the economic and environmental impact of refundable deposits on beverage containers … › assets...

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4361KeystoneAve.CulverCity,CA:(310)559‐7451

www.container‐recycling.orgwww.bottlebill.org

TheEconomicandEnvironmentalImpactofRefundableDepositsonBeverageContainersinTexas

ThispaperisintendedtoenhancethelevelofunderstandingofbeveragecontainerrecyclingintheUnitedStatesandtheStateofTexas,andtodemonstratetheimpactofrecyclingonemissionsreductionandtheeconomy.TheinformationcontainedinthispapershouldbeusedtofurthersupporttheinclusionofTexasState‐mandatedregulatoryinstrumentsforincreasedbeveragecontainerrecyclingatthestatelevel.Likemostdevelopedcountries,theUnitedStatesmustreducethegenerationofgreenhousegasesthatcontributetoclimatechange.Thesereductionsmustcomefromchangesindomesticsystemsandsystemsthatextract,transportandmanufacturematerialsandproductsforexport.Amongthevariouswaysavailabletohelpachievethesereductionsisrecoveringmaterialsformanufacturingthroughrecyclingcollectionandprocessing.Significantreductionsinenergyconsumptionarerealizedwhengoodsaremanufacturedfromsecondary,versusprimarymaterials.Thus,recyclingpost‐consumergoodsisanecessarycomponentoftheStatelegislativeframeworkbeingdesignedtoaddressclimatechange.ThispaperispresentedbytheContainerRecyclingInstitute(CRI).CRIisanonprofitorganizationthatstudiesandpromotespoliciesandprogramsthatincreaserecoveryandrecyclingofbeveragecontainers,andshiftthesocietalandenvironmentalcostsassociatedwithmanufacturing,recycling,anddisposalofcontainerandpackagingwastefromgovernmentandtaxpayerstoproducersandconsumers.CRIplaysavitalnationalroleineducatingpolicymakers,governmentofficialsandthegeneralpublicregardingthesocietalandenvironmentalimpactsoftheproductionanddisposalofbeveragecontainersandtheneedforproducerstotakeresponsibilityfortheirpackaging.

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TheEconomicandEnvironmentalImpactofRefundableDepositsonBeverageContainersinTexas

UnderstandingtheimpactofbeveragecontainerrecyclingonsavingenergyandreducinggreenhousegasemissionsTheUnitedStates,andindeed,allnationsaroundtheworldmustactivelyparticipateinstrategiestominimizegreenhousegasemissions.Reducingenergyconsumption,curtailingnaturalresourcedepletion,minimizingpollutionandeliminatingwasteareallpartofthesolution.Recyclingrequiresasmallamountofeffortonthepartsofeachlinkofaproduct’svaluechain,yetthetotalimpactoftheseeffortscanhelpsolvethisglobalproblem.Asasolidwastemanagementstrategy,recyclingreducestheamountofwastesenttolandfillsorincinerated,butrecyclinginthetwenty‐firstcenturyisnolongermerelyawasteminimizationtool.Miningsilicaorbauxiteoreanddrillingforpetroleumandnaturalgasareprimaryextractiveindustriesnecessaryfortheproductionofglass,aluminumandplastics.Recyclingpostconsumergoodsissecondaryextractionofvaluablealuminum,glassandplasticcontainers,andtherecoveryoftheenergyembeddedinthosecansandbottlesthatwasusedtotransformprimaryrawmaterialsintoconsumerproductsinthefirstplace.Recyclingsignificantlydiminishesalloftheinputsneededtomakethereplacementproductfromvirginmaterials.Avoidingthese“up‐stream”functionsmeanssignificantlyreducingenergyusageandassociatedgreenhousegas(GHG)emissions.TheRoleofRecyclingBeverageContainersEveryyearinAmerica,millionsoftonsofemptybeveragecontainersaredisposedofingarbagebins,ortossedoutaslitter.Communitiesincurconsiderablewaste

managementandlittercleanupcosts.Fromaneconomicperspective,emptybeveragecontainersareworthalotofmoneyasasecondarycommodity.Intermsofaluminumandsteelcans,plasticPET&HDPE,andglassbottles,morethan$2.9billioninrecyclablescrapwasburiedinalandfill,littered,or

burnedinanincinerator1lastyear.Thisrepresentsalossofnearly65percentofpotentialrevenuesfromemptycontainers.

1Basedonindustry‐reportedrecycledcommodityvaluesfor2010.

Morethan$2.9billionworthofrecyclablescrapfromemptybeveragecontainerswaseitherburied,litteredorincineratedinlastyear.

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Givenourneedtoconserveenergyandreduceemissions,rampingupbeveragecontainerrecyclingisessential.Inoneyearalone,ifAmericansweretorecycle75percentofallthealuminum,steel,PETandHDPEplastic,andglassbeveragebottlessold,nearly10millionmetrictonsofgreenhousegaseswouldbeavoidedcomparedtothereductionsfromthecurrentbeveragecontainerrecyclingrateof35percent(byunit).Thiswouldbeequivalenttotakingnearlytwomillioncarsofftheroad.AsignificantimprovementinbeveragecontainerrecyclingcouldhelptheUnitedStatesachieveits2020greenhousegasreductiontarget.Specifically,a90percentrecoveryratewillresultin25.2millionmetrictonsofavoidedgreenhousegasemissions,equivalentto1percentofthe2020reductiontarget.2Fromanenergyperspective,nationwiderecyclingof75percentofallbeveragecontainerswouldsavenearly185millionMBTUsofenergy,equivalenttotheenergycontainedinover1.6billiongallonsofgasoline‐enoughfuelforover3millionaveragepassengervehiclesforoneyear.3MovingRecyclingForwardinTexasTexas’existingbeveragecontainerrecyclingratesareverylow.Morespecifically,CRIestimatesthatthebeveragerecoveryratesare:

BeverageContainerType

AluminumCans SteelCans PET

bottlesHDPEBottles

GlassBottles

RecyclingRate

33% 63% 14% 21% 12%

*Recoveryrateestimatesarebasedontheaveragerecoveryratebycontainertypeinnon‐depositstates.Source:CRI’sBeverageMarketDataAnalysis2008,basedon2006data.RateforAluminumcansisreportedbyAlcoa.Amodern,comprehensivedeposit‐returnprogramwhichismodeledonothersuccessfulprogramsintheUnitedStatescanimprovetheserecyclingratesdramatically.Forexample,onaverage,deposit‐returnprogramstraditionallyrecoveratleast75percentofmostbeveragecontainertypes.Theseratescanfurtherbeimprovedthroughaseriesofmechanismsbuiltintotheprogramwhichprovidegreaterincentivesforconsumerstoreturnandrecycletheircontainers.

2The2020GHGreductiontargetisequalto~2.548billionMTCO2e,ofwhichbeveragerecyclingto90percentwouldcontribute1percentofthatgoal(25.2millionMTCO2e).3Energysavingscalculatedusing:SolidWasteManagementandGreenhouseGases–ALifeCycleAssessmentofEmissionsandSinks,3rdEdition,USEPA,September2006;AvoidedGHGEquivalents(MTCO2e/ton):Exhibit8‐8,AvoidedEnergyEquivalents(MBTU/ton):Exhibit7‐8;GHGemissionsavingsderivedfromUSEPAWasteReductionModel(WARM)UpdateAugust2010.OneUSgallonofgasolinecontains115,000BTUs.,Theaverageconsumptionperyearis502gallonspervehicle.Sources:http://www.fuelgaugereport.com/

Recycling90percentofallbeveragecontainerswouldcontributetoonepercentofour2020greenhousegasreductiongoal.

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Onebenefitofdeposit‐returnprogramsisthattheydonotrelyonmunicipalrevenuestofundthesystem.Instead,mostdeposit‐returnprogramsutilizematerialrevenuesandunredeemeddepositstohelpoffsetcosts.WhyMunicipalCurbsideProgramsDon’tWorkforBeverageContainersThebeverageindustryiskeentoshifttheburdenofcollectionandrecyclingtomunicipalgovernments,bysuggestingthatcurbsiderecyclingprogramsarethemostefficientandconvenientwaytorecycle.Whilecurbsiderecyclingprogramsarenecessaryformanyhouseholdgeneratedmaterials(likepaperandotherpackaging),inthecaseofbeveragecontainerrecycling,theyaresimplynowherenearaseffective.Thisisprimarilyduetothefactthatmanybeveragecontainersaregeneratedawayfromhomeor“on‐the‐go”andend‐upbeingdiscardedinlocationswheremunicipalcurbsidereceptaclesdonotexist(offices,bars,restaurants,publicparks,beaches,busstops,touristsites,shoppingstripsandmalls,etc.)MaturecurbsideprogramsthroughoutAmericahavedemonstratedthatonaverage,residentialrecyclingprogramsachievelessthan35percentrecyclingratesforbeveragecontainers,andincreaseoverallrecyclingcostsforratepayers.Curbsiderecyclingformostbeveragecontainersisalsoexpensive.Costsofdoor‐to‐doorcollection,processingofhighlycommingled(mixed)andcompactedmaterial,andlitterabatementareexpensive,andtherevenuegeneratedfromtheselowerqualitycommoditiesissignificantlylowerthansourceseparated“clean”containerswhicharecollectedthroughdeposit‐returnsystems.Assuch,tenUSstatesandmostCanadianprovinceshaveoptedforcomprehensivedeposit‐returnprogramsinadditiontomunicipalcurbsiderecyclingprograms.Insomecases,likeCaliforniaortheProvinceofNovaScotia,thedeposit‐returnprogramfinanciallysupportsmunicipalcurbsiderecycling.MovingrecyclingforwardinTexasrequiresinvestigatingamodern,efficientdeposit‐returnprogramwhichutilizesbestpracticesfromotheroperatingsystemsinNorthAmerica.Moderndeposit‐returnprogramsareproventobehighlyeffective,low‐cost,equitable,andsupportedbythegeneralpublic.ConsiderthebenefitsfromincreasedcontainerrecyclinginTexas(seetableonpage6):

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• Increasingtherecoveryrateonaluminumcansfrom33percent;glassbottlesfrom12percent;andPETbottlesfrom14percent(statusquo)to75percentthroughamodern,comprehensivedeposit‐returnsystemwouldgenerateanadditional$154millionincan,glass,andPETcommodityrevenuesfortheState.

• Recycling75percentofallaluminum,steel,PET,HDPEandglassbeveragecontainersinTexaswoulddivertanadditional647,000tonsofwastefromdisposal.

• Increasingbeveragecontainerrecyclingto75percentinTexaswouldleadto

theavoidanceofover1millionmetrictonsofgreenhousegasemissions–equalinpollutionmitigationtotakingover200,000carsofftheroadforoneyear4.

• Increasingbeveragecontainerrecyclingto75percentinTexaswouldenable

savingsofanadditional19.3millionMBTUsofenergy–equivalenttotheenergycontainedinover168milliongallonsofgasoline5,orabout3.3millionbarrelsofcrudeoil6‐worthtodayover$290million7.

4EachUSautogeneratedabout5.23MTCO2epervehiclepercar.http://www.epa.gov/cleanenergy/energy‐resources/refs.html#vehicles5Thereare115,000BTUsofenergycontainedinagallonofgasoline:bioenergy.ornl.gov/papers/misc/energy_conv.html6Thereare5.8MBTUsofenergycontainersinabarrelofcrudeoil.Source:Ibid,.7OnFebruary8,2010,crudeoilwasvaluedat$87/barrel.Source:Bloomberg

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RecyclingContainersisgoodfortheManufacturingSectorWhenmanufacturersusesecondaryfeedstocklikeemptybottlesandcans,costsassociatedwithsourcing,extracting,processingandshippingrawvirginmaterialsareeliminated.Manufacturersareabletoreducetheirneedforprimaryfeedstockandgainbothenvironmentalbenefitsandcostsavings.Forexample,usingrecycledaluminumcanstomakenewcansmeansavoidinglimestone,saltandbauxitemining;italsoeliminatestheneedforcausticsoda,chlorine,alumina,crudeoil,petroleumcoke,andanodeproduction.Makinganewcanfromarecycledcansaves95percentoftheenergyandrelatedemissions.8Intoday’suncertaineconomy,producersofproductsandpackagingcanbenefitgreatlyfromtheefficienciesgainedfromusingrecycledinsteadofvirginfeedstock.Increasingthesupplybynearly650,000newtonsforrecycling(froma75percentbeveragecontainerrecoveryrate),andmaintainingahighqualityofemptybeveragecontainersfordomesticrecyclingisanimportantsteptowardseconomicrecoveryandstimulus.RealEconomicandSocioeconomicBenefitsfromRecyclingThevalueofrecyclinggoesfarbeyondcommodity‐basedrevenuesandenergyconservation.RecyclinginfrastructureinvestmentwillcreatejobsinTexasthatcannotbeoutsourced.Astatebeveragecontainerdeposit‐returnsystemwouldcreate‘greenjobs’forTexans.In2007,theUnitedStatesgenerated$236billioninrevenuesfromrecyclingandancillaryservices;creatingsome1millionjobs–allcontributingabout2percentoftheUSGDP9.Mandatesforincreasedrecyclinghelpedcreate1,800newjobsinMassachusetts,4,684inMichigan,3,800inNewYork,and14,000inCalifornia.Inaddition,thesearejobsthatemploylocaldrivers,plantandequipmentconstruction,technicians,low‐skilledlabor,andadministrativeandmanagementpositions.NationwideBeverageContainerRecyclingEnhancementRequiresStateLeadershipAcrossmostoftheUnitedStates,municipalitiesbeartheresponsibilityforbeveragecontainerrecycling,beveragecontainerlitter,anddisposal.Localbudgetarypressures,exacerbatedbytheeconomicdownturn,haveconstrainedtheexpansionofexistingrecyclingprogramsandtheadoptionofnewones.Relianceonlocalpropertytaxestofundmaterialsrecoveryhasstagnatedbothprivatesectorrecyclinginfrastructureinvestmentsandcommitmentstousingrecycledcontentinmanufacturing.WithoutaStatemandate,manymunicipalrecyclingprogramswithlimitedbudgetswillopttocurtailordelayimplementingrecyclingprograms.Manyofthesecommunitieshaveverylimitedinvestmentinefficientcapital,andare 8Source:Novelis9BusinessWeek

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inexperiencedincommoditybrokeringandsocialmarketing.Considerthatin2006therewere8,660curbsiderecyclingprogramsintheUS,downfrom8,875programsin200210.DevelopingaStrategyforIncreasedBeverageRecyclingStateslikeTexasarewellpositionedtochangethestatusquo,becausetheyhavejurisdictiontolegislatethevariouselementsrequiredtoimprovebeveragecontainerrecycling,includingawardingfinancialassistancethroughgrants.Inlate2006,theUnitedStatesGovernmentAccountabilityOffice(GAO)releasedareportentitled;Recycling:AdditionalEffortsCouldIncreaseMunicipalRecycling.TheresearchreportedfindingsfrominterviewswithrecyclingcoordinatorsfromacrosstheUnitedStates,includingsummariesoftheprimarypracticesrequiredtoincreasemunicipalrecycling.Theseinclude:makingrecyclingmoreconvenient,offeringfinancialincentivesforrecyclingthroughuser‐feesongarbageand/orincentive‐basedschemeslikedeposit‐returnsystemsandRecycleBank,andconductingpubliceducationandoutreach.MeetingTargets:CaseStudiesInspiteoftheoveralllowrecoveryratesforbeveragecontainerrecovery,somestatesaremeetinghighrecyclingtargetsthroughacombinationofcollectionsystems.Whileeachsystemisdifferent,commontoallsuccessfulprogramsareStateand/ormunicipalmandates.California’smanystate‐widerecyclinginitiativeshavesupportedtheirachievementofa65percentdiversionratefor2009.11AmongthevariedrecyclingandcompostingprogramsistheinnovativeCaliforniaRedemptionValue(CRV)deposit‐returnprogram,whichhasanoverallrecoveryrateof82percent.(91percentforaluminumcans,73percentforPETplasticbottles,and80percentforglassbottles)12.Expandedin2000toredeemmorebeveragecontainercategories,theCaliforniadeposit‐returnsystemisconsideredbymanyasstate‐of‐the‐artintermsofsystemdesignandstakeholderequity.TheCaliforniamodeloffersconvenientcollectioncentersknownas“conveniencezones”withinahalf‐mileradiusofabeverageretailer.Inaddition,theprogramallocatesfundsformarketdevelopmentandmunicipalpayments.Inadditiontothebeveragecontainerprogram,California’sstate‐administeredgrantprogramsformunicipalities,industryandentrepreneursfundsnewopportunitiestocollectseparatedmaterialsforrecycling.Forexample,theCalRecyclealsooffersafinancialincentivetoanyprogramoperatorformunicipalrecyclingtoimprovethequalityandmarketabilityofglassbeveragecontainermaterial.CalRecyclewillpay

10BiocycleMagazine,2006 11Calrecycle.LarryStevens12Calrecycle,California’sBeverageContainerrecyclingandlitterreductionfactsheet.2009

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qualityincentivepaymentsforsomerecyclablematerials(likeglassbottles)whicharesubstantiallyfreeofcontaminationforrecycling.Mostmunicipalitiesalsoofferconvenientcurbsideanddrop‐offrecyclingservicesforpackagingandpapergeneratedinhouseholds.Atthestatelevel,Oregonhasimplementedavarietyofregulatedinitiativesthatpromotebeveragecontainerrecycling.Stateregulationsmandaterecycledcontentforglass,newsprintandtelephonedirectories13;andcontainerdepositlegislationforbeer,carbonateddrinks,andwater14.Curbsiderecyclingisofferedtoabout75percentoftheresidentialsector.Togetherthishybridprogramrecoversabout81percentofalldepositbearingcontainers.77percentofbeveragecontainersarecapturedthroughthebottlebilland4percent15throughcurbsiderecycling.Non‐depositcontainerscollectedthroughmunicipalcurbsideprogramsarerecoveredatarateof35percent16.Thestatealsooffersfinancialgrantstolocalgovernmentsforwasterecoveryprojects.Canada’slargestprovinceofOntario(population13million)utilizesahybridmodelofcomprehensivemandatedcurbsiderecyclingwhichispartiallyfundedbyindustry,aswellasadeposit‐returnprogramforallalcoholicbeveragecontainers.Thecurbsideprogram,whichisofferedto99percentoftheprovince’sresidents,recoversabout46percentofallaluminumcansand50percentofplasticbeveragebottles,whiletheprovincialdeposit‐returnprogramforbeveragealcoholcontainerscollects82percentofaluminumcansand96percentofglassbottles17.CurrentlytherearetenUSstatesthatofferdeposit‐returnforavarietyofbeveragecontainers,whichinclude:California,Hawaii,Connecticut,Iowa,Maine,Massachusetts,Michigan,NewYork,Oregon,andVermont.ThesestatesrankasleadersinAmericaintermsofsettingthebarforhighrecoveryratesand,insomecases,veryhighrecovery.Morespecifically,theleadersinclude:Michiganat97percent;Maineat93percent;Vermontat85percent;Iowaat86percent;Oregonat84percent;Hawaiiat76percent;Californiaat82percent;andNewYorkat70percent.18Notonlydodepositstatesleadintermsofhighrecoveryrates,butingeneral,theyalsosupplyrecyclerswiththehighestqualityscrapmaterialcomparedwithanyothertypeofrecyclingprogramintheUS,whichimprovesoverallefficiencyintermsofprocessingandre‐manufacturing.Theseexamplesillustratethatrecyclinggreaternumbersofbeveragecontainersispossiblethroughavarietyofprogramsthatcanbedesignedinawaytoreflectconsumptionpatternsandmeettheneedsofcities,statesandthenation.

13Statute:ORS459A14Statute:ORS459A.700152005data,preparedonJanuary15,2008byOregonDepartmentofEnvironmentalQuality16Ibid.17ResponsibleStewardship20092010,TheBeerStore18BottleBill.org

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InformationSourcesRECYCLINGFIGURESBeverageMarketDataAnalysis2006–ContainerRecyclingInstituteENERGYANDGHGSAVINGS SolidWasteManagementandGreenhouseGases–ALifeCycleAssessmentofEmissionsandSinks,3rdEdition,USEPA,September2006;GHGemissionsavingsderivedfromUSEPAWasteReductionModel(WARM)UpdateAugust2010VALUEOFEMPTYBEVERAGECONTAINERSAluminumpriceis$1770/tonforbaledaluminum:SourceEvermoreRecycling,Feb2011Steelpriceis$239/ton‐averageratefor2010,Source:StewardEdgePriceSheetPETpriceis$355/ton‐averageratefor2010,Source:StewardEdgePriceSheetHDPEpriceis$421/ton‐averageratefor2010,Source:StewardEdgePriceSheetGlasspriceisbasedonthevalueofamberglassasrepresentativeofanaveragepriceforsecondarycleanglass:Flint:$30,Amber:$25,Green:$5,Mixed:$5tonegative$60dependingonquality.Source:StrategicMaterials.STATSUSEDFORENERGYCONVERSIONCALCULATIONSThereare115,000BTUsofenergycontainedinagallonofgasolineThereare5.8MBTUsofenergycontainersinabarrelofcrudeoil.Source:bioenergy.ornl.gov/papers/misc/energy_conv.htmlLIGHTINGAveragelightingconsumptionperhouseholdintheUSAis940kwh.Source:ResidentialConsumptionofElectricitybyEndUse,2001,End‐UseConsumptionofElectricity2001,www.eia.doe.govThenationalaverageheatrateisabout10,722BTUperkWhofdeliveredelectricity.Therefore,eachhouseholdconsumesabout10MBTUsofelectricityperyearindeliveredelectricity.(0.010722MBTUs*940kwh=10MBTUs)HOMEHEATINGTheaverageAmericanhomeinamoderateclimateusesabout50MBTUsofenergyforheatingperyear.Source:U.S.DepartmentofEnergy–EnergyEfficiencyandRenewableEnergy–IndustrialTechnologiesProgramEMISSIONSFROMCARS:EachUSautogeneratesabout5.23MTCO2epervehiclepercarperyear.http://www.epa.gov/cleanenergy/energy‐resources/refs.html#vehiclesGASOLINEOneUSgallonofgasolinecontains115,000BTUs.Source:http://bioenergy.ornl.gov/papers/misc/energy_conv.htmlValue:$4.06pergallonofmid‐levelunleadedgas.Source:http://www.fuelgaugereport.com/Theaverageconsumptionperyearis502gallonspervehicle.Source:EPA–GatewaycalculatorOIL5.8millionBTUsperbarrelofcrudeoilValueofabarrelofcrudeoil:$87(February82010,SourceBloomberg)

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