Container Deposit Schemes: Where to from here?

containers for change at shopping centres

Australia is on the cusp of being the only continent to be fully covered by drink container refund schemes. A session at Waste 2023  in Coffs Harbour looked at the evolution of the nation’s container deposit scheme landscape.

South Australia has led the way in Australia with a Container Deposit Scheme (CDS) operating since 1977.

It took 35 years before other states began to follow suit, with the Northern Territory introducing a scheme in 2012. Over the decades other states have adopted their own refund schemes, offering a cash incentive for people to return used drink containers to be recycled. 

With the rollout of Victoria’s Container Deposit Scheme in November 2023 (TOMRA Cleanaway installed the first collection point this month), and Tasmania’s version taking shape, Australia is on the cusp of being the only continent to be fully covered. 

Alex Young, Director of the Container Deposit Scheme at the New South Wales Environment Protection Authority (EPA), said while the objective of the NSW scheme when it was introduced in 2017 was to reduce litter, it was also about recycling and encouraging users to keep coming back.

The scheme was designed to be cost effective, at no cost to government – a “proper, extended producer responsibility model where the industry paid for the cost of the scheme”.

It also had to complement the kerbside system and have a robust tracking and verification system to both monitor the scheme’s success and manage the risk of fraud.

Six years on and the scheme is ticking all the boxes, Alex said.

“The proof’s in the pudding.

“We’ve got more than 600 return points, which is significantly more than the minimum required in the legislation, so we know that we’re driving that convenience. We’ve collected over 9.3 billion containers, so we’re seeing good collection rates, we’ve reduced litter by 53 per cent and we’ve doubled the resource recovery rate compared to kerbside prior to the scheme. 

“Not only that, but what we’ve seen is really high-quality recycling – bottle-to-bottle recycling.”

Alex said the EPA is mindful of scheme’s plateauing and is working with partners Exchange for Change and TOMRA Cleanaway to drive more convenience and improve recovery rates. 

However, there could be trouble brewing on the horizon. A recent announcement by Queensland that it would expand its CDS to include glass wine and spirit bottles this year had changed the landscape when it comes to harmonisation of schemes across Australia – a facet that some in the industry are keen to see, sooner rather than later.

cds scheme
The CDS panel: Shaun Fraser, Container Exchange QLD; Danielle Smalley, Exchange for Change; Alex Young, Director CDS, NSW EPA; Rob Kelman, Reloop Platform; and Michelle Mandl, TOMRA Cleanaway.

Danielle Smalley, Chief Executive Officer of Exchange for Change, said the Queensland announcement had not sent a strong message about the commitment to harmonisation.

She said participation in schemes needs to be made easier for beverage suppliers who are frustrated by having to navigate the different eligible containers, reporting methods, invoices, and pricing of various jurisdictions. 

Despite the difficulties, she said there had been a change in mindset from suppliers. Initially the beverage industry wasn’t happy about a compulsory product stewardship scheme, however, it has realised it’s here to stay and is looking at ways to optimise the benefits.

There’s also now a consumer shift to circular economy outcomes.

Danielle used the example of Asahi and Coke partnering with Cleanaway and Pact Group to build a facility that processes 100 per cent of the Polyethylene terephthalate (PET) in New South Wales. 

“We can talk about a bottle-to-bottle journey there with great confidence,” she said. “Consumers are making this effort to return the material through the return points. And with examples like the plant in Albury, we can provide tangible, concrete examples of what happens to that material, which makes them realise that the effort is absolutely worth it.”

Moving forward, she flagged whether there’s an opportunity to influence choices in the materials that suppliers use for their products to align with government objectives, such as glass that is infinitely recyclable, and tapping into existing infrastructure to expand what recyclables can be dropped off at collection points. 

“How much further we can we take it?” Danielle asked.

Michelle Mandl, General Manager of Communications at TOMRA Cleanaway, the network operator in NSW, said the state’s scheme had activated local communities and leveraged a retail model that aligns to existing consumer behaviours.

TOMRA Cleanaway has been appointed one of the network operators for the Victorian scheme and plans to deliver a similar, technology-based system with robust audits and verifications. But Michelle said while the system is proven, when looking at future risks, there needs to be a discussion about increasing the deposit value from 10 cents and targeting the next generation of recyclers.

She said 10 cents is a hard sell, even for someone within the industry.

“I reflect on doing things like taking my 13-year-old to Harry Styles and paying $6.70 for a bottle of water at the stadium,” Michelle said. “Even I, as a participant in the scheme, found it a hard sell, to think ‘will I take that home with me? Will I put it in my bins and participate in return and earn?’ 

“If you multiply that across the community, redemption rate is a lever that will increase participation which in turn, delivers a higher value, clean stream of product for the circular economy locally.”

She said schemes are currently aimed at adults because they predominantly buy the beverages, but in five to 10 years’ time, it will be the teenagers of today that need to be engaged in the scheme.

“We need to get their mindset around this environmental benefit because we know that that appeals to them now.”

cds scheme
A10-cent refund for eligible containers is a ‘hard sell’ according to industry insiders.

Rob Kelman, Director of Reloop Platform, believes the community is already insufficiently engaged and existing schemes are stagnant in terms of recovery rates. He said that’s only going to worsen because of the inflationary effect on the refund value. 

Return rates nationally average about 65 to 68 per cent, according to Rob, but Australia could do a whole lot better, because there’s still about three to four billion drink containers being littered or landfilled every year. 

He pointed to Europe as an example, where the refund value is equivalent to 40 Australian cents. Germany has a recovery rate of 98 per cent, and most of Northern Europe is more than 90 per cent. 

“It’s convenient and is a big motivation to get 40 cents back,” Rob said. “We could do a whole lot better. We need to reform our schemes.”

Part of that reform should include increasing convenience for consumers to participate in schemes. 

The ratio of collection points to people across Europe is about one per 1000, where in Australia it varies from one per 12,000 to one per 20,000, depending on the state and region.

“Analysis shows that a refund increase will have an impact,” Rob said. “We need a proper reform agenda. 

“Could we think about incorporating a refill agenda into the existing scheme? We’ve got the infrastructure; we’ve got a refund venue and there’s a community appetite for reuse. Is that something we can start to look at?”

Danielle agreed that an increase in redemption rate is motivation for people to participate in a scheme but it’s not the only motivation. There are also other barriers to participation, such as access.

She said just changing the redemption rates is a knee jerk reaction. 

“Our view is that there is still room for growth,” Danielle said. 

“We know it looks like growth has plateaued, but we haven’t had a normal period for a long time. We’ve had fires and COVID-19 and floods, we had REDcycle collapse, which may have impacted on people’s willingness to participate in this scheme, and we’ve also had huge supply in New South Wales.

“We need to wait and see when that all settles down are we then able to raise the redemption rate?”

Shaun Fraser, General Manager of Operations at Container Exchange, said raising the refund amount from 10 cents is a matter for regulators.

While Queensland’s recovery rate had stabilised, he said there’s room to grow and agreed that there needs to be solutions to other barriers such as providing opportunities for those who can’t access a scheme. 

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