Security and deposit systems for packaging
In the coming years, we will face several in-depth reforms that will revolutionize the municipal economy and the recycling market. The goal is simple: bring it closer to the circular economy and deal with the excess of waste, especially plastic packaging, which is growing every year at an exponential rate. It is estimated that Poles throw away more than 3 million tonnes of plastics and aluminium each year, in which everyday products are packed. More than half of which is disposable beverage packaging (including PET bottles and aluminium cans).
Today, they are collected together with other waste under the current municipal system and divided into five fractions. Local governments are responsible for collecting these fractions and indirectly for their subsequent processing. Unfortunately, such results are not enough. In 2018, the expected level of recycling achieved in Poland was 30%. However, approximately 300 municipalities did not manage to achieve this rate. Many experts emphasize that even 30% is an exaggeration, because real recycling (not the one declared on paper) fluctuates around a dozen or so percent. Despite the obligatory segregation, the vast majority (63-73%) of waste is still sent to the sorting plant as mixed waste, from which it is impossible to effectively sort more than a dozen or so percent of valuable raw materials suitable for processing.
This is unfavourable for the entire market: not only municipalities that have to meet the recycling level, but also recyclers and producers from the food industry. The latter of which will be hit by the requirements of the SUP (Single-Use Plastics) directive the most. It should be implemented into national regulations as early as July. Contrary to popular belief, it introduces not only a ban on the sale of plastic straws and other disposable products, but above all it will oblige those introducing products in packaging to be more involved than today in collecting beverage bottles (90% by 2030) and will impose an obligation to use 30% recyclable materials in each newly made PET bottle.
Experts agree that the current system will not allow us to meet these requirements. The market lacks pure and domestic raw material that would be suitable for contact with food and could be used on the scale of the expectations set out in the directive. In Poland, over 240 thousand tonnes of PET bottles are marketed, only 50% of which are recycled. At the current collection rates for plastic drinks packaging, if the directive were to be applied today, Poland would have to pay a fine of approximately EUR 110 million only for plastic bottles.
EU regulations, including the amended frame directive on waste and the directive on the reduction of the environmental impact of certain plastic products impose specific obligations on Poland:
- in 2020 - 50%, and in 2035 - 65% waste should be recycled,
- by 2025, we must collect a minimum of 77% PET bottles, and by 2030 as much as 90%,
- each PET bottle must contain 25% recycled materials by 2025, and by 2030 - 30%.
- By 2030, all plastic packaging is to be recyclable or reusable.
Packaging waste recycling targets by 2025/2030:
- plastics 50%/55%
- aluminium 50%/60%
- steel 70%/80%
- glass 70%/75%
- paper and cardboard 75%/85%
The security and deposit systems are often considered as one and the same, although they are in fact two complementary solutions that can be implemented simultaneously. The security system - unlike the deposit system - is based on reusable packaging. An example involves returnable glass bottles used in the brewing industry: they are collected and then delivered back to the manufacturer who prepares them for reuse by washing and refilling. (According to 2016 data included in Deloitte's 2017 analysis, up to “91-94% of bottles placed on the market are refilled”). In this case, the purpose of the security system is not to provide a packaging to be recycled, but to reuse the packaging. The situation is different in the deposit system. Its goal is recycling, i.e., processing the packaging into recyclate used in the production of completely new packaging.
This distinction does not actually matter much to the consumer. In both cases, he/she does not have to worry about the further fate of the disposed packaging, but only takes care to throw it into the appropriate machine or return it directly to the store. The deposit systems are used much more often. In Europe, more than 133 million people use them, which is on average one in four people living in the EU. This is just over a quarter of the population. They function in ten European countries: Croatia, Denmark, Estonia, Finland, Germany, the Netherlands, Norway, Sweden, Iceland, and Lithuania. It is possible that other countries will soon join this group: Austria, Belgium, France, Latvia, and Great Britain.
The Polish government was also planning to introduce the system. Prime Minister Mateusz Morawiecki spoke about it in his exposé. In addition, the representatives of the Ministry of Climate and Environment express their supporter to this system. However, no detailed proposals on how these solutions could be implemented were presented.
Good practices and examples
The main goals of implementing the security/deposit system are: promoting environmentally friendly packaging, improving recycling, ensuring access to high-quality and locally produced secondary raw materials, and reducing the amount of waste going to landfills. The point is that the streams of returned packaging should be homogeneous, without any contamination from other fractions (e.g., food scraps), thanks to which they would be a valuable raw material for which relatively high prices can be obtained.
The experiences of other countries that have showed that these goals are achievable as long as the key assumptions are kept. First of all: the system must be universal, easy to use and readable. The consumer must be aware of which goods are covered by the security system and know where and how he/she can return unnecessary packaging to recover the deposit. Such an exchange must not be burdensome or involve practical and logistical difficulties for the residents. In practice, this means that the system should guarantee the possibility of returning the packaging and recovering the deposit in as many stores as possible, not only in the store where the purchase was made.
There are many forms to show that such a system works. Despite the differences regarding, as well as other things, trade structure and population density (for example sparsely populated Finland and densely populated Germany), many security and deposit systems are organized in a similar way. An operator is required for the efficient management of the system. In Norway, Sweden, Finland, Iceland, Lithuania, Estonia, the Netherlands, Denmark (as well as in the planned systems in Slovakia and Scotland), it is a newly established organization associating producer groups and trade organizations, which reports to the institution specified by law, e.g., The Environmental Protection Agency or the Ministry of the Environment. From the Polish perspective, the best-performing systems should be analysed, and proven solutions implemented.
Structural, financial, and organizational barriers
The implementation of the system is associated with several serious challenges, although it may seem simple. When preparing specific regulations, it will be necessary to find answers to questions regarding the financing of the system, the organization model, and the security amount. It will also be necessary to analyse the impact that the introduction of the system will have on the entire chain of entities involved in waste management. In this case, it is not only about stores where recyclates are to be located, but also recyclers, municipal installations, and municipalities.
The role of self-governments can be crucial for the success of the system, especially due to the fact that most municipalities in Poland are rural ones, with a lower population density and different infrastructure than large metropolises. It should be considered that there are many small-area stores in Poland, and the overwhelming majority of European security and deposit systems are based on recyclates located near large-format stores. In the case of smaller units, the problem can involve finding enough space to install the device. A similar problem will also occur in the case of using the model based on manual collection.
The question of the involvement of local governments also has a legal dimension. Currently, municipalities are obliged to achieve high levels of recycling of municipal waste, a large part of which involves packagings, including valuable on the market, because PET bottles are relatively easy and cheap to be processed. It is necessary to analyse whether the exclusion of this fraction from the municipal system under the security system, which would be served by an industry organization established for this purpose, similar to the solutions used, for example, in Norway, will not increase the costs of waste processing in local governments. Plastic waste left in yellow containers, the management of which will still be their responsibility, because they will be worth much less on the market (because it is less attractive for a recycler as a non-uniform raw material). This, in turn, can negatively affect conditions.
In addition, the question is who will invest in the development of the system: setting up the machines and their maintenance? In Lithuania, investment costs amounted to EUR 5 million (until 2016). In Slovakia, in a study prepared by the Institute of Environmental Protection, it was calculated that the operator's investment costs would amount to EUR 15 million. Operating costs are estimated at EUR 33 million. Revenues were calculated at EUR 28 million. The difference, i.e., EUR 5 million, will be covered by packaging producers. However, it should be noted that the countries mentioned are definitely smaller than Poland. With reference to the scale effect, the costs will undoubtedly be much higher.
Author: TOGETAIR Editors