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Jun 1, 2012

Crikey Clarifier: would a national 10c cash-for-trash scheme work?

It looks like state and federal governments will not be binning plans for more cash-for-containers schemes, with Tony Burke announcing support for a national program. Aicha Marhfour examines how a scheme would work.

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It looks like state and federal governments will not be binning plans for more cash-for-containers schemes, with Environment Minister Tony Burke announcing support for a national program and bills being recently tabled by the Greens in NSW and Tasmania for state initiatives.

The plan is to boost flagging recycling rates by offering consumers 10c a bottle for their empties, mimicking programs currently underway in South Australia and Northern Territory. But industry lobby groups and unions have presented a united front against plans, with the Australian Food and Grocery Council claiming it would effectively be “a tax on drinks”.

Crikey spoke to Damien Giurco, research director of the Institute for Sustainable Futures at the University of Technology Sydney, to get a better understanding of the success of cash-for-containers …

What are the benefits of a cash-for-containers program?

For a start it will help improve the rates of effective away from home recycling, says Giurco. On a larger scale, gathering recyclable material will assist in capturing the value of the resources. Cash-for-containers programs provide appropriate gathering points for what will become essential materials, ensuring that they do not end up wasted in landfill.

“It only takes 5% of energy to re-melt an aluminium can compared to the energy it takes to mine and refine it in the first place,” explained Giurco.

In Sydney, some waste is trucked more than 100kms to outside the CBD for processing. Providing easy-to-access depots could cut some of the associated transport costs. Plus, individuals can benefit financially from collecting bottles.

Do other countries have these programs and do they work?

Sweden, Germany, Norway, Belgium, Denmark and even some states of the United States and Canada have refund schemes. Belgium boasts the highest rate of recycling in Europe, with 79% of packaging waste recycled. South Australia has a scheme already in place and some of the best recycling rates in the country.

Will this raise the price of drinks?

All indications are that a price rise will be minimal. Environmental group KESAB explained the scheme in a fact-sheet:

“The beverage filler or manufacturer supplies the beverage to the retailer, the 5c deposit plus handling fees, which range from 29 to 45c per dozen, are included into the wholesale price. The filler withholds this money until the agent for the beverage fillers makes a claim from sales figures supplied by them.

“The retailer then sells the beverage to the consumer with the deposit and handling fees included in the retail price. Later the consumer returns the empty container to recycling depots or alternative collectors, and receives a refund on the 5c deposit. The deposit on discarded containers becomes available to anyone who collects and returns it to a Collection Depot or alternate collector.”

This indicates why the packaging and drinks industries are lobbying so heavily against the scheme — the wholesale price of drinks is raised but they do not make a real profit due to the mandatory 5 or 10c refunds. It is not a direct tax on the consumer but to offset any price rises people must return their empties for refund.

A quick comparison of liquor prices in Adelaide and Melbourne on Coles Online’s pages suggests that there is a slight difference in price, with the most dramatic fluctuation being a slab of Carlton Draught which costs $53.50 in Melbourne and $57.78 in North Adelaide.

Don’t Australians recycle enough already?

Australian Bureau of Statistics data from 2009 shows that 98% of Australians recycled at least one item per year. But gauging how much is actually meaningfully sorted fluctuates between states. There is also the difference between away from home recycling and household recycling, and little data is available that differentiates between the two.

Are there other options?

An alternative that lobbying groups and unions are supporting is the National Bin Network, a rollout of bins and recycling plants funded to the tune of $100 million by the packaging industry. While more bins and increasing the number of recycling plants is ultimately a positive for recycling as a whole, it does not completely address the issue of away from home recycling.

According to the Australian Food and Grocery Council, it’s a “70s solution to a 70s problem”. Is that true?

South Australia first began its scheme in 1975, so you might think so. However, the Northern Territory introduced the program this year, promoting it with a funky song. According to the NT government, the scheme provides an incentive for recycling and it even offers some creative ideas to encourage it — such as community groups interested in fundraising can set up Donation Collection Points where bottles are dropped off and the money is donated to them instead.

It has nevertheless run into problems since the launch, and some depots have reportedly been closed due to arguments with drinks companies over handling fees.

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