A whole lotta bottle

Written by: Maxine Perella | Published:

A UK-wide deposit return scheme for drinks containers divides opinion, largely around its cost-effectiveness and the repercussions for local authorities, producers, retailers and consumers themselves, not to mention the suggestion that the environmental cost of maintaining such a system would actually outweigh the benefits. By Maxine Perella.

Has the UK got the bottle to introduce a national deposit return scheme (DRS) for drinks containers?

It’s a question many may well be asking, given the level of controversy surrounding this issue. Fierce arguments exist either side of the debate – those in favour of a DRS say such schemes will increase recycling rates (while producing a cleaner material stream) and reduce littering. Those against maintain a DRS is both costly to implement and run and, to some extent, is unnecessary.

If a national DRS is introduced, it’s pretty likely that there will be winners and losers. The Scottish Government must be mindful of this – over the past few years it has been actively consulting on implementing a DRS north of the border, tasking Zero Waste Scotland (ZWS) with commissioning a feasibility study, followed by a call for evidence on how such a scheme might work in practice. In a significant move, Scottish environment secretary Richard Lochhead announced in January that further consultation was needed before reaching a decision.

Further research

“As a result of the input of respondents to the call for evidence, the Scottish Government has asked us to carry out further research on a range of aspects relating to a potential scheme – for example, the impact on pricing, assessing any potential hygiene issues, and impacts on kerbside recycling collections,” says Iain Gulland, CEO of ZWS. “We will carry out this research and report back to the Scottish Government in due course.”

The call for evidence – which drew 63 responses – came on the back of a feasibility study undertaken by Eunomia Consulting, A Scottish Deposit Refund System, which was published in May 2015.

The report calculated that the one-off cost of setting up a DRS in Scotland would be around £15 million, with additional estimated annual system costs such as machine takeback (£29 million), manual takeback (£8 million), logistics (£20 million), counting centres (£3 million) and admin (£3 million).

The study pointed out that this operational expenditure would be offset by annual income derived from sale of material collected through the system, estimated between £20 million and £22 million, unredeemed deposits (a direct cost to the consumer) estimated between £24 million and £36 million, and revenue from producer fees estimated between £6 million and £17 million.

Further modelling work suggested annual net savings would result from reduced local authority collection and disposal costs; £5 million at the kerbside, £1 million at household waste and recycling centres, and £7 million from direct littering.

The opposition

The cost-effectiveness of a DRS continues to be the subject of much scrutiny, particularly by those opposed to such schemes. Packaging Recycling Group Scotland (PRGS) – a group representing packaging producers, recyclers, trade bodies and drinks brands – is one of the most vocal opponents and has submitted its own evidence rejecting the Scottish Government’s proposals.

According to PRGS, issues that have not been fully considered in the consultation process are the growth in online shopping and home deliveries, high support for local authority kerbside recycling, the carbon impact of additional transportation, loss of trading space to install recycling points, and the ultimate hit on the consumer wallet. “As it stands, it places extra burdens on consumers who will need to factor in extra trips and planning to claim refunds, and extra burdens on retailers to fit machines and operate a system,” says PRGS spokesperson Jane Bickerstaffe.

Recoup is a supporter of the PRGS and fed into ZWS’s call for evidence on DRS. Recoup CEO Stuart Foster says while his company fully supports the Scottish Government and ZWS in its desire to improve the current situation around recycling and litter, he feels a more balanced approach is required in terms of evidence gathering.

“The information and discussions so far on DRS … omit a number of key issues and limitations. The report appears to be selective and does not assess countries that have carried out impact assessments of DRS and rejected it, or given due consideration of issues raised in countries that are operating a DRS scheme,” he argues. “If more work is undertaken, it would have to investigate the range of information and evidence that was submitted as part of the consultation on DRS to ensure a balanced and fact-driven outcome.”

Foster feels the current DRS debate is taking much-needed resource and finances away from tangible activities that could have an immediate impact on recycling and anti-litter activities. “Realistic performance levels from DRS would be matched at a fraction of the cost in Scotland by improving, expanding and harmonising existing collection systems across the 32 Scottish local authority areas, and ensuring effective consumer communications and behaviour change initiatives are in place.”

He points out that these are key elements of the Scottish Household Recycling Charter. “The strengthening and co-ordinated support of the current kerbside recycling system still has much unrealised potential. This will also deliver higher overall household recycling levels for packaging formats and materials which are outside the scope of DRS.”

Simon Gandy, principal consultant at Ricardo Energy & Environment, says he has scrutinised a fair amount of DRS modelling work and believes the costings need further debate. “Few people dispute that a DRS would increase recycling – though most of it would be cannibalised from local authority collections. Most agree it would also reduce littering – though, again, much would be cannibalised from existing general waste

bins. Cost-effectiveness is therefore the key factor, and while this may have been investigated at some length, it has been poorly reported and debated.”

Given that a significant amount of material could be taken out of the kerbside stream if a DRS was introduced, Gandy feels the repercussions for local authorities could be huge. “We can imagine councils needing to roll out smaller bins, changing their collection vehicles, reducing collection frequencies and laying off bin men, to the extent that contracts allowed. Minimum tonnage contracts with MRFs could be breached.

“The revenues the councils would receive for their collection services would greatly decrease, yet they would still have to collect the costly residual waste.”

What about ‘polluter pays’?

Some argue that over time reduced collections and logistics would actually deliver efficiencies and cost savings for local authorities – particularly if these services are operated in-house. Scaling back local clean-up activities, due to less litter, could also claw back much-needed cash from council budgets.

Chris Sherrington, principal consultant at Eunomia, feels the DRS debate has lost sight of the fundamental rationale behind such an intervention: the ‘polluter pays’ principle. “The debate has been on how much it costs, and further understanding is always welcome to inform a decision on that. But what seems to be missing is who pays? At the moment we’ve got a system where … everyone pays a flat rate for the collection system. The polluter doesn’t pay in terms of the littering side, which they would have to do under a deposit scheme.” According to a 2014 report from the European Commission, ‘Development of Guidance on Extended Producer Responsibility’, UK producer fees are estimated to cover only 10% of system costs – most of the cost burden associated with collecting and recycling materials falls on local authorities.

“We need to step back from this argument of local authorities will lose revenue. Shouldn’t producers be paying a much greater cost of collection? Changing the focus there would be a really helpful thing to do,” Sherrington maintains.

Meanwhile there are several ground-level challenges to consider in terms of managing such schemes.

“There is a big problem with making producers label their products, because this is effectively forcing the creation of a new discrete SKU (stock-keeping unit) for every product sold in Scotland,” observes Gandy.

“However, for me the biggest issue is the takeback logistics. We drive collection lorries past nearly every home in the country to collect waste, and that will have to continue for the packaging and other recyclates not included in the DRS. But now we need another fleet of vehicles to pass every shop in the country and separately collect the very same materials. I cannot see how that can be good for the environment.”

Chain co-ordination

While backhauling may be an option here, it would need supply chain co-ordination. Gandy feels such resource and effort would be better channelled into other measures such as enhancing existing kerbside collections, installing on-the-go recycling infrastructure, setting separate PRN (packaging recovery note) targets for different packaging types and imposing limits on residual waste levels.

It remains to be seen whether Scotland will be bold enough to push ahead with a national DRS, but as far as interventions go, Sherrington maintains it is still one of the most effective. “While you possess this item, it has an incentive built into it to be returned for high quality recycling and not littered. It may not work in every single case, but it’s going to move the needle further. I can’t see what other mechanism would influence people in that same way.”

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