Features, Opinion

South Australia’s CDS reform needs direction

At 77 per cent recycling, South Australia’s container deposit scheme (CDS) is in the bottom third in terms of global performance. Most European (and a couple of US) schemes recover well over 90 per cent and Germany sits at 98 per cent. Assuming return rates are the arbiter of a scheme’s success, the recent SA draft CDS reform paper is welcome, providing a comprehensive assessment of the state’s CDS.

However, notably absent from the paper is exactly what the overall goal of the Government’s reform agenda is. Setting a direction, say a return rate target of 95 per cent by 2025, would be useful for stakeholders and the industry. I believe the SA Government needs to then lock in the changes required to reach it. What we do know is that the SA Government is seeking to build on the state’s circular economy (CE) agenda by achieving higher rates of recycling from the state’s CDS. The government recently released a reform paper that outlines what could be done and includes:

  • shifting some portion of eligible containers out of the kerbside system;
  • adding to the scope of eligible CDS containers; and
  • increasing consumer engagement in the scheme.

It’s progressive thinking to posit shifting material out of the kerbside bin. This mass of variable materials has been a problematic repository and a way for beverage producers to avoid the costs of recovery and recycling. For instance, most of the glass isn’t worth much except to be used as road base, and markets are generally wanting cleaner streams of material.

Adding wine and spirits to the list of eligible containers, as floated in the SA paper, would serve to remove decent quantities of this material out of the kerbside bin (and landfill), into the cleaner and more valuable CDS system for bottle-to-bottle CE outcomes.

Similarly, SA is looking to increase the volume thresholds for products such as alternate and flavoured milks (e.g. soy and almond milks etc). At present, the scheme effectively only covers 600ml LPB containers as the criteria is up to 1litre – so one litre and above is exempt, which accounts for the majority of this material.

The existing SA collection network is well utilised and important, and it needs augmenting if SA is to achieve its policy objectives of growing the success of its CDS. The 130 or so depots across the state have served the scheme well and the CDS helps underpin the economics of many of these sites that also collect other household recyclables such as computers, gas bottles, batteries etc.

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Ensuring the viability of this network is important, and giving disengaged consumers access to some additional collection points to capture an extra possible 15-20 per cent of containers would lift SA into the world rankings of scheme performance.

There are two principal features of successful CDSs around the world; ease of consumer access or convenience of the collection network, and the value of the refund. Both of these consumer engagement mechanisms need improving in SA and elsewhere in the country.

The SA paper outlines there is just one collection point per 13,400 people. Across Europe this ratio ranges around one collection point per 1,000 people. SA and all other Australian states and territories need much higher numbers of these facilities.

But it’s not just a numbers game. Convenience means collection points that are open when and where people naturally spend time rather than special trips to remote corners of a city. The paper outlines that SA consumers tend to sit on their containers for long periods – returning on average 210 containers every 2-3 months. Redeeming containers is therefore a periodic and specific task rather than a week-to-week activity incorporated into existing shopping habits. It should be made easier.

Beverage industry control of Australia’s CDSs is now at the core of the policy debates across all states and the SA paper begins examining mechanisms to loosen this grip on their scheme. As a reminder: For every 10 per cent less recycling in Victoria’s CDS, drink producers would have saved around $50 million per annum through avoided refunds and recycling fees. This is big-coin, and significant enough motivator for producers to try and control a state’s CDS to keep return rates suppressed.

By only allowing a relatively inconvenient network of collection points to be established or maintained, and/or advocating to keep the refund value low, big beverage producers achieve lower rates of consumer engagement and therefore return rates than would otherwise be the case.

NSW, the ACT and soon Victoria and Tasmania have dealt with this obvious conflict of interest by directly contracting the recycling industry for collection networks inherently motivated to maximise return rates, as they get paid per container collected.

The paper goes into some detail on possible governance changes to the SA CDS. As an example of producer control over SA’s CDS, it’s the beverage-owned ‘super collectors’ that decide who gets a ‘waste management agreement’ (WMA). These allow a collection point operator to get paid for their containers. Super collectors have then used control of these WMAs to block new entrants to the collection network in SA. Perhaps the EPA should licence and approve these WMAs instead and allow for the growth in size and convenience of SA’s collection network?

Finally, Australia’s 10 cent refund on CDS containers is losing its ‘value’ by the day and must be raised if we are to expect return rates above 80 per cent in any state. While we have a similar GDP per capita to Germany and much of northern Europe, our refund value is three to four times lower. SA’s leadership nationally on this issue is about pushing this value up. With a clear forward schedule of refund value increasing over the coming years to deal with inflation, this would be valuable.

Reforming SA’s CDS is overdue, though timely. This agenda offers SA an opportunity to build on its heritage, offer consumers better scheme access and engagement, an opportunity to implement its CE agenda, and also help guide other states in getting all Australian schemes up and out of the lower rankings.

Robert Kelman is the director Asia Pacific, Reloop Platform