Beverage Container Deposits

Last Updated on Tuesday, 10 April 2012 08:28

A final decision is expected on the introduction of container deposits in 2012. This is the culmination of many years of campaigning by environment groups and local government. Australia's environment ministers have decided to release a 'regulatory impact statement' into a CD system - this is the last big step before a national decision which could take place in 2011.

This briefing dispels the myths propagated by the beverage and packaging industries against deposits on containers and explains its use in tackling the scourge of packaging litter; financially underpinning a new generation of recycling infrastructure (at no cost to local or state government) and reversing flagging recycling rates.

Changed societal trends - kerbside recycling and away from home consumption
Kerbside recycling has been a major success with high levels of community engagement and awareness. It costs local government over $300M p.a. Local government supports the introduction of CD because it enhances the kerbside system through removal of contamination (for example glass fragments in paper and organics); and generation of additional revenue to support kerbside. Recent government reports estimate a $75m per year boost.

However, kerbside collections do not deal with ‘away from home’ consumption of packaging, which unlike twenty years ago – now accounts for up to 50% of packaging waste. CD offers the essential incentive for the community and business.

A new 2nd tier of recycling centres

A CD system will finance the next generation of recycling infrastructure such as ‘drive through’ recycling centres and reverse vending machines (RVM’s). Such a system is increasingly needed because a range of new products such as e-waste and batteries contaminate and increase the cost of kerbside collections. Indications are that the private sector will build 400+ large scale recycling depots and 1,600 convenience collection points.

Costs of CDL
In the case of kerbside it is local government and rate payers who fund the system. With container deposits it is brand owners and consumers (mainly those who don't return the containers as their deposit is used). A well designed CDL system (as is the case in Canada and the US) operates at a surplus helping subsidise kerbside and market development programs. Issues such as not sorting containers by brand, automated rather then manual collection and return to depot rather then return to retail models all serve to drive these economic efficiencies. Even South Australia’s system, which features some design inefficiencies, operates at around $120 a tonne compared to kerbside which operates at $300 a tonne.

The recent report (BDA et al 2009) received by environment ministers estimated the financial cost on consumers per container to be less than half a cent.

Opponents suggest CDL’s ‘expansion has almost halted since the mid 1990s’
This is incorrect, as evidenced by the following:

Year Country/State
2005 Hawaii, Estonia
2004 Germany
2002 Denmark
2001 Israel
1999 Norway
1997 Newfoundland
1996 Finland, Nova Scotia

and the Northern Territory will join South Australia in 2010. Tasmania has also received a positive report on CD and is considering its next move.

The negative ‘impact on kerbside economics’
This myth has been extensively propagated. However, local government supports CD. CDL systems have been introduced for the main purpose of reducing kerbside costs, and there are many examples of deposit systems working in parallel with kerbside (not least South Australia).

By far the most comprehensive international study and the only study with the joint support of all parties – i.e. beverage and packaging industries plus recycling industry and NGOs - is the so-called “BEAR report” (Beck et al 2002). This US study found deposit systems were both the most effective in reaching high levels of recovery and the most cost-effective on a per unit or per tonne basis. And the most recent Australian study found local government would benefit financially by $75m each year.

Other benefits
The scheme will create between 1 – 2,000 new jobs; provide recycling services to around 350,000 rural and remote homes for the first time; and recover over 600,000 tonnes of new material saving ‐ 1.3million tonnes of co2‐e pa.; 8.1gigalitres of water a year; reduce the amount of litter by around ‐15‐20%.

More information

CD Benefits and Costs [2008, 870KB]

Additional background material can be found at www.boomerangalliance.org.au, the coalition of environment groups of which TEC is a leading member.