Best practice delivers performance and innovation for CDS

A container deposit scheme that follows best practice leads to better performance and innovation and should be top of mind for Victorian and Tasmanian Governments as they develop their state-based schemes, writes Rose Read, NWRIC CEO.

Tasmania has signalled its intention to have a container deposit scheme (CDS) up and running by 2022, with Victoria to follow suit by 2022/23. There is now plenty of active discussion on best practice.

The National Waste and Recycling Industry Council (NWRIC) has written to both the Victorian and Tasmanian Environment Ministers highlighting the need for each scheme to be fair, equitable and transparent.

Strongly recommending that targets for community access, container redemptions, resource recovery and litter reduction are regulated, that operating and revenue sharing protocols are consistent with existing schemes and that scheme performance is publicly reported each quarter.

NWRIC’s preference has always been for a nationally regulated CDS rather than separate state and territory-based schemes.

With Victoria and Tasmania developing their schemes concurrently, the opportunity to ensure greater regulatory and operational consistency between all schemes should be a priority.

Consistency between state and territory CDS’ removes administrative duplication, creates cost efficiencies and drives innovation in collection, investment in local recycling capacity and greater reuse of materials into beverage containers.

As a minimum, the Victorian and Tasmanian governments should look to and learn from existing schemes for best practice.

NSW’s Return and Earn CDS has clearly set the benchmark in best practice in community access, container redemption and recycling rates, social and environmental outcomes and transparent governance.

The NSW Return and Earn governance model separates the roles of scheme regulator, network operator(s) and scheme coordinator.

Whereas in Queensland and Western Australia, the government has outsourced the network operations role to the scheme coordinator.

By doing this, the Queensland and Western Australian governments have lost control of ensuring community access is delivered.

By being one step removed, the government’s ability to correct and fine tune network operations no longer exists. Likewise, the incentive to innovate and optimise collections and material recovery through an open and competitive process has been removed.

The reason the NSW CDS works well is because of how it is structured.

By separating the roles of network operators and scheme coordinator, it ensures consumer convenience is being delivered and provides a commercial incentive to collect and recycle containers back into the economy.

In Queensland, even with a community access target set by government, customer convenience is still poor, with many collection points only open for limited hours or located in light industrial areas.

This is what you get with too much devolution of responsibility and a least cost compliance approach.

Similarly, when it comes to recycling containers, the Queensland scheme coordinator’s current online auction system, where accredited recyclers bid for material through a secure online portal, is flawed in two ways.

Firstly, the portal is not publicly accessible, thereby raising concerns about how recycled materials are traded and revenue shared between network operators and the scheme coordinator.

Secondly, it’s a closed shop, restricting access to legitimate organisations to purchase feedstock necessary to encourage investment in onshore processing facilities.

It is clear that CDS’ drive better outcomes including investment in onshore processing facilities, such as the recently announced two joint ventures by Cleanaway, Pact and Asahi, and Veolia and Coca-Cola Amatil, to establish recycled plastic processing plants.

This not only creates jobs and adds value to the Australian economy, but also ensures greater transparency of downstream recycling, as processing stays locally in Australia.

It also increases the amount of traceable local recycled content for the manufacture of beverage containers, creating a true circular economy.

Irrespective as to which governance model the Victorian and Tasmanian Governments finally choose, the regulatory instrument must, as a minimum, ensure the scope of containers included and the deposit amount for the proposed scheme is consistent with existing state and territory schemes.

The regulatory instrument should include annual targets for community access, container redemption, resource recovery and litter reduction, as well as fair and equitable operating rules and cost/revenue sharing arrangements that are consistent with existing schemes.

Finally, to instil community engagement and business confidence, the scheme coordinator and network operators should be required to report publicly every quarter on key targets.

The NSW scheme has done this particularly well. NWRIC has continually advocated for regulated product stewardship schemes such as CDS because of their ability to reduce environmental harm and protect human health by preventing waste and keeping resources circulating in the economy and out of the environment.

Given the community reach, environmental benefits and involvement of the hundreds of local councils, charities, collection and recycling businesses and beverage companies, it is critical that the Victorian and Tasmanian Governments get the CDS governance right.

The principles of transparency, fairness and equity must be applied and the NSW Government approach of separating the roles of network operator (s) and scheme coordinator clearly delivers this.