A penny for your thoughts - and your containers

In August, the Council of Australian Governments will consider the proposed national container deposit scheme (CDS). The scheme, which would involve consumers paying a 10-cent deposit on beverage containers and claiming it back at recycling depots, has attracted a large amount of support from environmental groups - and opposition from the beverages industry. As the national CDS gains further public and political interest, Sustainability Matters takes a look at both sides of the argument so far.

A national container deposit scheme (CDS) scheme could potentially generate a large amount of funds to support recycling initiatives. According to Jeff Angel, National Convenor of the Boomerang Alliance and Executive Director of Total Environment Centre, the scheme will generate $1.78 billion in the first five years, derived from unredeemed deposits, which will be used to support recycling, litter education, the costs of the CDS and more. But Jenny Pickles, General Manager of the Packaging Stewardship Forum, Australian Food and Grocery Council (AFGC), has stated that the scheme is 28 times more expensive than an industry-funded option which would deliver similar recycling rates.

Pickles claims that on top of the 10-cent deposit, consumers will have to pay a handling fee of up to another 10 cents, but only get the deposit back. She says people will only get this money back if they go to a collection depot as opposed to using their home recycling bin: “But then they’ll pay in their time and extra petrol in their cars!” She added that the scheme “may threaten the viability of our household kerbside recycling services, making families pay more through their local council rates”. It has also been suggested that the scheme will negatively affect companies, with Coca-Cola believing the price increase will lead to a reduction in sales, and CEO of the Australian Beverages Council, Geoff Parker, saying small businesses will also be hurt.

But those in favour of the scheme claim the handling fee will be minuscule, with Regulatory Impact Statement (RIS) data showing an impact of one tenth of a cent per container by 2020 on top of the deposit. According to the Total Environment Centre, the fees to run the scheme will be paid for by brand owners and those consumers who don’t refund their deposit. As for the cost to councils, the Boomerang Alliance says, “The RIS again proves that kerbside collections are not disadvantaged and councils and ratepayers will financially benefit - to the order of about $2 billion over 20 years - from reduced litter, transport and landfill costs. They also obtain the deposits from containers still in kerbside (RIS estimates about 8% of containers).”

State schemes currently operating

The South Australian CDS has been operating since 1977, and on 3 January 2012 the Northern Territory started its own scheme. But the AFGC has cited large price differences between the costs of beverages in Western Australia and the NT, with a $2 difference between a 15-pack of Coke cans sold at Coles, and a $3 difference in 24-packs of Coke and Becks beer sold in Woolworths. The former CEO of the AFGC, Kate Carnell, has further stated that the NT scheme does not cater for the almost 50% of its population living in rural areas, with only 17 depots operating, most in metropolitan areas. Carnell claims this is also a problem with the South Australian scheme, as it “doesn’t operate in a number of remote communities in the state”. The AFGC further claims that the SA deposit scheme does not work well, citing NSW Government analysis which says SA has more beverage litter per head of population than NSW, Victoria and Queensland, and even higher non-beverage litter.

But the Total Environment Centre claims that a national CDS would cater to remote areas, providing recycling services to 350,000 rural and remote homes for the first time. And while Angel admits the inefficiency of the NT scheme, he claims that this is proof of the need for a national, more cost-effective scheme. The founder and Chairman of Clean Up Australia, Ian Kiernan AO, says the reason the NT figures are so high is because they are what AFGC members are choosing to charge. Indeed, Angel says that beverage companies are “profiteering” from the price rises.

“... analysis of the Cash for Containers Quarterly report just issued by the NT Government and based on industry returns shows that while beverage companies are passing on the full value of both the deposit and an 8 cent per container handling fee for every container sold - they are not paying out on 100% of containers. The unredeemed deposits and unused handling fees can and should be paying for all the scheme costs, meaning there should be no handling fee price rise,” Angel said.

Angel noted that although companies are allowed to keep the unredeemed deposits under the South Australian scheme, “they didn’t pass on any handling fees in SA”. GetUp Deputy Director Sam McLean has further defended the SA scheme, saying the state has the highest recycling rate in the country, recycling over 80% of its bottles and cans while the rest of Australia hovers at around 47%.

Alternative schemes

The beverage industry has provided alternative schemes claimed to be cheaper, more effective, and covering all types of packaging. Not only do individual companies fund their own programs, such as Coca-Cola’s support of Keep Australia Beautiful Beverage Container Recycling Grants, but they have also banded together. The Australian Packaging Covenant (APC) is a product stewardship program, requiring signatories to share responsibility for delivering improved environmental outcomes. The APC’s predecessor, the NPC, was formed in 1999, and Carnell says it has helped packaging recycling rates improve from 39% in 2003 to almost 63% in 2010.

One initiative of the APC is the National Bin Network - a $100 million, five-year, industry-funded plan which aims to deliver a 70% recycling rate for beverage containers and a 10% reduction in litter volumes in the first five years. In May, the network launched pilot programs in the Northern Territory, Tasmania and North East Victoria, granting $660,000 to provide community groups with the resources to clean up litter spots and install new recycling bins at various venues. Angel says extra bins in shopping centres and kerbsides won’t fix the litter in Australia’s waterways.

It is clear that there are many aspects to consider regarding the scheme, with these being just a few of them. But what do you think? Is a CDS the only way or are there better alternatives? We can’t give you a penny for your thoughts, but we at least hope we’ve provided you with some insight into a scheme which, if approved, will affect the whole nation.