Introduction Res esea earch overview Resource Futures commissioned to complete a study to inform the upcoming Resources and Waste Strategy Consultation responses. The study focusses on the impact of a Deposit Return Scheme (DRS) on local authority (LA) collection systems. What I’ll cover today • Model overview • LA costs of collecting different packaging materials • Impact of DRS and EPR on costs (per Hh and by material) • Concentrations of aerosols in LA collection systems @resourcefutures
Model overview and scope • Kerbside collections (residual and dry recycling) • Urban and rural local authorities (England) • Six baseline models created (co-mingled, twin-stream and multi-stream) • Composition data < – > Placed on Market (POM) data • Both ‘on -the- go’ and ‘all - in’ DRS scenarios modelled • EPR applied to Baseline and DRS scenarios • Collection cost of litter, HWRC/bring banks, organics out of scope • Collection cost based on vehicles, staff, containers and disposal/treament • EPR: Impact of types of packaging entering the market @resourcefutures
EPR approach EPR payment to • Producers to pay full net cost local authorities recovery • Three components: Dry recycling ➢ Cost of providing a recycling Dry recycling sorting / collection service (minimum Residual collection treatment service requirements required) disposal cost (vehicles and (including per tonne of staff) cost per MRF gate fee) ➢ Recycling payment for the EPR packaging tonne of EPR cost per tonne collected packaging of EPR amount of packaging waste collected packaging collected and recycled collected ➢ Residual waste payment related to the cost of disposal Income received per tonne of EPR packaging netted off @resourcefutures
Scenario builder Enter deposit value and whether LA can redeem deposits of items in kerbside system Set proportion of deposits redeemed, assuming a ‘funding formula’ is unlikely to capture all potential unredeemed items User can select beverage containers included in DRS scope and capture rate for each @resourcefutures
Material value per tonne collected: plastics and metals Plastics: decrease in per tonne value in both DRS scenarios as PET and HDPE beverage containers are removed. Metals: decrease in per tonne value in both DRS scenarios as aluminium beverage cans removed. Most notable for all-in DRS where multi-pack aluminium cans are also captured.
Indicative material value per tonne collected: MRF
Urban collections: cost per Hh @resourcefutures
Urban cost per Hh – DRS only Co-mingled collection shows saving in Similarly to co-mingled collections, Multi-stream collection shows a each DRS scenario. Vehicle numbers twin stream collection shows MRF gate reduction in income received from dry remain the same, however, savings fees and residual disposal savings. A recycling as valuable material diverted made on MRF gate fees and residual small vehicle number reduction can be to DRS. However, vehicle numbers disposal. achieved in Scenario 2. required reduce balancing total cost. Co-mingled Twin-stream Multi-stream @resourcefutures
Urban cost per Hh – DRS with EPR (wit ithout deposits redeemed by LA) Co-mingled Twin-stream Multi-stream @resourcefutures
Urban cost per Hh – DRS with EPR (wit ith deposits redeemed by LA) Co-mingled Twin-stream Multi-stream @resourcefutures
Urban collections: cost per tonne by material @resourcefutures
Urban – metal cost per tonne Co-mingled Twin-stream Multi-stream @resourcefutures
Urban – plastic cost per tonne Co-mingled Twin-stream Multi-stream @resourcefutures
Urban – glass cost per tonne Co-mingled Twin-stream Multi-stream @resourcefutures
Concentration of aerosols in collection systems @resourcefutures
0.4% 0.5% 2.8% 3.0% 0.3% 0.4% 2.7% 0.6% 2.9% 4.3% 0.5% 0.7% 2.2% 3.9% 1.0% 1.1% 0.8% 2.8% 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Baseline On-the-go All-in DRS Baseline On-the-go All-in DRS Baseline On-the-go All-in DRS Baseline On-the-go All-in DRS Baseline On-the-go All-in DRS Baseline On-the-go All-in DRS DRS DRS DRS DRS DRS DRS Comingled - urban Twin-stream - urban Multi-stream - urban Comingled - rural Twin-stream - rural Multi-stream - rural Other recyclables (collected in same vehicle compartment as metals) Steel beverage cans Steel non-beverage cans Aluminium beverage cans Aluminium non-beverage cans Aluminium Foil Aerosols @resourcefutures
DRS varying capture rate sensitivity analysis @resourcefutures
Sensitivity analysis – varying DRS capture rate On-the-go DRS with EPR All-in DRS with EPR Baseline @resourcefutures
Summary • LA ‘basket value’ of plastics and metals decreases with DRS scenarios • DR DRS on only ly – collection costs in line with Baseline • Co-mingled + twin-stream: Disposal / treatment saving • Multi-stream: Material income loss balanced with potential for vehicle/staff saving • DR DRS with ith EPR – collection costs for DRS scenarios increase compared to Baseline with EPR • Ability to redeem deposits of DRS items collected at kerbside is significant to LAs • Analysis by material • EPR covers LA cost of packaging material outside DRS scope (minus residual collection) • DRS: impact of removing valuable beverage containers from the collection system @resourcefutures
Will French Senior Consultant will.french@resourcefutures.co.uk 07812 088 695 /resourcefutures @resourcefutures /resource-futures resourcefutures.co.uk | CREATE Centre, Smeaton Road, Bristol BS1 6XN
Following slides hidden, but can be used if required for Q&A resourcefutures.co.uk | CREATE Centre, Smeaton Road, Bristol BS1 6XN
Model structure @resourcefutures
Collection assumptions User can enter material cost / income for each scenario A number of assumptions are required on the proportion of beverage / non beverage containers based on Resource Futures composition estimates. These can be updated here if required @resourcefutures
What are the key proposals which will impact the metal packaging sector? Rick Hindley
Our obje jective: achieve & surpass the hig ighest metal packaging recycling rates in Europe
Proposed Targets
Compatibility £ Plastic Packaging DRS recycled EPR content tax High targets More collections End markets
Ext xtended Producer Responsibility Key Proposals: • Producers pick up full net cost of recycling and disposal (residual) of packaging – upwards of £600 million pa. • Cover costs of litter. • Single point of obligation or shared responsibility? • Remove de-minimus. • Modulated fees – recyclability and net cost of collection. • Reprocessor/Exporter compulsory reporting. • Governance models.
Cost Im Impact Annual cost of compliance 1997 - 2018 £200 Millions £180 £160 £140 £120 £100 £80 £60 £40 £20 £0 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Av
Cost Im Impact Predicted cost of recycling £700 Millions £600 £500 £400 £300 £200 £100 £0 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Av 2023
Full ll Net Cost Recovery ry • Collecting and transporting household and household-like packaging waste for recycling. • Sorting and treatment of household and household-like for recycling with income netted off. • Disposal of packaging waste in residual waste stream. £644m recycling • Communications to consumers. • Clean-up pf litter and fly-tipped packaging waste. £174/£197m residual • Collection and reporting of relevant data including litter and fly-tipping. • Compliance monitoring costs by regulator. £800m litter • System management and administration costs.
Consistency • Relates to ALL household waste inc. food and garden waste etc. • 2017 HH recycling rate 45.2% - EU target 50% by 2020. • EPR obligated producers (packaging) contribute to capital costs. • Designed to work in harmony with other proposals on waste. • Identifies a core set of materials and methods. • Proposals do not specifically reference foil and aerosols – must be included. • Target: • Zero food waste to landfill by 2030. • Recycle 65% of municipal waste by 2035. • Work toward zero avoidable waste by 2025.
EU Sin ingle Use Pla lastics Dir irective (S (SUP) Presented to preserve member States’ harmony, stops individual action, free market implications • Passed the EU Trialogue with large majorities. • Expected into EU Law by 28 th May 2019. • SUP Directive = “ lex specialis ” takes precedence over WFD & P&PWD. • Definition & scope; "Single Use Plastics”(SUP) - includes fishing gear & oxydegradables plastics. Key Articles: • Art2 – SUP Directive = “ lex specialis ” • Art4 – Ambitious & sustained reduction of SUP’s – 18 months from adoption. • Art6 – Tethered caps on PET bottles (not crowns) within 5 years from adoption. • PET bottles by 2025 > 25% recycled content (rules defined by 1/01/22). • PET bottles by 2030 > 30% recycled content (rules defined by 1/01/22). • Art7 – Labelling, clear + informative 2 years from adoption. • Art8 – Producers to cover costs of litter and collection (31/12/2024). • Art9 – Collected separately for recycling PET bottles 90% by 2029.
Pla lastic Tax • HM Treasury consultation. • Applicable to ALL plastic packaging – UK manufactured and empty imports. • Functioning as a main structural component of finished product. • Definition of Plastic Packaging set in legislation. • Tax point: convertor finished products & unfilled importers. • Ability to pass tax up the value chain • Retailer margin added. • Tax applicable to all plastic packaging containing <30% recycled content • Tiered option discussed. • Rate of tax; open to consultation. • Tax revenues go to HM Treasury not returned. • Proposed: in force from April 2022.
Scotland DRS Update ➢ Scheme design will be announced late April/early May with draft regulations in the summer ➢ PET and metal cans will be in scope, glass very likely but business case still being considered ➢ Scotland will implement before rest of UK, ambition remains early 2021 ➢ All beverage types except milk (and HDPE generally) likely in scope including alcohol and bottles sizes up to 3 litres depending on RVM capability ➢ Officials and ZWS will recommend to Minister that scheme administrator is industry-led not-for- profit…potentially with some stipulations around societal benefits ➢ Remain open to on-trade (closed-loop systems) exemptions where consumption takes place on the premises but to be agreed ➢ Only smallest retailers will be exempt from being return points to prevent accessibility issues for consumers ➢ Deposit amount 15p or 20p ➢ A huge amount of preparatory work to do and will need industry logistical and operational expertise to help deliver this incredibly ambitious timeline ➢ Next step is to develop a more detailed work programme across key operational and administrative areas with timelines ➢ Scotland DRS promoted as “cheaper” option than proposed (full net cost) EPR (material dependant)
DRS Consultation • Policy drivers: • Litter. • Increase recycling. • Quality of recyclate. • “All in” or “On the Go”. • Which materials? • Which formats? • Litter reduction is the main driver. • Justified through dis-amenity value. • Proposal that Treasury should get unredeemed deposits.
DRS Options All In: On the Go: • Scandinavian model. • Not done anywhere else. • PET, HDPE, can & glass – 22.8 billion units. • PET, HDPE, cans & glass – 7.9 billion units. • Assumed 85% return rate at £0.15 deposit. • Single serve “on the go” containers <750ml only – multi-packs excluded. • Net costs: • Assumed 85% return rate at £0.15 deposit. • 1YR: £845m YR 2-10 £641m p.a. • £535m unredeemed deposits EXCLUDED. • Net costs: • Producer fees 1YR £310m YR 2 -10 £107m. • 1YR: £429m YR 2-10 £265m p.a. • Material value £173m. • £177m unredeemed deposits EXCLUDED. • Producer fees 1YR £251m YR 2 -10 £87m. • 36,749 RVMs estimated. • Material value £173m. • Disamenity value £986m p.a. • 12,670 RVMs estimated. • Disamenity value £321m p.a.
Is Is DRS an Unstoppable Wave? • Needed to achieve single use plastics directive targets. • Fillers are now all supportive. • Retailer views mixed – but publicly supportive. • Local Authorities mixed – but favour EPR first then DRS if necessary to fill gaps, • Government is hugely influenced by the NGOs and the media.
Consultation Im Impacts
CREATING AN EFFECTIVE DRS SCHEME Marcel Arsand Sustainability Manager – UK and Nordics Ball Beverage Packaging Europe
CREATING AN EFFECTIVE DRS SCHEME What is the data telling you? 71
WHAT IS THE DATA TELLING YOU? 72
WHAT IS THE DATA TELLING YOU? 73
WHAT IS THE DATA TELLING YOU? The justification Combat damage on returning planes represented areas of the plane that could withstand damage (since the planes returned to base). Planes that were actually hit in the undamaged areas (engines and cockpit) suffered critical failure and didn’t return, and therefore were not in the sample analysed. 74
What is the data telling you? How are you interpreting it? 75
Creating an effective (and fair) DRS scheme 76
CREATING AN EFFECTIVE DRS SCHEME 1. Include a wide range of materials, formats and sizes 77
IT HAS TO COVER A WIDE RANGE OF MATERIALS, FORMATS AND SIZES
IT HAS TO COVER A WIDE RANGE OF MATERIALS, FORMATS AND SIZES Aluminium cans 8x Clear PET bottles
IT HAS TO COVER A WIDE RANGE OF MATERIALS, FORMATS AND SIZES If it is not included in a DRS, it should be properly included in an EPR, taking into account the value of the material and real recyclability
CREATING AN EFFECTIVE DRS SCHEME 2a. Include varying deposit fees depending on size 81
VARYING DEPOSIT FEES DEPENDING ON SIZE Example: Finland 82
VARYING DEPOSIT FEES DEPENDING ON SIZE Example: Finland Norway Sweden Denmark California (US) Maine (US) Alberta (Canada) British Columbia (Canada) etc. 83
2b. The value of the deposit shouldn’t create market distortion 84
VALUE OF THE DEPOSIT SHOULDN’T CREATE MARKET DISTORTION £8.00 (33p/can) = 7.92 L £6.00 (£1.5/bottle) = 8.0 L + e.g. 10p deposit x24 = £2.40 + e.g. 10p deposit x4 = 40p = £10.40 total = £6.40 total ↑ 30% per unit ↑ 6.5% per unit Note : Multipack cans represent circa 80% of the beverage market in the UK (Nielsen. 2017)
VALUE OF THE DEPOSIT SHOULDN’T CREATE MARKET DISTORTION £8.00 (33p/can) = 7.92 L £6.00 (£1.5/bottle) = 8.0 L + e.g. 15p deposit x24 = £3.60 + e.g. 15p deposit x4 = 60p = £11.60 total = £6.60 total ↑ 45% per unit ↑ 10% per unit Note : Multipack cans represent circa 80% of the beverage market in the UK (Nielsen. 2017)
VALUE OF THE DEPOSIT SHOULDN’T CREATE MARKET DISTORTION £8.00 (33p/can) → 7.9L £6.00 → (£1.5 bottle) → 8.0L NEW SOUTH WALES* + e.g. 10p/unit x24 = £2.40 + e.g.10p/unit x4 = 40p = £10.40 total = £6.4 total (£4 cheaper) large PET sales ↑3% ↑ 30% per unit ↑ 6% per unit multipack cans sales ↓13% UNITED KINGDON** Survey: almost 25% of can consumers would switch to large PET assuming a 10p fixed deposit Source: *CCEP // **UK survey commissioned by Alupro and conducted by ICARO (2018)
4. It should promote recyclability by design with clear guidelines and modulated fees 88
DESIGN FOR RECYCLING IS KEY 89
DESIGN FOR RECYCLING IS KEY What is the real recyclability of: PET with silicone valve? PET with full body sleeve? Opaque PET? Flexible pouches? Black plastic bottles? Multilayer carton? 90
PROMOTE RECYCLABILITY BY DESIGN AND MODULATED FEES 91
PROMOTE RECYCLABILITY BY DESIGN AND MODULATED FEES Polluter pay principle! Each material to cover its full net cost without cross subsidy. 92
5. It has to be easy and convenient for consumers 93
IT HAS TO BE EASY AND CONVENIENT FOR CONSUMERS 94
IT HAS TO BE EASY AND CONVENIENT FOR CONSUMERS
IT HAS TO BE EASY AND CONVENIENT FOR CONSUMERS
IT HAS TO BE EASY AND CONVENIENT FOR CONSUMERS
IT HAS TO BE EASY AND CONVENIENT FOR CONSUMERS ON THE GO ONLINE RETAIL All selling points London underground UK grocery shopping should be able to accept and pay the 5M people = 20% deposit per day
6. Unredeemed value has to be kept in the system 99
WHEN UNREDEEMED DEPOSIT IS KEPT BY THE GOVERNMENT Connecticut Massachusetts New York Population: 3.5M Population: 7M Population: 19M DRS since 1980 DRS since 1983 DRS since 1983 (Gov keep 80%) return rate return rate return rate 57% 66% 50% What is the incentive to increase these recycling rates? 100
But is DRS the most cost effective way of increasing recycling rates? 101
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