UK faces tidal wave of plastic if ‘poorly designed’ Deposit Return Scheme (DRS) is adopted

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  • Plastic packaging would dominate supermarket shelves under flat rate DRS
  • 60% of shoppers would switch from endlessly recyclable aluminium cans to plastic bottles
  • Food and beverage waste would continue to rise unnecessarily

UK supermarket shelves could be awash with plastic packaging, replacing billions of endlessly recyclable beverage cans, if the UK adopts a flat rate deposit return scheme (DRS). That is the key finding from the Aluminium Packaging Recycling Organisation (Alupro), which has today (27 January) launched an extensive report analysing the implications of a poorly designed national scheme.

Developed in partnership with independent think-tank London Economics, alongside experts from across the UK packaging sector, the document analyses the environmental and economic implications of implementing a flat rate versus a variable rate deposit fee.

Aiming to tackle plastic pollution, increase recycling rates, improve recyclate quality and minimise litter, England, Wales and Northern Ireland’s long-awaited DRS is expected to come into force in 2023. The scheme will see a deposit value added to the price of a beverage product in store, which will be refunded to the customer when empty packaging is returned to a designated collection point.

While a variable rate fee would see containers allocated with a deposit value based on container size, a flat rate model would apply a fixed fee to all beverage containers. This unsophisticated approach could see customers charged an additional £4.80 for a 24-can multipack (on top of product purchase price) compared to just 80p for a 2 litre plastic bottle, which research suggests would result in 60% of shoppers opting for larger, cheaper, but much less sustainable plastic alternatives.

Alongside the price hikes and increase in plastic packaging, Alupro’s report uncovers a number of wider concerns posed by a flat rate model. Indeed, modelling suggests that a fixed fee model would result in 10% lower return volumes in total than a variable rate system. Conversely, a variable rate system would see the government achieve their 90% return rate almost a year earlier, leading to a higher recycling rate and less litter on the streets.

In addition, demand for aluminium cans – the world’s most widely recycled beverage container – would likely fall by c.11%, resulting in the industry being hit with an annual production shortfall of 4.7 billion units and the very real possibility of plant closures. With >75% of aluminium cans recycled every year, this would not only impact upon the UK’s national recycling rates, but also our thriving aluminium production industry.

Furthermore, with shoppers substituting convenient multipacks for cost-effective (but often impractical) large bulk containers, the UK could see a significant increase in portion sizes, or experience an immediate and unnecessary hike in product waste.

Rick Hindley, executive director at Alupro, commented: “While we are fully supportive of a well-designed DRS, research surrounding best practice design is limited. Our report aims to fill the gap and provide extensive modelling into the real-world implications of differing deposit fee options.

“While some may think that a flat rate deposit fee would be easier to implement, this isn’t necessarily the case. What’s more, it would result in a tidal wave of unnecessary plastic – a key issue that the scheme is fundamentally trying to solve. If the UK adopted a variable rate DRS, demand for plastic would drop notably. What’s more, we would see significantly higher return rates in the first two years of DRS operation and limited impact on portion size or product waste.

“Our concern is that simplicity will override sustainability in senior-level decision making. As such, we are imploring the government to take our statistics and modelling into close consideration when discussing the design of the UK’s DRS.”

Read the report summary here

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Aluminium industry faces plant closures if ‘poorly designed’ Deposit Return Scheme (DRS) is adopted

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The UK’s thriving aluminium industry, which employs more than 20,000 workers nationwide, would be stung with an annual production shortfall of 4.7 billion units and the very real possibility of plant closures if the UK adopts a flat rate deposit return scheme (DRS). That’s one of the key findings from the Aluminium Packaging Recycling Organisation (Alupro), which has today launched an extensive report analysing the implications of a poorly designed national scheme.

Developed in partnership with independent think-tank London Economics, alongside experts from across the UK packaging sector, the document analyses the environmental and economic implications of implementing a flat rate versus a variable rate deposit fee.

Aiming to tackle plastic pollution, increase recycling rates, improve recyclate quality and minimise litter, England, Wales and Northern Ireland’s long-awaited DRS is expected to come into force in 2023. The scheme will see a deposit value added to the price of a beverage product in store, which will be refunded to the customer when empty packaging is returned to a designated collection point.

While a variable rate fee would see containers allocated with a deposit value based on container size, a flat rate model would apply a fixed fee to all beverage containers. This unsophisticated approach could see customers charged an additional £4.80 for a 24-can multipack (on top of product purchase price) compared to just 80p for a 2 litre plastic bottle, which research suggests would result in 60% of shoppers opting for larger, cheaper, but much less sustainable plastic alternatives – resulting in an immediate decline in demand (c.11%) for easy-to-recycle aluminium cans.

Alongside the implications for aluminium beverage can demand, Alupro’s report uncovers a number of wider concerns posed by a flat rate model. Indeed, modelling suggests that a fixed fee model would result in 10% lower return volumes in total than a variable rate system and plastic could become the most used beverage packaging on supermarket shelves.

Furthermore, with shoppers substituting convenient multipacks for cost-effective (but often impractical) large bulk containers, the UK could see a significant increase in portion sizes, or experience an immediate and unnecessary hike in product waste.

Conversely, a variable rate system would see the government achieve their 90% return rate almost a year earlier, leading to a higher recycling rate and less litter on the streets.

Rick Hindley, executive director at Alupro, commented: “While we are fully supportive of a well-designed DRS, research surrounding best practice design is limited. Our report aims to fill the gap and provide extensive modelling into the real-world implications of differing deposit fee options.

“While some may think that a flat rate deposit fee would be easier to implement, this isn’t necessarily the case. What’s more, it would result in a whole host of negative implications – a number of which the scheme is fundamentally trying to solve. Our concern is that simplicity will override sustainability in senior-level decision making. As such, we are imploring the government to take our statistics and modelling into close consideration when discussing the design of the UK’s DRS.”

To read the full report click here

 

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2020 – record year for aluminium packaging recycling

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According to preliminary figures released by the Environment Agency earlier this week (11 January), the volume of aluminium packaging collected for recycling in the UK reached its highest ever level in 2020.

While reprocessors and exporters have until the end of the month to report their final annual tonnage, data from the National Packaging Waste Database (NPWD) highlights that 145,035 tonnes of aluminium packaging was collected for recycling in the UK last year* – a 24% increase compared to 2019 (28,365) and exceeding the 2020 target by more than 26%.

Aluminium packaging collected through kerbside, bring and on-the-go systems increased year-on-year, while tonnage recovered from incinerator bottom ash experienced a significant uplift. While 2020 proved a positive year for recycling rates across the board, aluminium set the standard by exceeding its obligation by a larger percentage than any other material type.

Rick Hindley, executive director at Alupro, commented: “While only preliminary figures, I was delighted to read the latest data published on the NPWD. The past 12 months have seen a significant increase in the volume of aluminium packaging collected for recycling, which should be seen as a considerable achievement.

“Alongside reaching its highest recycling rate on record, the industry has exceeded its obligated targets by more than 30,000 tonnes – a notable increase year-on-year and considerably higher than any other material type. Such an impressive increase is not only a direct impact of COVID-19 and the resulting national lockdowns, but also suggests increased public awareness about the widespread benefits of best practice aluminium recycling.

“Despite the challenges of the pandemic, we have continued to run our highly successful MetalMatters and Every Can Counts behavioural change programmes across multiple locations nationwide. Both have proven instrumental in engaging with householders about how quick, simple and beneficial it is to recycle aluminium packaging.

“Looking ahead to the first quarter of 2021, we predict the ongoing impact of COVID-19 (and ongoing lockdown restrictions) to drive continually high aluminium packaging recycling rates. However, in line with the predicted return to work and schools, it’s important that we switch our positive habits from kerbside to on-the-go systems – this will prove instrumental to not only meeting obligated targets for 2021, but also realising our ambition of 100% recycling rates across the UK.”

For more information about Alupro, or its MetalMatters and Every Can Counts behavioural change programmes, visit www.alupro.org.uk. To access the latest aluminium packaging recycling data, visit the National Packaging Waste Database (NPWD).

 

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*preliminary 2020 data sourced from the National Packaging Waste Database (NPWD)

Why data quality will prove pivotal to the success of EPR reform

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While a ‘typo’ from DEFRA has seemingly set a hare running regarding delayed timescales, the government assures us that much-needed reforms to the extended producer responsibility (EPR) scheme will be agreed and implemented by 2023. The second round of formal consultations will take place in early 2021, following their delayed release due to Brexit and the COVID-19 pandemic.

One of the four consultations arising from the Resources and Waste Strategy (2018), EPR reform aims to revolutionise how the management of our waste packaging is organised and funded. Incentivising producers to embrace packaging that is easily reused, dismantled or recycled at end of life, it will replace the existing system, which has been in place since 1997.

With a ‘full net cost’ system proposed, reform will see producers pay the entire cost of managing their packaging at end of life – from collection, transport and recycling, to the clean-up of littered items, consumer education and disposal of non-recyclable items. Currently, UK packaging producers only pay a small percentage of these costs, with local authorities picking up the remainder.

However, while this system has been widely agreed as the most effective solution, it’s only fair that producers know exactly what they’re paying for through a completely transparent mechanism that accurately apportions responsibility. The quality of data is imperative to setting these parameters, as well as ensuring that every material ‘pays its way’.

 

Eco-modulation and its pivotal role

To ensure fair and effective implementation of the full net cost model across the packaging industry, eco-modulation is perceived to be the most viable mechanism to allocate fees. A relatively simple principle, eco-modulation dictates a fair structure through analysing the total cost of managing packaging (at end of life) and ensuring that producers refund the expenditure that their products create.

Materials that are considered more difficult to collect, transport and recycle (such as pouches and laminates) are given a higher rate of tax; while fees for more sustainable, easy to recycle materials (such as aluminium foil trays) are suitably lower. This approach not only fairly spreads the cost of managing end of life waste costs, but also incentives circular economy thinking and penalises the outdated ‘take, make, dispose’ model.

 

Data accuracy and EPR implementation

Although eco-modulation seems the shining light in EPR reform, the calculations behind the system are critical to ensure fairness and equality among different material types. In the UK, the scheme administrator will be responsible for analysing end of life costs and defining a fee structure accordingly. Understanding the costs faced by local authorities is therefore critical.

This is where the value of transparent, accurate, quality data becomes pivotal. Up-to-date, accurate insight into key variables is the backbone of EPR reform, not just a nice to have. To create an effective structure, the scheme administrator needs granular insight into the following areas (as a minimum):

  • The volume of material placed on the market (by type and by producer)
  • The amount of packaging collected by local authorities and businesses
  • True recycling rates (by packaging type, per local authority)

Without sufficient data, it would be almost impossible to accurately calculate the full net cost of recycling. Fee structure would become reliant on broader estimates, which has the potential to create inaccuracy across the system. Resultingly, easy-to-recycle items could end up subsidising the harder-to-recycle items – a scenario that we must avoid.

 

The trouble with national data quality

But while quality is key, the UK’s dated processes mean that disaggregated, decentralised and non-standardised data is unfortunately commonplace. Local authority insight is poor, with collections assessed by analysing tonnes of recyclate as a percentage of total waste (via tools such as WasteDataFlow) and very few providing accurate insight into specific material types (and volumes).

The only other national data source available is the National Packaging Waste Database (NPWD), which assesses performance against whether enough packaging recovery notes (PRNs) have been issued to cover the packaging placed on the market. Unfortunately, both databases are populated by both local authorities and independent packaging companies simultaneously. Data entry is open to interpretation, with different rules applying to different geographies and no enforceable penalties incurred for missing data or late entry.

Good quality data is critical, but infrastructure is alarmingly lacking. In result, our ‘reformed’ EPR system could be based on wildly inaccurate data. Setting a baseline will be challenging, nigh on impossible, if we rely on a flawed data management system developed almost 30 years ago. It is simply inadequate for the task in hand.

 

Finding a solution to drive successful EPR reform

So, while our national focus continues to shine a spotlight on rushing through EPR reform, maybe we need to take a step back and evaluate whether we have the data in hand to effectively design a fair and effective solution in the first place. The worst case scenario would be using inaccurate data to create yet another poorly-functioning EPR scheme that doesn’t deliver upon the objectives it aims to tackle – in essence, taking two steps sideways, not forward.

But while this view may seem negative, creating a process to capture and manage data correctly should be a relatively simple task. All we need is a strong, single system that everyone is mandated to use. This system should be backed by clear rules and deadlines, all of which should be set and enforced by a credible scheme administrator who has the authority to effectively design, dictate and manage the system.

A subset of the information should be available to the public, allowing the necessary level of transparency required for scrutiny by all shareholders.

If we were to achieve this feat, it would be possible to not only ensure the smooth reform and implementation of a new EPR scheme, but also a plethora of other waste management schemes under review. Data quality, once again, will prove instrumental to the successful future of our waste management landscape – it’s a subject we that we surely can’t continue to ignore.

 

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