Monday, 15 May 2017

Refundable bottle deposits 2

Re last weeks Fun Online Poll, on the subject of refundable bottle deposits.

The Surfers Against Sewage website that promotes this, says the following:
The system would be largely self-funded through the small proportion of unclaimed deposits.

Evidence from existing systems shows that this is not entirely true, not too far off either, but so what - what's the point of a system that has to be used less than optimally to be funded?

Norway has had refundable bottle deposits for a long time, the reverse vending machines have been in shops since the 70s, and the current legislation/system is structured in quite a nifty way. From the outset, all drink bottles and cans are subject to a tax per bottle. After all, the most efficient and sensible way to pay for refuse treatment is for it to be pre-paid. There's no compulsion to join the deposit-refund scheme, and if producers find it's not worthwile, they don't. They can however join the scheme, through a member-owned organisation that handles the return and refund bit. The tax per bottle is then reduced in stages, until it's reduced to zero if 95% of more of the bottles are returned and handled.

The economics of this can be read from the 2015 annual reports of Infinitum, the cleverly named company reponsible for the scheme (in Norwegian).
Annual operating/admin costs before deposit refunds: 438 million NOK.
Net deposit income after refunds: 206 million NOK
Sale of materials: 124 million NOK
Net costs, of which most are paid by producers, and ultimately passed onto consumers, are around 108 million NOK.
This works out at around 1p per bottle/can that is run through the system, compared to the alternative tax which is slightly more than 30p.

For this you get the benefit of virtually no bottles and cans lying around or drifting off the coasts, and an easy source of pocket money for the kids. Both producers and consumers are left with the choice of partaking in the scheme / returning the containers or not, but enough people do so, and between 80-90% of bottles and cans are returned.

You can basically apply this principle to most products and materials, and the degree of intervention isn't very high except for the tax - importers/producers work out the particulars amongst themselves as long as the end-result is satisfactory.


Mark Wadsworth said...

Kj, sounds like a sensible system to me. We can argue the details, but it is not difficult to have a system which encourages reuse/recycling and reduces litter, which are the main aims.

Kj said...

The fancy word for this is extended producer responsibility, but basically it's just incentivising people, who on average are a bit lazy, to put things where they are not a nuisance. The end-results are usually predictable.
Go to Roskilde festival, where they have deposits on those plastic beer glasses, and observe how there are no plastic beer glasses around, and a healthy ecology of people who go around collecting the beer glasses from the people who can't be bothered (or too drunk) and are perfectly happy foregoing the deposit.

Sackerson said...

It worked perfectly well in Britain in the old days. Threepence a bottle, if I recall right.

Jonathan Bagley said...

There are two separate issues here: recycling glass and returning undamaged bottles for reuse, as is the custom in Germany. The reason half litre beer bottles are not reused in the UK, is because supermarkets will not display scuffed, reused bottles on their shelves.
Jonathan Bagley

Mark Wadsworth said...

JB, the system works with drinks bottles, it worked fine in the UK, it worked fine in Germany (until large non-German beer companies decided they would find it easier to break into the market if they had distinctive bottles and lobbied long and hard to be allowed to do it), it works in other countries.

For sure, the bottles were sometimes a bit scuffed, but nobody minded. On average a bottle did twenty round trips or something. Yay!

And B has already mentioned the distinction between recycling glass (the low value raw material) and bottles (much higher value), but it appears that even recycling glass makes economic sense.

Bayard said...

JB, I was told that the demise of returnable bottles was that the supermarkets didn't want the hassle of accounting for bottles being returned. With beer, cider and wine, returnable bottles lasted longer because the publicans dealt with the empties, which didn't usually leave the pub, and with milk the dairies owned the bottles and collected the empties, so it wasn't a hassle for them. Recycling is just an energy-heavy, supermarket-friendly alternative to reuse.

Mark, I can't see the problem with distinctive bottles, it just means that the bottles have to be returned to that particular brewery. AFAICR, this was the system in the UK with beer bottles, they weren't interchangeable between breweries.

Kj said...

Glass bottle recycling, with the transport and cleaning costs is apparently quite expensive and inefficient compared to just crushing and downcycling. So says the recycle folks anyway. The reverse vending machines don't take them anymore, only the PET bottles and aluminium cans, that can be compressed.

Mark Wadsworth said...

Kj, that is what nobody really knows. Is it better to re-use complete jars/bottles, or is it better to crush them and recycle the raw glass?

I think it must be the former, or else nobody would have done it. But I might well be wrong. Hmmm..?

Bayard said...

Mark, if you think about it, recycled glass can't really be much cheaper than new glass. The raw material costs pennies and getting it out of the ground isn't difficult and can easily be done in huge volumes. At the same time, it must be cheaper to wash and re-use than to use new bottles made from new glass, or the breweries wouldn't have re-used in the past. (The transport cost is a red herring, because presumably the same vehicle that delivers the full bottles picked up the empty ones.) So it seems very unlikely that the difference in cost between new bottles made with recycled glass and new bottles made from new glass is greater than the cost of washing the re-used bottles.

Mark Wadsworth said...

B, that's true, it's a three way equation:

a. Cost of carefully transporting used bottles.
b. Cost of simply crushing (easier to transport) and making bottles.
c. Cost of making new glass and making bottles.

I think the 'washing' part probably applies to all three, so rule that out.

As you say, the transport is no biggie, because full lorry goes to shop and comes back with empties.

Transporting crushed glass all to one smelter is probably cheaper than taking bottles back from shop to distribution centre and then re-distributing back to breweries.

But we still don't know the answer. Maybe there's bugger all in whatever you do.

Kj said...

Mark and Bayard: according to some articles I've read in Norwegian, with moaning about the end of deposits on glass bottles, the theme is this: glass bottles are a vanishing proportion of all drinks sales, therefore the breweries (especially the smaller ones) are less inclined to maintain systems for returns, washing etc.. Also, when we had glass bottle returns, they were standardised by agreement between the breweries, and these bottles were heavier than the glass bottles they used today, presumably by intention. They were less suscebtible to breakage, and were dark-green/brown, so that they could be reused without looking too scruffy - now they use more lighter-coloured glass because of consumer preference.
Anyway, the breweries pay a 30p tax on each bottle for not taking part in the return-deposit scheme, even though a well established infrastructure for doing so is there, so I have to assume it's more profitable even including paying for the externalities.