Container Deposit Schemes: Ideal Scheme Attributes

The Australian Beverages Council, representing 95% of non-alcoholic beverage manufacturing throughout Australia, has been intimately involved in the establishment and monitoring of container depositschemes (CDS) across Australian states and territories.

It is from this knowledge base that we understand whats chemes work best for citizens, community groups, andgreater industry. The following summarises what scheme design aspects we believe make for the most efficient programs nationally and what could be carried across to other jurisdictions to ensure their schemes operate with the utmost efficiency and best results for the greater community.

Governance

Nationally Administered
Not by jurisdiction/region/state. Administering below the national level leads to disharmony between jurisdictions which has wide-ranging repercussions including difficulty with establishing first supplier, difficulty onboarding to the scheme, complex invoicing and a high administrative burden for participants, which is particularly felt by small and medium businesses.

Single Scheme Coordinator or Hybrid Model
Scheme Coordinator to manage all financial and operational functions without an additional network operator level; or hybrid model with not-for-profit Scheme Coordinator with multiple network operators. These models ensure that scheme costs are kept low while ensuring proper oversight and service standards.

Run by the Beverages Manufacturing Industry
Beverage manufacturing industry has consistently demonstrated low-cost and efficient management of CDS. This is essential if the scheme will be funded entirely by the beverage industry.

Semi-Statutory Authority
Creation of federal-level statutory authority which can administrate the applicable legislation. Allows for public transparency, government oversight and clear accountability standards.

Not-for-Profit, Company Limited by Guarantee
The Scheme should not make a profit and unclaimed refunds held should be returned to the Scheme to reduce scheme operation costs, further lowering the cost of operation and tax to producers.

Accountability

Ongoing Monitoring
Ongoing monitoring of price, competition, free market operations and performance should be carried out periodically by an independent regulatory tribunal or statutory authority.

Publicly Accessible, Transparent Contracts
All contracts involving Scheme Coordinators, Network Operators, Material Recovery Facilities, Materials Processors, Collection Points and Councils/Jurisdictions should be publicly
available to ensure no preferential treatment takes place between parties and all contracts are of the same high standard.

Features

Caps On (or with) Collection
Caps collection is essential to enabling a true circular economy for containers. Although caps cannot be remade into new caps, they are made of high-value material (commonly HDPE) which can be remade into other applications such as wheelie bins, playgrounds, bollards and wheelchairs.

Collection can be on the bottle or collected separately at refund points, determined by the local capability for MRFs to separate different polymer types. Instructions should be consistent across all collection points for ease of educating the public.

Objectives Evolved from Litter Reduction to Material Recovery
CDS throughout Australia have been shifting to a material recovery goal as opposed to simple litter abatement. This is a positive development because it expands the scope of items which can be recovered, necessitates innovation in collection and processing, and creates more food-grade feedstock for reintegration into products.

Partnerships with Commercial Entities and High-Rise Residential Building
Significant collection gaps are commonly found in commercial buildings and high-rise residential, due to the nature of cleaning service and waste contracts. Education partnerships with building management services and businesses, as well as re-negotiated waste contracts, can ensure that these containers are captured before ending up in landfill.

Consistent Legislation and Regulation Across Jurisdictions
Consistent legislation will reduce cost to business by offering greater certainty between jurisdictions and reduce legal interpretative costs.

Invoice in Arrears Model
Billing in arrears avoids the need for regular ‘true-ups’ that are required when payments are based on forecast container recovery and sales volumes.

Wide Variety of Refund Options
CDS is often utilised by people who prefer cash transactions (children, the homeless, pensioners), making it essential that cash is offered at return points. Other forms of payment which should be included are pre-paid debit cards, direct bank transfer, store vouchers, direct donation to selected charities, and PayPal.

Common National Scope for Eligible Containers
Common eligible containers promote understanding among consumers and allow for coordinated education campaigns across entities and regions.

Harmonisation Between CDS and ARL
As the ARL is to be nationally used, any CDS scheme that is created where the ARL is prevalent should take into consideration the logo to ensure there is not conflicting messaging on packaging. This also streamlines trade across ANZPAC countries as all will have the same standards.

Streamlined End of Year Reporting
The scheme should not require a statutory declaration or other costly/burdensome legal processes to confirm annual containers supplied into jurisdictions. Small ABCL members have noted that some schemes’ year-end requirements are more expensive and onerous than filing their Business Activity Statements.

Quarterly Invoicing for Small and Medium Businesses
Most CDS schemes operate on a monthly invoice model but allow for SMEs to switch to quarterly invoicing. This is positive as it greatly reduces in-house administrative burden and allows for better cash-flow planning.

Consistent Protocols: Export, First Supply, Contract Bottling
Varying protocols across CDS significantly increase costs to business, and lead to conflict with retail outlets over misinterpretation of the rules.

Annual Pricing Changes, 16-Week Notice Period
Monthly or quarterly price changes force suppliers to constantly revisit pricing with their distributors and prevent them from executing accurate financial forecasts. For an industry that operates on small margins, constant fluctuations in its cost of goods can heavily disrupt a business’ cash flow and create an administrative burden requiring extra staff or consultants. Constant pricing changes also erode beverage manufacturers’ relationship with retailers, where meetings become simply about price.

Services

Streamlined Back-End Functions and Single Platforms and Protocols for:

• Container registrations
• Supplier registration
• Invoicing
• Auditing
• Reports

Operations

Single Container Registration Point (Reciprocity)
Reciprocal recognition of containers registered in one jurisdiction would substantially reduce business costs associated with providing duplicated information for each CDS.

Multiple Collection Modes e.g. Depots, RVMs, Bag Drops
Greater opportunities to return fosters higher return rates. Research shows that different regions have higher return with different modes i.e., metro areas with limited area to operate a staffed return point benefit from automated reverse vending machines.

Wide Range of Operating Hours, Including Nights and Weekends
Research shows that the inaccessibility of return points to night and shift workers is a significant barrier for them to participate. Recent innovation, such as 24-hour bag drop off points, allow for better flexibility in accepting returns past over-utilising reverse vending machines.

Processors and MRFs’ 10c Tied to Greater Sortation Investment
CDS must ensure all collection points and waste processors sort materials with the intention of retaining them as food-grade recyclate. This benefits materials processors, MRFs and the beverage industry by raising the market value of outputs and preventing them from being downgraded out of the circular economy.

Streamlined Marketing and Promotion
Streamlined consumer marketing and promotion fosters understanding among consumers and business, encouraging greater return rates.