Best Practices in Deposit Return Systems - TOMRA @ California Recycling Commission (Oct 2020)

California’s deposit-return program is dysfunctional. As part of their mission to make recycling policy recommendations, California’s Recycling Commission reached out to Jules Bailey of OBRC and me, Chuck Riegle at TOMRA, to share our working experience among high-performing programs. I’m sharing the slides from my presentation here in case others are on a similar path. We touch on why models like Oregon and Michigan achieve container return rates around 90%; how the private sector stakeholders can effectively centralize management; and the 4 design principles that high performing systems share in common.

Key topics: Circular economy, recycling, waste management, waste, plastic, plastic waste, deposit return systems, DRS, bottle bills, deposit return schemes, container deposit legislation, CDL, glass, glass recycling, cullet, aluminum, aluminum can recycling, best practices, extended producer responsibility, EPR, product stewardship, innovation.

Transcript

1. 1 Best Practices in Deposit Return Systems - California Recycling Commission Chuck Riegle SVP, Governmental Affairs TOMRA
2. TOMRA COLLECTION SOLUTIONS By returning empty containers to our RVMs, you automatically contribute into our cleanest loop system, reducing the need for new containers produced from new materials and keeping materials clean. TOMRA SORTING SOLUTIONS Our expert engineers in the field of recycling understand the complex nature of processing raw waste, and have developed solutions to achieve the highest possible recovery and purity rates, producing clean PET flake. THE WORLD’S MOST ADVANCED RECYCLING SYSTEMS.
3. 3 We operate and support deposit-return systems REVERSE VENDING RVM Technology at Retail & Redemption Centers RVM Service Clearinghouse: Product Registration / Data Admin / Fin. Transactions Material Pick-Up Material Processing Material Brokerage Material Recycling MATERIAL RECOVERY
4. TOMRA has four decades of experience in deposit markets ACTIVE IN EVERY MAJOR GLOBAL DEPOSIT MARKET NORWAY GERMANY MICHIGAN New York AUSTRALIA OREGON + 34 more markets 40 BILLION cans and bottles collected annually 82,000 Reverse Vending Machines installed globally $6.8 BILLION in deposits exchanged annually 4,200+ global employees
5. 5 What We’ve Learned: High-performing deposit return systems prioritize four principles CONVENIENCE PERFORMANCE PRODUCER RESPONSIBILITY SYSTEM INTEGRITY A recovery target for all beverages plus a meaningful deposit delivers strong results. The redemption system is easy, accessible and fair for all users. Producers finance and invest in the system using the unredeemed deposits and commodity revenues. Trust is built into the system through transparent management, a data-driven clearinghouse, and innovative technology.
6. 6 What is the difference between a centralized and decentralized deposit-return system? Decentralized Centralized VS. Centralized management of the DRS by a non-profit owned by beverage producers (and retailers) • Allows for synergies, efficiencies to reduce costs, contract services and reduce redundancy. • Streamlines decision-making when program improvements are necessary Individual brand owners are individually responsible for performing or contracting services with a contractor or even a system operator like TOMRA. • A viable option if industry competitors don’t see value in working together in every aspect of the value chain. • Allows producers flexibility to contract and/or provide their own logistics if preferred. • Addressing marketwide concerns can be challenging.
7. New York 7
8. New York’s Container Deposit Program 50% 1% 16% 31% New York State Redemption Locations (Estimate) Retail RVM Retail CLYNK Retail Manual Redemption Centers Redemption Rate 65% Deposit & Handling Fee 5₵ & 3.5₵ Source: “Deposit Reference Book”, TOMRA. 2018. REDEMPTION • Retailers + RVMs: 1,500 / 7,417 • Retailers Manual: 5,000 • Redemption Centers: 1200 • TNYR RCs: 80 PICK-UP & PROCESSING • TOMRA Metro, Parallel Products, 5 Boro, Arbor Recycling Inc., TOMRA New York Recycling, Western New York BICS, Star RECYCLING • UltrePET Plastics Reclamation • PQ- Plastics Reclamation END USERS • OI Glass Container Manufacturing Plant • Anchor Glass Container Manufacturing Containers Redeemed 8.9b / 16b sold
9. TNYR Distributors – Owners/Partners (Serving all Brand Owners)
10. How NY operators innovated within the deposit law 10 Cost and Carbon-Efficient Logistics Eliminated thousands of unnecessary truck trips per day by consolidating container pick-up under a single 3rd-party provider. One pick-up agent for the grocers and RCs. Automated Redemption Based on distributor relationships, co-operatives built the trust necessary for distributors to authorize product registration, the wide-scale use of reverse vending solutions and a deposit and fee clearinghouse. Brands are accounted, comingled, then compacted. This saved retailers time and resources, provided distributors with a digital ledger of transactions, fraud controls, and created dramatic transportations savings due to container compaction. FORMING DISTRIBUTOR COOPERATIVES ENABLED THE SCALING OF: TOMRA New York Recycling & TOMRA Western New York BICS
11. Michigan 11
12. Making Redemption Easy for Consumers 3rd party and non-3rd party locations TOMRA-serviced stores 3rd party and non-3rd party locations ll TOMRA-serviced stores open for redemption today
13. What happens to the containers? 13 The majority of used beverage containers, about 2.4 billion annually, are managed and processed by these three entities.
14. Picked up by 3rd Party Via UBCR 590 stores / 60% of volume Transported to Schupan facility in Wixom, MI for processing Distributor processes material on-site or transports loads for contract processing Picked up by Distributor 40% of vol. RETAILERS Containers are transported by distributors or contractors
15. Background on TOMRA’s Michigan business REDEMPTION MATERIAL RECOVERY • 12,500 retail locations all required to take- back containers. • 10₵ Deposit • No Handling Fee. 2,500 retailers equipped with 5,000+ RVMs capture 80% of the state’s containers 100 Participating distributors (UBCR) 590 Pick-up Locations (UBCR) ~2B Containers processed In 2019
16. 16 Both systems have delivered significant results 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% US Beverage Container Redemption Rates (2019) NY: 65% MI & OR: 90% +/- of deposit containers sold in MI over the past 40 years were collected for recycling 96% 1 Final Report of the Temporary State Commission on Returnable Beverage Containers , March 27, 1985, p. 62.
17. There are at least four technology-based solutions to managing cross-border redemption Barcodes State specific and “add- on” barcodes allow for a simple differentiation to sort out-of-state containers On-line RVM Network A network of internet- enabled RVMs enable remote monitoring of potential fraudulent behavior. Deposit Markings State-specific markings that enable the rejection of non- deposit containers. Security Ink State-specific and registered ink enables the rejection of non-deposit containers for an extra layer of security.
18. www.tomra.com 18
19. 19 More convenient More accountability More efficient The Centralized DRS Model: How it works