Australia faces a mounting waste crisis. According to the Australian Packaging Covenant Organisation (APCO), Australia uses nearly 7 million tonnes of packaging every year, with almost half (44 per cent) ending up in landfill. Of the post-consumer packaging that ended up in landfills in 2021-22, 33 per cent was plastic packaging, 14 per cent was glass packaging, and 5 per cent was metal-based packaging. This is why the CDS refund needs to change.
The Australian Government has set ambitious national targets to address this. Established in 2018, the 2025 National Packaging Targets aim for 100 per cent of packaging produced in Australia to be reusable, recyclable, or compostable by 2025. They also include a goal for 70 per cent of plastic packaging to be recycled or composted and a mandate requiring an average of 50 per cent recycled content in packaging by the same deadline. Despite some progress, recent data indicates that achieving these targets is unlikely.1 While 84 per cent of packaging (plastic, cardboard, metal) is recyclable, less than 20 percent of plastic packaging is actually recycled.2
Australia needs a regulated packaging scheme that covers the net costs of recycling and pushes used packaging through from collection to end markets. Reloop looks forward to working through 2025 with our federal colleagues to realise this potential. Meanwhile, we have state-based CRS-EPR schemes on beverage containers that are among the least effective in the world.
In 2022, Australia’s State Heads of EPA’s (HEPA) released consumer studies3 that demonstrated a combination of collection point inconvenience and the low $0.10 CDS refund value were the key obstacles to consumer participation in Australia’s schemes and the resultant low and stagnating return rates.
This article looks at why consumers did not engage in a CRS, and outlines key data sets for this conclusion.
In November 2023, HEPA also committed to ‘assessing the regulatory impacts of increasing the CDS refund value’4, as part of a suite of measures to rebuild consumer participation, though like the CRS return rates, this policy process seems to have stagnated.
Beverage containers — aluminium cans, plastic bottles and glass — are among the most recyclable materials in Australia, yet billions still end up as waste each year. According to Reloop’s What We Waste Dashboard, Australia wasted an estimated 3.9 billion recyclable beverage containers in 2024 – enough to fill the Sydney Opera House twice. On a per capita basis, this equates to 146 wasted containers per Australian, including 58 glass bottles, 46 metal cans and 42 PET bottles. Over the past decade (2015-2024), the total waste amounts to an estimated 54.3 billion containers, including 15.2 billion PET bottles, 17.3 billion metal cans and 21.7 billion glass bottles – equivalent to 8.7 million tonnes of material lost to disposal or the environment. This waste represents a market value of $657.7 million.
If current collection for recycling rates remain unchanged, Reloop projects that Australia will see another 20.2 billion glass, metal, and PET beverage containers between 2025 and 2029 littered or landfilled. Deposit return systems (DRS), referred to as “container deposit’ or “container refund schemes” (CRS) in Australia, offer a solution. Currently operating in 57 jurisdictions worldwide, these systems incentivise recycling by attaching refundable deposits to beverage containers, which are returned to consumers when the empty container is brought back to designated collection points.
Since South Australia pioneered CRS in 1977, nearly every state and territory has followed suit. Victoria’s long-awaited CRS kicked off in November 2023, making it the last state on mainland Australia to introduce such a system, and Tasmania’s CRS is set to launch in May this year following several delays. This milestone will make Australia the first continent to achieve full CRS implementation.
Despite this progress, untapped potential remains. By expanding and modernising these schemes, Australia could increase recycling rates, reduce waste, and recover millions of dollars in valuable materials for the circular economy.
Reloop estimates that if a national best-in-class CRS – designed to achieve a 90 per cent return rate – were introduced in states across Australia today, an additional 11.4 billion units of beverage containers could be recovered from 2025 to 2029 instead of being lost to landfill and the environment. This would equate to an additional 1.5 million tonnes of glass, metal, and PET containers recycled over the five-year period, which, at 2024 prices, would hold a market value of approximately $178 million. Beyond its economic benefits, it’s projected that a best-in-class system could prevent more than 887,000 tonnes of CO2e (carbon dioxide equivalent) emissions — equivalent to avoiding the burning of 447,064 tonnes of coal or saving nearly 378 million litres of petrol. Furthermore, it would provide brand owners with a more reliable supply of recycled materials, enabling them to meet both voluntary and legislated recycled content targets.
What can be done to improve their performance?
Reloop’s Global Deposit Book 2024, released in December, highlights room for improvement in Australia’s container refund schemes. In 2023, the median return rate for CRS-eligible beverage containers across Australia – including those collected via kerbside recycling and material recovery facilities (MRFs) – stood at 68 per cent (see Figure 1). When MRF collections are excluded, aligning with the reporting standards of most container refund schemes worldwide, the median return rate drops further to 55 per cent.
These figures fall short of global benchmarks. The European median return rate, which reflects only containers returned through CRS collection points, is 89 per cent, while Canada’s median stands at 76 per cent
Boosting beverage container recovery in Australia’s CRS programs is within reach. Several international deposit systems have already achieved return rates exceeding 90 per cent, including Germany (98 per cent), Finland (96 per cent), and Denmark (93 per cent). With the right improvements, there is no reason Australian states and territories cannot reach similar levels of success in container recovery.
Reloop’s analysis of more than 50 deposit schemes worldwide highlights three critical factors that impact return rates and can help explain Australia’s lagging performance.
Deposit/refund values:
Research across multiple jurisdictions highlights a clear and consistent link between higher deposit/refund rates and increased return rates. Figure 2 illustrates this strong positive correlation. The data shows that systems with a minimum refund value of $0.20 achieve the highest return rates, underscoring the importance of adequate financial incentives in driving consumer participation.
Figure 2. International CRS Return Rates Compared to Minimum Refund Values, in Australian dollars (includes material collected from kerbside recycling programs/MRFs in Northern Territory and South Australia).
Currently, all Australian deposit schemes offer a $0.10 refund per eligible container. This is much lower than deposit rates in most leading international CRS programs where return rates exceed 90 per cent, such as Germany ($0.42), Norway ($0.28-$0.42), Finland ($0.17-$0.66) and Denmark ($0.22-$0.67) (see Figure 3). This disparity is particularly notable given Australia’s economic standing relative to these countries (see Figure 4). When adjusted for purchasing power parity (PPP), which accounts for differences in relative purchasing power across jurisdictions, Australia’s GDP per capita is higher than three of the leading international container refund schemes. In 2023, Australia’s GDP per capita (PPP) was 55 per cent higher than Slovakia’s, 30 per cent higher than Lithuania’s, and 8 per cent higher than Finland’s⁵.
Figure 3 Refund Values vs. Overall Return Rates in Leading International CRS vs. Australian Schemes
Figure 4 GDP per Capita (PPP) (Current International $), Australia vs. Leading International CRS Countries, 2023
Aside from being well below comparable European deposit rates, there’s also the fact that refund amounts in Australian CRS programs have not been adjusted for inflation, eroding their value over time. This reduces the incentive for consumers to participate and contributes to return fatigue, where the effort of returning containers outweighs the perceived reward.
Consumers broadly are highly supportive of a CDS refund increase. As a 2024 survey outlined, across all political persuasions 83 per cent of the electorate supports a refund increase and just 7 per cent opposed⁶.
Convenient return processes: Next to CDS refund values, the accessibility of return options also plays a critical role in system performance. Jurisdictions that utilise a return-to-retail (R2R) model — where retailers are legally required to accept container returns and provide refunds — achieve a median return rate of 84 per cent (Figure 5). This is higher than the 69 per cent median return rate in jurisdictions that rely on depots or hybrid models.
Figure 5 Latest Return Rates in Container Refund Schemes for Single-use Beverage Containers, by Redemption Model (excludes material collected from kerbside recycling programs or material recovery facilities [MRFs])
In Australia, some CRS programs (primarily Queensland, South Australia, and Western Australia) follow a largely return-to-depot model, requiring consumers to return containers to stand-alone depots (often located in industrial precincts rather than convenient locations for consumers) to receive their deposit refunds. New South Wales (NSW), Victoria, and soon Tasmania, operate a hybrid model that includes depots alongside voluntary retail return points. However, unlike leading international CRSs, where return-to-retail (R2R) is mandated by law, Australia’s retail collection points are voluntary. This means retailers are not legally required to accept container returns, and where retail-based reverse vending machines (RVMs) do exist, they are limited in number, often located outside rather than in-store, and not universally available. As a result, hybrid and return-to-depot models in Australia are generally less convenient than legislated R2R systems, which provide consumers with a guaranteed option to return containers at the same locations where they shop.
Compounding this issue, the number of return points per capita in Australia is low compared to leading international schemes (see Table 1). This limited accessibility reduces convenience and hampers the overall effectiveness of Australia’s CRS programs.
Table 1. Accessibility Metrics in Australian CRS vs. Leading International Schemes, 2023
Comprehensive scope: Schemes with broad scopes that include a variety of beverages and container types achieve higher return rates. For example, New York’s experience demonstrates the impact of expanding program coverage. When water bottles were added to its system in 2009, the number of PET plastic containers returned for recycling doubled, according to a 2021 report⁷. Similarly, Denmark offers a compelling case. Despite already achieving a world-leading beverage packaging recycling rate of 90 per cent in 2018, the Danish government expanded its scheme in 2020 to include single-use juice and concentrate bottles. This expansion was projected to result in an additional 52 million bottles being recycled annually, increasing the schemes’ recyclable packaging volume by 4-5 per cent⁸.
In contrast, many of Australia’s CRS programs exclude key categories such as wine and spirit bottles, as well as non-carbonated beverages like milk and juice. These exclusions not only limit the volume of recyclable materials captured but also contribute to consumer confusion over which containers are eligible for a refund, potentially discouraging participation. Expanding the scope to include these containers would reduce uncertainty, encourage greater engagement, and unlock untapped potential –boosting recovery rates and ensuring more packaging waste is diverted from disposal.
Consumers are generally also more likely to participate in CDS schemes if they cover a more complete range of beverage products. The following paper from WA’s Curtin University outlined this consumer preference in 2022⁹.
Greater container eligibility was a recurring theme throughout the survey and a key barrier to CDS uptake, with many participants taking the opportunity to express their frustration at the lack of eligible containers. Overall, 87 per cent of survey participants would participate more in the $0.10 refund scheme if wine bottles, milk cartons, cordial/syrup containers and alcoholic spirits were eligible for a $0.10 refund (Figure 9). This response was split evenly across the respondents, regardless of their past, current, or non-existent use of the CDS. This reflects the demand and the need for including more items to motivate individuals to participate in CDS.
Why increasing refund values boosts recovery rates
To unlock Australia’s potential for higher recovery rates, and in the absence of a revised legislative mechanism to require retail take-back, raising refund values stands out as the most effective strategy. Evidence from schemes worldwide demonstrates that higher refunds directly correlate with increased return rates, offering a proven solution to address current gaps in performance.
South Australia provides a compelling case study. In September 2008, the state government doubled the refund on beverage containers from $0.05 to $0.10, leading to a sharp rise in return rates. Within a year, the return rate climbed from 69.9 per cent to 76 per cent, reaching 80 per cent by 2009-10 and eventually peaking at 81.4 per cent (Figure 6) – a total increase of 16 per cent following the refund hike. This data highlights the effectiveness of financial incentives – when the value of the refund increases, consumer participation rises accordingly.
Figure 6 Impact of Refund Increase on South Australia’s Return Rates
Both Oregon (United States) and Alberta (Canada) provide additional compelling evidence of how increasing refund values can drive improvements in beverage container recovery. In Oregon, return rates had stagnated at around 60 per cent between 2014 and 2016. However, in 2017, the state doubled its deposit from $0.08 to $0.16, resulting in a turnaround. By the end of that year, the return rate had surged to 73 per cent, eventually reaching 86 per cent by 2019 (Figure 7). Similarly, the province of Alberta increased its deposit at the end of 2008 which led to a 10 percentage-point increase in the overall return rate by the end of 2009 (Figure 7) 10.
Figure 7 Impact of Deposit Increase on Beverage Container Return Rates in Oregon’s CRS, 2012-2023
Figure 7 (2) Impact of Deposit Increase on Beverage Container Return Rates in Alberta’s CRS, 2004-2023
Turning to Europe, in September 2018, Norway implemented a doubling of its deposit rates, raising the fee for containers under 500ml from $0.14 to $0.28 and for containers over 500ml from $0.28 to $0.42. This adjustment had an immediate impact: within two years, return rates surged across all material types. The return rate for cans increased from 84 per cent in 2017 to 93 per cent by 2020, while plastic bottles rose from 88 per cent to 92 per cent. Overall, the system’s return rate climbed to 92 per cent in 2020, up from 87 per cent in 2017 (Figure 8) ¹¹.
Figure 8 Impact of Deposit Increase on Material Return Rates in Norway’s CRS, 2015-2023
Despite achieving a high return rate of 88.5 per cent, the Swedish DRS operator announced in January this year that it will be increasing deposit values to ensure compliance with its mandated 90 per cent return rate target. As of September 2025, deposits on aluminium cans and small PET bottles will be increased from $0.14 to $0.29, and for large PET bottles, from $0.29 to $0.43. This decision was driven by the goal of not just meeting but exceeding the 90 per cent threshold, as Sweden’s 2023 return rate stood at 88.5 per cent and 2024 figures are expected to be even higher. This is not Sweden’s first deposit increase; since the system’s establishment in 1984, the deposit on metal cans has been raised twice – once in 1987 and again in 2010. Additionally, Sweden has expanded its program’s scope over time. Initially limited to metal cans, the system began covering plastic PET bottles in 1994 and, as of January 2023, includes all fruit syrup and juice containers.¹²
Why aren’t Australia’s refund values high enough?
At $0.10, Australia’s refunds values were already too low, and inflation has further eroded their real value, weakening their effectiveness as a financial incentive. Figure 9 shows how South Australia’s $0.10 refund value, set in 2008, would compare today if adjusted for inflation. To maintain its original purchasing power, the CDS refund would need to be raised to $0.15 in 2024.
In other words, the $0.10 CDS refund now holds the equivalent purchasing power of just $0.05 – a 46.5 per cent reduction in value due to inflation.
These figures are based on calculations using the Reserve Bank of Australia’s inflation calculator, which adjusts historical amounts to current values using the Consumer Price Index (CPI). The CPI measures average price changes over time for a basket of goods and services. Without inflation adjustments, CDS refund values steadily lose their impact, diminishing the financial incentive to return containers and contributing to “return fatigue.” Consumers may begin to question whether the effort of returning containers is worth a reward that feels increasingly insignificant.
Restoring the deposit value to at least $0.15 would help revive its financial appeal and reinstate the effectiveness seen when South Australia increased its refund to $0.10 in 2008. At that time, the higher refund helped boost return rates from 70 per cent to 80 per cent within just two years (2009-10). Without such adjustments, the incentive to participate in container refund schemes will likely continue to wane, further challenging efforts to improve recovery rates.
Figure 9 What South Australia’s Refund Value per Container Would be in 2024 if it Had Kept up with Inflation
But if we want to get to global best practice of 90 per cent-plus we have to start looking to a CDS refund value of $0.20 to $0.30 and ensure a mechanism is in place to maintain parity with CPI over the coming decades.
The path to higher recovery rates
Australia’s recycling system stands at a pivotal moment. With stagnating recovery rates and the loss of valuable materials to the circular economy, the need for systemic change has never been more urgent.
Among the most effective solutions are container refund schemes that align with global best-in-class principles, offering a proven path to addressing these challenges.
By modernising its CRS programs through higher CDS refund values, broader coverage of beverage containers, and improved accessibility for consumers, Australia can unlock the full potential of these schemes. These enhancements would not only drive higher recycling rates but also recover $178 million dollars in material value (from 2025-2029) currently lost to landfills and the environment, transforming the nation’s recycling landscape.
Encouragingly, progress is already underway. In April 2021, Australia’s environment ministers committed to harmonising CRS programs across all states and territories by the end of 2025 and HEPA has previously suggested starting a regulatory impact process to assess increasing the refund.
These initiatives also include expanding the scope of eligible containers, increasing public participation, and aligning schemes to maximise recovery and recycling rates. While the specifics are still being finalised, increasing CDS refund values as part of this harmonisation effort would boost the perceived value of recycling and incentivise greater participation.
While an increased CDS refund across the country would be ideal, there should be nothing to prevent individual jurisdictions acting unilaterally. Such an approach was evident throughout the years of South Australia being the only state with a CRS and is now also apparent as wine and spirit glass containers are incorporated into new state schemes as those policy decisions are taken.
To remain competitive in a world transitioning toward a circular economy, Australia must align its CRS programs with international best practices. Achieving a 90 per cent return rate – a milestone already reached by numerous European countries – will require bold action. Increasing CDS refund values and expanding program scope to include more beverage and container types are essential steps to ensuring Australia’s recycling system meets its full potential.
Samantha Millette is the research and analysis manager for Reloop Platform, an international nonprofit organisation focused on advancing circular economy initiatives.
Robert Kelman is the director of Reloop Pacific.