Banking on deposits

South Australia has a very established deposit-refund scheme that has been operating since the ’70s.
Susanna Prouse finds out how the system has evolved and whether the rest of Australia could soon follow suit

SA deposit posterIn 1977, South Australia (SA) responded to rising concerns over recyclable waste ending up in landfill and rivers by introducing the Container Deposit Legislation (CDL) under the Beverage Container Act. 

Under the system, South Australian residents can return aluminium cans, PET (plastic), liquid paperboard cartons, glass and high-density polyethylene plastics/mixed plastic containers (including multi-layered packaging types such as plastic and foil pouches) at over 124 collection depots across the state. 

Advocates for the CDL embrace it as both a means to reduce litter and as part of a broader approach to waste minimisation, resource conservation and extended producer responsibility.

When first introduced in the 1970s, residents were incentivised to drop off their used beverage containers for recycling through the reward of five cents for every container returned. The levy remained unchanged until 2008, when SA found that there was an increase in the number of beverage containers in the litter stream and a decline in their return rates. Thus, as an incentive to boost figures, the deposit increased to 10 cents.

And it appears to be working. Speaking to Resource, Ian Hunter, South Australia’s Minister for Sustainability, Environment and Conservation, said the increased deposit has seen the annual percentage of beverage containers returned increase from 69.9 per
cent in 2007/08, to 81.4 per cent in 2011/12.  

Further, according to the Keep South Australia Beautiful (KESAB) Litter Index, at just two per cent, South Australia now has the lowest percentage of ‘container deposit items’ in the Australian litter stream, compared to five per cent in Queensland, just under seven per cent in Victoria and New South Wales and 11 per cent in Western Australia.

The system is overwhelmingly popular with the public too: 2012 research from SA’s Environment Protection Authority (EPA) found that 98 per cent of SA residents supported the scheme, with 97 per cent believing it had been effective in reducing litter in SA. 

GlassThis public support, combined with statistics that show ‘just over 609 million containers, representing 47,510 tonnes, were returned for recycling and diverted from landfill in 2011/12’, promote the CDL’s success. Indeed, SA is so proud of it, that in 2006 it registered its deposit system as a ‘State Heritage Icon’ in recognition of its ‘significant contribution’ to South Australia’s cultural identity.

According to Hunter, the main reason behind the scheme’s success is its ‘convenience’. He says: “Container deposit schemes provide a financial incentive to recycle and/or pick up other people’s litter. It rewards those who do the right thing while those that choose to dispose of the beverage container inappropriately forego the refund.”

However, the scheme is not universally liked, especially by those who have to foot the bill: beverage manufacturers. 

Hunter explains the financial logistics: “The beverage supplier provides funds through a contractual arrangement with a super collector. The super collector subsequently recovers containers from recycling depots and pays the depot the agreed handling fee (which is estimated between three cents and five cents per container), and arranges for the aggregated materials to be sent to scrap/recovery markets.”

Further, under the CDL, beverage manufacturers are required to seek Container Labelling Approval to ‘ensure consumers are aware a refund is available on the container and ensure the industry is responsible for the financial underpinning of the entire collection system’. 

This article was taken from Issue 71

In fact, beverage manufacturers were so against introducing another such system in Australia, that in March 2013, the Northern Territories saw Coca Cola Amatil, Schweppes Australia and Lion quash its container deposit scheme, launched in 2011. The companies determined that it breached Australia’s Mutual Recognition Act 1992, arguing it acted to ‘prohibit’ sales in the Territory. This is unlikely to have a knock-on effect in South Australia, though, as the CDL there predates the 1992 legislation and so is exempt.

Despite this, Jenny Pickles, SA Council Forum Manager, has said that to help reach the SA’s ‘Strategic Plan’ target to ‘reduce waste to landfill by 35 per cent’ by 2020, the council is now pushing for a national industry-funded scheme to increase the availability of recycling points for drink containers and other recyclables. The scheme will allegedly cost $100 million over five years and would co-exist with SA’s deposit system. 

And with Australian ministers agreeing in August 2012 to prepare a regulatory impact statement for implementing a nation-wide container deposit scheme, Australia could well see a future where deposit schemes, or reverse vending machines, are implemented nationwide.

Whatever the outcome, Hunter concludes that “unless a national container deposit scheme is agreed upon and developed”, South Australia will be banking on its own existing deposit system as a permanent fixture of its recycling and reuse strategy.