Barriers to Beverage Industry Circularity Are Complex

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Barriers to Beverage Industry Circularity Are Complex

The following article was written by Australian Beverages Council CEO Geoff Parker for Inside Waste


Everywhere you look in Australia, recycling and container deposit schemes (CDS) are a hot topic with a range of commentators sharing their two, or 10 cents. With Victoria and Tasmania launching their schemes within the next 18 months, the continent is on the cusp of a producer responsibility scheme that covers the entire nation for beverage containers. This is a significant opportunity for the industry to drive true circularity in packaging.

As the only dedicated peak body for the proud non-alcoholic drinks industry in the country, the Australian Beverages Council Limited (ABCL) is leading the sector on a range of sustainability issues and has been the only association at the forefront of scheme design, development, rollout and review right across the country. The ABCL represents an industry that is a proud, responsible steward of the environment and the recyclable materials used in the industry’s packaging. One of the sector’s biggest priorities is helping to make CDS schemes as efficient and successful as possible through ongoing engagement with stakeholders across the country.

There have been recent opinion pieces which suggest the drinks industry saves money by lowering participation in CDS and that increasing kerbside collection diverts the cost of beverage container collection to councils. In reality, the drinks industry pays the same 10 cent refund whether the container goes into CDS or kerbside recycling, but an important difference is that in the case of CDS, it goes to the consumer. For kerbside, the refund for eligible containers is usually split between the local council and the waste provider.

The real-world, lived experience is that the beverage industry prefers containers to be routed through CDS, due to the superior quality and clean material it produces. It is well known that materials separated at the point of collection will always have less contamination than a mixed recyclables stream. This is why the Victorian model of a fourth glass only bin is welcomed by the industry. If this bin was introduced in South Australia for instance, the 89 per cent of glass in kerbside collection which is currently taken out of the circular flow of materials due to quality issues, would be significantly reduced.

To further drive circularity of drinks packaging, the inclusion of more materials into CDS such as beverage caps, wine and spirit bottles is pleasingly being endorsed by some parts of the drinks industry, the waste and recycling industries, environmental groups, consumers and many jurisdictions. In the medium term the drinks industry would welcome a discussion to see CDS further expanded to include other recyclable packaging types beyond drinks including personal care products, condiments, spreads and other food products sold in glass or plastic recyclable containers.

The CDS tide of container scope is turning. As little as four years ago when the NSW scheme was kicked off, the government’s primary objective was to reduce litter. Today there is a nationwide shift to viewing, thinking and forecasting CDS as a strategic asset towards materials’ recovery and supporting all federal and state targets towards recycled content. In short, there is room in a CDS for every type of recyclable packaging.

To hit the CDS sweet spot it will be vitally important that the needs of industry are aligned with the objectives of governments and the actions of consumers. Unsurprisingly, the nation’s federation model presents some challenges for harmonisation across these elements, and one example is with labelling. Until recently, there has been conflict and a degree of incompatibility in messaging between CDS (return to collection depot) and the Australasian Recycling Logo (ARL) (crush and put in kerbside bin) on certain containers, especially PET bottles. However, even with APCO’s decision to agree to a single logo for ARL/CDS consumer guidance, there remains incompatibility across states and territories.

The ABCL has been advocating for a streamlined and simplified message through this alternative single ‘hybrid’ ARL logo which gives clear consumer guidance for recycling a container whether in kerbside or CDS. The drinks industry is unique in that it comes to the Australian Packaging Covenant table with a well-established producer responsibility scheme that must be acknowledged and accommodated. To cast a ‘one-size fits all’ net with recycling guidance via the label while ignoring the considerable progress already made by the drinks, waste and recycling industries to achieve circular economy goals, is a step back to the 1990s. This is why the ABCL is calling on states and territories to nationally harmonise with APCO and allow the combined CDS/ARL logo to be the accepted replacement for the 10-cent wording currently mandated in CDS regulations around the country.

CDS and kerbside collection are only one piece in the circular economy puzzle and the reason the drinks industry is partnering with waste and recycling companies to create recycling and reprocessing centres throughout Australia. Shipping recyclables offshore to be processed and returned adds unnecessary carbon miles, takes jobs away from Australians, and drives up the price of integrating recycled materials into new products. As it currently stands, food-grade recycled PET (rPET) costs up to three to four times the price of virgin PET. Additionally, domestic demand exists, not only in the drinks industry but across food, personal care and other FMCG industries. Without a commitment to retain these materials and recycle them here, a truly circular economy in Australia will be unobtainable. Because of these factors some drinks companies have been forced to considerably increase their prices to enable them to be packaged in a recycled PET bottle.

With the majority of drink companies being small and medium businesses, these cost increases severely impede growth, restrict innovation and hamper local job creation. Without government assistance to level the playing field between virgin and recycled materials, as well as preventing the export of rPET for resale, the National Packaging Target of 50 percent recycled content in packaging by 2025 is unobtainable for all but the largest beverage companies.

The barriers and roadblocks to circularity of beverage packaging are complex. The drinks industry will continue its work with all levels of government, the waste and recycling industries and with consumers to promote a robust domestic recycling infrastructure for drinks containers, along with the harmonisation of CDS and kerbside recycling. Without clear recycling instructions for consumers, collection of container caps, and a dedication to keeping these materials onshore and financially viable for domestic reuse, the drinks industry could well be the canary in the coal mine for not seizing the opportunity to reduce the worsening landfill crisis. The drinks industry hopes that other sectors start or continue their own journey towards circularity so all sectors can look back in a few years and be enormously proud that their materials are being responsibly managed for the good of the planet and its people.