responsibility to deal with beverage container waste. In 1999, a newly formed group called Businesses and Environmentalists Allied for Recycling (BEAR), which included Coca-Cola North America, Waste Management, MOEA, plastics manufacturers, environmentalists, and NGOs, came together to conduct the Multi-Stakeholder Recovery Project (MSRP). The report examined trends in beverage container generation and recovery, benefits of recycling beverage containers, costs, and the effectiveness of beverage container recovery systems.

The key findings of the MSRP report are as follows:

  • Recycling rates for all containers are flat, at best.
  • New containers and designs compromise effective recycling.
  • Deposit systems result in the highest level of recovery; curbside is second.
  • Beverage container recovery has a net cost that must be covered by some type of funding.
  • Deposit systems have the highest gross cost/container; curbside 2nd.
  • Unredeemed deposits – money left in the system – significantly reduce system costs and may result in net revenue.
  • Recycling beverage containers yields significant environmental and economic benefits.

In looking at trends in the beverage container industry, PET plastic is increasingly used for beverage containers. Meanwhile, there is an increasing range of beverage types and PET design innovations on the market that trend towards single serve, away from home consumption. These typically do not reach curbside bins. Meanwhile municipal recycling infrastructure growth continues to stall.

As Minnesota looks ahead and begins to think about how to improve beverage container recovery rates, the results of the MSRP report, producer responsibility policy, the future role of tax dollars in recycling, and factors influencing future recovery rates and economics should all be considered.

The California Redemption System
Darryl Young, Director, California Department of Conservation [back]

The California bottle redemption system came into being with Assembly Bill 2020 (1986) that was passed to "encourage increased, and more convenient, beverage container redemption opportunities." The California Redemption Value, or CRV, is the basis of California’s container recovery program. The California Redemption Value (CRV)
begins with beverage distributor “redemption payments” into the state recycling fund. These payments are based on the number of containers sold. The state recycling fund then pays CRV deposits to recyclers. In the consumer experience, consumers pay the CRV to the store when they buy a beverage at rates of 2.5 cents on smaller containers, and 5 cents on larger ones. Consumers then redeem their deposits from recycling centers, called Convenience Zone Recyclers (not retail stores).

Beverage containers included in the program are sodas, beer, water, coffee, tea, juices, sports drinks, etc. Currently milk, wine, and drinks not specifically listed in the program are exempt. When consumers do not redeem their bottles, the uncollected deposits go into a state fund that is used for state administration, grants, curbside program supplements, processing fee offsets, education, the deposit program, research, and social marketing of the redemption program.

California’s unique system mandates that the state manages the fund while the private sector manages the materials. Other unique aspect include: 250 state employees administering the program, state certification of recyclers and processors, the option for curbside programs to participate via a “commingled rate”, processing fees and payments made by producers, and glass bottle minimum-content requirements.

While the California redemption achieves great success there are several issues that have emerged as challenges that need to be addressed. Briefly listed, they are: producer payment amounts and offsets to processing fees; market development for plastics; effects of contamination of recovered feed stocks; incentives for market expansion; minimum-content for glass bottles and fiberglass (supply and technology issues); assistance to manufacturers; unredeemed deposits: surplus building - money “loaned” to solve state deficit; single-stream collection and contamination; and continuous education of consumers and participants.

Despite the outstanding issues outlined above, the California redemption system achieves an overall beverage container recovery rate of 62%. A recent UC study showed that with curbside only, the state’s recycling rate would be 31%. (Curbside programs receive $35-40 million a year under CA program.) It also shows that the expansion of containers included in the program increased recycling rates for HDPE (18% to 38%) and PET (12% to 17%). Furthermore, California is able to achieve these rates at a comparatively low cost; Oregon’s deposit system is six times more costly. The report recommends doubling the deposit to increase the recovery rate to 82%.

The Alberta Bottle Depot Association: Representing an Industry
Jeff Linton, Executive Director, Alberta Bottle Depot Association [back]

The creation of Alberta’s bottle redemption system was partially a result of answering three important questions: Why beverage containers? Why deposits? Why not deposits?
Alberta has targeted beverage containers, because while they represent only 2% of landfill mass by weight, they represent 8% of landfill mass by volume and 14% of the latent energy buried in a landfill. A deposit style program was chosen, because other attempts to recover materials without using a deposit, such as recovery programs for milk containers, oil and oil filters, have not been very successful. Finally, in examining the classic arguments for why not to have deposits (retailers don’t want to subsidize, consumers don’t want the hassle, municipal recyclers “need the revenue”, or manufacturers don’t want the costs) it was discovered that most of these arguments were either myths or easily solvable concerns.

Thus, the Alberta redemption system was created. The history of Alberta’s Beverage Container Recycling Regulation (BCRR) began initially as a litter control act, then as a
waste minimization tool, and then as a waste management tool. The regulation was last updated in 1997.

Under the current regulation, government has delegated the task of administering the program to oversee the registration of all beverage containers (except milk) that contain ready-to-serve drinks and a deposit-refund program for the collection and recycling of beverage containers sold in the province. The program is industry funded and industry managed.

When a consumer buys a beverage container, they pay a deposit (5 cents for small, 20 for big, 10 cents for beer) and a container recycling fee (CRF), which is dependent on the size and material of the container. The consumer then redeems their bottle at a registered depot, but only receives back the deposit, not the CRF. This way, the costs of recovering and recycling containers is at no costs to the manufacturer.

This system creates the following costs: handling fees paid to depots, transportation, provisioning, processing, and administration. Meanwhile this system has the following revenues: scrap material, unredeemed deposits, and container recycling fees (which are used to balance the scale).

Not only does this system effectively capture beverage containers, it creates 1600 jobs, 200 rehab jobs, and creates 214 depots, with a $75 million total infrastructure/tax base.
Other key features include an 82% recovery rate at no cost to manufacturers or taxpayers. There is no return to retail or brand sorting, resulting in a net system cost of about 1 cent per container.

In conclusion, history tells us that grocers, bottlers, and municipal recyclers don’t like bottle bills, and that consumers love them… Why? They don’t understand them!

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