U.S. recycling alliance releases new report

The MSRP is a three-stage initiative designed to move toward BEAR's goal of an 80 percent recycling rate for all beverage containers.

Stage One began in May 2001 with the objective of identifying an industry-wide beverage container recovery program satisfying eleven guiding principles that can be supported by the groups most critical to its success (see facing page 17). A 14-member MSRP Task Force was formed to oversee research and seek agreement on this objective. The Task Force was comprised of members of BEAR's Steering Committee as well as representatives of a major beverage producer, a container producer, a waste management firm, a plastics processor, and local and state government. A 24-member Advisory Committee provided an even broader range of input from all types of stakeholders representing perspectives of the entire beverage container value chain.

The first stage of the MSRP has resulted in the release of a Value Chain Assessment Report to provide an objective, unbiased source of information on beverage container recovery programs. The research consulting team included R.W. Beck, Inc. (as lead), Franklin Associates Ltd., the Tellus Institute and Sound Resource Management Group.

The key findings of their report are:

After accounting for revenue from the sale of recovered materials, the total cost of the U.S. beverage container recovery system is approximately $1.06 billion (or about 1.34 cents per container). Aluminum cans is the only category for which material revenue can completely offset collection and processing costs.

• Traditional deposit systems relying on manual labor (as opposed to reverse vending machines) are the most expensive programs evaluated.

Gross costs for traditional deposit systems are about 4.07 cents per container, net costs including revenue sales are about 2.67 cents per container. If unredeemed deposits are included as a revenue source, manual traditional deposit systems have a net cost of about 1.26 cents per container. These costs are relatively high due to the need for handling and redeeming containers in retail stores, and sorting containers by distributor and/or by brand.

• Curbside recovery services are the next most expensive program.

Typical curbside programs collecting commingled beverage containers have a gross cost of about 2.48 cents per container, or about 1.72 cents per container including revenue from material sales.

• The California Redemption System has the second lowest gross cost and the lowest net cost.

The gross operating cost of collection and intermediate processing in this system is about 1.5 cents per container, or 0.14 cents per container including revenue from material sales. If unredeemed deposits are counted, the program generates a "surplus" of .76 cents per container. In the California redemption system, recovery occurs through "old line recyclers" (buy-back centers in existence prior to the 1986  redemption law) and convenience zone recyclers affiliated with retail stores. These collectors have extremely low collection and processing  costs. Unlike traditional deposit systems, the program does not require sorting by brand or distributors.

• If unredeemed deposits are considered as a revenue source, the costs of running the California redemption system and reverse vending  machine based deposit systems can be covered.

Some have argued that unredeemed deposits, resulting from consumers' decision not to redeem covered containers, should be "counted" as a revenue source for deposit programs. In seven of the nine traditional deposit systems, these funds are allowed to remain with distributors to offset their costs of implementing the program and in the California system they are distributed to recyclers by the state administrating agency. The graph on previous page indicates that, when unredeemed deposits are included, the typical traditional deposit system using a reverse vending machine produces a "surplus" of about .28 cents per container, and the California redemption system, with a redemption rate of about 69 percent, produces a "surplus" of about .76 cents per container.

• Residential drop-off programs have the lowest gross cost.

The gross cost of these programs is about 1.1 cents per container and the net costs including material sales revenue are about .3 cents per container. The net cost of drop-off programs is particularly sensitive to the quality of materials, which is extremely variable.

• Because of their wide variability, no specific cost estimates were derived for non-residential programs.

These programs vary considerably, with some operated on a purely volunteer basis (e.g., in schools) or being bundled with garbage or janitorial service contracts (e.g., in certain office buildings or other work places).

• Funding responsibility varies for different recovery programs.

Curbside and residential drop-off programs are funded by local governments with revenue derived from tax and rate payers. Deposit systems are funded by unredeemed deposits derived from consumers and from handling or processing fees paid by distributors and/or brand owners.

Greg Garvey, CEO, TOMRA Global Business Development, and member of the BEAR Executive Committee, says: "The BEAR Alliance presents stakeholders with an opportunity to depolarize the debate concerning the methodology for collecting used beverage containers, and thus help build a consensus for the way in which we can achieve a significant improvement in the container recycling rate in the US. With the MSRP Report now completed, BEAR has achieved a very important first step toward this goal. The significance of the report is that all stakeholders are in agreement on the numbers. The analysis is thorough and transparent, and therefore credible. It clearly states that some type of bring system based on convenience and a financial incentive is and will be the most effective and cost-efficient. I think everyone involved has come away from this initial process with the impression that we have laid the groundwork for the future of beverage container recycling in the United States. BEAR's goal now is to promote the analysis of the report, and working on the basis of its findings, begin to develop a plan for implementing a recycling system that is both the most effective in terms of a recycling rate and the most efficient with regard to cost and environmental issues. I feel confident that with the consensus achieved thus far, BEAR will be successful in developing a plan that is satisfactory for the wide majority of stakeholders."