03 - Changing the Culture of Disposability One Beverage Container at a Time

In this episode, Wolfgang Ringel, Senior Vice President of Governmental Affairs at TOMRA, talks Deposit Return Schemes (DRS): the benefits, the challenges, and the future of this tried and tested plastic waste solution.

DRS fits into TOMRA’s holistic approach to waste management (as highlighted in the new white paper, Holistic Resource Systems), and in this episode of TOMRA Talks Circular, you’ll find out exactly how, and why from a man who has spent the past 30 years in the business of climate protection and waste. 

Thought provoking, to-the-point, and from the heart. You don’t want to miss it!

Listen to the episode below, or use your favourite platform (Apple Podcast, Spotify, Google Podcasts)

Show Notes

•    Historic momentum toward sustainability [02:10]

•    Why deposit return schemes are needed now [03:38]

•    Four principles for high-performing systems [06:19]

•    Environmental impact of DRS [9:05]

•    High-quality rPET and Lidl example [10:54]

•    The demand for deposit return systems [13:19]

•    Transparency and data in deposit return schemes [15:23]

•    How retailer investments are recouped [17:43]

•    Impressive scale up in Lithuanian DRS [20:13]

•    The biggest DRS for beverage packaging in the world [22:26]

•    Can DRS work in countries with informal waste pickers? [25:45]

•    What else can DRS collect? What’s next? [26:35]

•    Final thoughts [28:31]

Transcript

Vanessa: Welcome to TOMRA Talks Circular, where we explore how businesses, municipalities, and governments are collaborating towards a circular economy. In this podcast, listeners will learn about deposit return schemes, a waste management technique that is fast gaining momentum for significantly reducing littering of beverage packages leading to some profound ecological benefits. I'm Vanessa Lorenz and our guest today to discuss this topic is Wolfgang Ringle, Senior Vice President of Government Affairs at TOMRA. Wolfgang, welcome.

Wolfgang: Thank you, Vanessa. 

Vanessa: You have watched the worsening pollution and environmental problem both as an individual and as someone who's been at the forefront of the waste management sector for almost 30 years. So how has this whole escalating unfolding crisis affected you personally and professionally?

Wolfgang: Yes, when I started working on waste management topics about 30 years ago, these were no topics at all. Indeed. It must have been around 2007 or so when I read the first article in the German magazine Der Spiegel (German: “The Mirror”) about a giant Pacific Ocean garbage patch north of Hawaii. 

Then documentaries came in showing the devastating impact on marine life, you know, choking birds due to plastics, whales with stomachs filled up with up to 50 plastic bags … again filled with plastic of all kinds. This got me going. And then I learned that almost one third of all marine litter is beverage packaging related. Bottles, cans, straws, lips, cats, and what have you. So, that really got me going. And the indeed amazing connection, between well-working recycling processes and their positive impact on CO2 emissions, I got to know much later. It confirmed me working on the right topics. 

Vanessa: Indeed. I can understand that. But there is some cause for some optimism. There's a sense out there that things are starting to turn. You've got the Paris Agreement … obviously, the European Green Deal, renewed US commitment again. And just recently the federal Constitutional Court and Germany's historic ruling that climate protection is a fundamental right and that all political decisions must be in line with sustainability. How optimistic do you feel when you see global leaders taking this issue so seriously now?

Wolfgang: I think these are good developments. Of course, they are … no doubt. But we need to face the fact that politics and politicians always act due to pressure. So, we need continued bottom-up movements like the Fridays for Future Movement, for example, to keep that pressure high. 

Let me give you an example. You mentioned the federal Constitutional Court ruling here in Germany. This goes back basically to a letter of an 11-year-old girl named Marlene , which she had written to a leading German NGO, asking them to do something to save the future of her and other kids. And indeed, this NGO teamed up with the German Fridays for Future Movement. Marlene became one of the plaintiffs, with the consent of the parents, of course, and they won. And we need this kind of action on a global level in as many countries as possible. Why? Because the only hard currency to protect the environment is legislation.

Vanessa: Another question I've got for you is TOMRA has almost 50 years’ experience in developing waste management practices. And, it's just launched a white paper in which the deposit return scheme is regarded as a key technique to help solving our beverage packaging pollution and carbon dioxide emissions. Can you explain why this technique could be the solution the world is needing right now?

Wolfgang: Yes, you're mentioning the white paper. We thought it was about time to share our experience and our key learnings from existing approximately 50 deposit return systems for beverage packaging in the world, with a wide variety of stakeholders. And that was the key reason why we published this white paper. 

We did it because we are really convinced, as you are saying, that deposit return systems can practically stop beverage packaging litter in the country or state or province where they are implemented. By giving waste a value, people keep their empties after consumption and return them to collection points provided by the system to get their money / deposit back. And of course, some polluters throw it away. Others will pick it up and value the money. So indeed, DRS is the low-hanging-fruit solution for beverage packaging litter.

Vanessa: And that's amazing to hear because we often despair about the fact that there's just not enough going on. But not all deposit return schemes are the same, are they Wolfgang? They are complex things and one size doesn't fit all. What are you seeing out there today in terms of the disparity of systems?

Wolfgang: Yes, we see very different levels of performance within the existing DRSs globally. And we have to realize that the first deposit return systems for beverage packaging have been implemented about 50 years ago in Canada, and then in the USA. And the reason, already at that time, was to avoid litter. 

Unfortunately, those systems have not really been updated until today, at least most of them. And that means they are quite outdated. In the meantime, they are not performing the way they could. So, we see these kinds of systems and they need modernization. 

On the other hand, we see very modern systems in Europe in particular, where while consumers have it very easy to return their containers and to recycle. Those systems are very, very convenient. So, each system is different and must be different due to the specifics of each country. But there are certain success factors which must be embraced by any well-working deposit return system.

Vanessa: Sure. And you've taken many, many years to perfect this combination or this formula approach. Can you give us a brief summary of what are the core combination of factors to get absolutely right for this to work?

Wolfgang: Yes, what we have learned is that high-performing deposit return systems prioritize four principles to frame their program. Those four principles are performance, convenience, producer responsibility, and system integrity. 

What does performance mean? Performance basically means the implementation of a collection target for a broad scope of beverage packaging plus a meaningful deposit. This combination delivers strong results and a good performance. 

Convenience. Convenience means the redemption system is easy, accessible, and fair for everyone. That ensures massive participation by the population. Producer Responsibility means that producers manage finance and invest in the system by using unredeemed deposits and the commodity revenues for aluminium, glass, and PET bottles. 

System integrity means that trust is built into the systems processes through transparent management, data-driven clearinghouses, and reliable redemption technology. And it's important to say that those four principles are not a set of menu where you can pick from. It's rather an ecosystem, and you have to have them all to have a well-designed and successful system.

Vanessa: That's right. So, there's no point in having a nice deposit refund and not be anywhere near where you live to drop off all the bottles, cans, glass, etc.?

Wolfgang: Absolutely. And those deposit return systems which we see … which are not performing as good as they could, we see very often one collection point for 30,000 / 40,000 people … this is very inconvenient. On the other hand, a well-designed system provides collection points for 1,000 to 2,000 people. And that's of course, a density which makes it very convenient for the consumer.

Vanessa: And this is part of your role, obviously, is to guide and counsel and take your customers through what the formula is.

Wolfgang: Yes, absolutely. We are talking to many, many governments and beverage industry and retail and recycling stakeholders in basically almost all continents right now. The interest is huge in these kind of systems and we try to share our experience as much as possible.

Vanessa: It's got a major impact. I mean, it is really one of the most core techniques of reducing litter out there. Just sort of go through the major environmental impact of a deposit return scheme. Could you how significant are we talking, for example?

Wolfgang: Yes. Well, I think when it comes to the basic environmental benefits of deposit return systems as such. To me, there are four possible things to mention. One, it fights ocean plastic pollution and litter. Second, it recycles more material in a fantastic quality, which is the third one, i.e., it enables bottle to bottle recycling. And the fourth one, it can facilitate the transition to refillable beverage packaging. 

But when we talk about litter, there are some statistics. I mean, unfortunately, and you know how it is when a policy measure is implemented, you have a lot of debates up front. But when it is implemented well, it works, you know, and people are no longer tracing the success in detail. So unfortunately, we do not have a systematic pre- and post-analysis of how much litter was there before and how much litter was thereafter. 

In some countries it has been done, and in particular in the U.S., the effects on litter reduction are well documented through pre- and post- deposit law. Surveys and the percent of litter reduction in states where studies were conducted for between 53% and 84%. And it even had an impact on total litter, which has been reduced between 30 and 47%. And let me add again, the U.S. deposit return system, most of them are a bit updated and they could perform better. So, this effect could even be stronger in case those systems were performing to the way they could.

Vanessa: It's amazing. It also has the great benefit, of course, when you have high collection rates, you've got the highest recycling content possible as a result of that as well. And what kind of quality plastic is that? The deposit return scheme is able to produce here. Can you talk through that a little bit? 

Wolfgang: Yes, of course. The deposit return system is providing a huge or perfect quality, which is absolutely outstanding. In the process, you are separating a clear PET from colored PET, for example. Then further down in the process, you're able to separate the lids which are made of polyolefins compared to the PET body of the bottle, and they are separated via a sink and swim procedure. The pet bottle is sinking, and the polyolefin caps are swimming. The labels are removed, and all of these different parts of the pet bottle are recycled separately in closed-loop, bottle-to-bottle processes. Not all of them, unfortunately, we still have a way to go. 

Let me give you an example from Germany with the big retailer Lidl. Lidl takes back annually approximately 80,000 (metric) tons of PET … only in Germany through the deposit return system. In Germany, This material is owned by the retailer. So, Lidl owns those 80,000 (metric) tons of PET, and they are separating between colored and clear PET. The colored PET, they forward to their own processing plant … so, they have bought processing plants. Then they forward it to their own recycling plant. Then to their own pre-form blowing plant … pre-form for the bottles where the bottles are produced again. Then to their own filler for their own white brands, where in particular, Saskia water bottles, and others are filled and then again go to the shop. So Lidl has completely closed the loop by owning the entire value chain completely. And it's the first retailer in the world which has done that. And that's an amazing example of what you can do with quality material.

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Vanessa: What's the demand like out there for? You mentioned that a lot of people are looking at deposit return schemes at the moment. What are you seeing? You've got … I think you've said once before 22 countries or states are talking to you about deposit return schemes. 

Wolfgang: Yes, we sum up those countries which were taking political decisions in the last three years alone. That is 22 countries in total. Without any doubt, the European Union is the incubator, and that is driven by the Single Use Plastics Directive target. 

The Single Use Plastics Directive contains a 90% collection target for all PET bottles by 2029. So, all member states have to reach a 90% separate collection rate of PET bottles for beverages by then. And there are not that many options, actually, when you look at it from a realistic point of view. There is practically no other option than a deposit return system to reach this target. 

We have a high level of activity in the European Union. Countries which have taken the decision in the last, I would say two years only are I mean, I hope I don't forget something now, but it's Latvia, it's Romania, it's Slovakia, it's Portugal, it's Ireland, it's Scotland. I'm sure I have forgotten one or two. And there are many, many more discussions pending in big countries like France, like Italy, like Poland. So, this is amazing. 

But probably actually the first continent which will be fully covered by deposit return systems will be Australia. Because the last two states there, Tasmania and Victoria, have just announced to go live with their systems by the end of 2022 … respectively, early 23. And as the other states have already implemented those systems over the last years, actually Australia will be first. Then we also see modernization efforts in Canada and in the USA. They are just about to start and I'm very glad to see that.

Vanessa: Right, Brilliant. Let's talk about challenges. One of the biggest challenges that you see with deposit return schemes is the accuracy and the reliability of data. What do you mean by that and what can happen if the official data isn't quite transparent?

Wolfgang: Yeah, I think actually it's quite the opposite. DRS is, in my opinion, the remedy in terms of accuracy and reliability of data. That goes back to the European Union where we are tracing waste management statistics and recycling rates of Member States for many, many years by an instrument called Eurostat. And in the meantime, everybody agrees that Eurostat is actually, the data are not worth the paper they are written on. 

Because each member state of the European Union can report whatever it feels to be right. Some member states have measured recycling figures by just weighing the tonnage of what is collected. And you know, in a bin everything can be in there … and there are a lot of wrong things in the wrong place. So, if you just take the weight of what is collected, well, that doesn't tell you anything about recycling. 

Some member states have measured input into sorting plants, some have measured the output of sorting plants, others have measured … very few … the input into recycling plants. Those figures are not comparable at all, and they didn't give you anything. 

The European Commission realized that, and they changed the rules. They harmonized the measurement process for the different states. And now all the European Member States have to measure recycling … really at the recycling factory … at the very end of the process. We will see if this will work and the accuracy will increase, but I have a lot of hope. 

That's the important thing here for a deposit return system. These problems have not existed because deposit return systems are measuring what is coming back in items by reading the barcode of each and every bottle and can – and not in tonnage. And that makes a huge difference. So, they have always worked with an amazing accuracy and reliability of data.

Vanessa: Another challenge is that the upfront costs of a deposit return scheme can sometimes scare retailers off. Can you discuss if any retailers are listening how this investment is recouped? Maybe an example.

Wolfgang: Yes, and I think that is a very fair concern by the retailers. It is sometimes a big investment. In particular for big supermarkets and hypermarkets where automation is absolutely needed in order to deal with the return process efficiently. 

There are, I would say, two different options in the meantime, which became clear over the last years. One is in countries like Scandinavia, where it's up to the retailer to decide ‘How am I organizing myself? Am I taking back containers manually or investing in infrastructure?’ They can choose – it is a sales and service model. The retailers are buying the reverse vending machines, the infrastructure … hopefully from us, of course … and then they get a handling fee from the system operator. 

There is a national system operator, non-profit organization which overlooks the entire deposit scheme and organizes it. And this system operator provides a handling fee to the retailer for each and every bottle or can which is taken back via the reverse vending machines? This is normally between €0.01, €0.02 to €0.03 per container. This money helps to refinance the machines within, let's say 4 to 7 years normally. And that's a very important mechanism. To reduce the burden of investment on retailers. 

Then there is another way to do that. The best example here is the country of Lithuania, where the system operator has made a call for tender among reverse vending machine suppliers. Who is willing to provide approximately 1,000 reverse vending machines all over the country to all retailers for free? And then we (reverse vending machine suppliers) get reimbursed via a handling fee. So, we shoulder the upfront investment and then we get the handling fee, which I mentioned – and not the retailer. So, in that case, the retailer has no investment to take at all unless sacrificing space for the infrastructure.

Vanessa: Right. You mentioned the Lithuanian case study. That's a fascinating one because they took it nationally and their rollout was fairly impressive. It was 350 kiosks or something within 100 days, is that correct? They were able to scale up extremely quickly?

Wolfgang: Yes. I mean, that's correct. Lithuania was an amazing example of what can be done when several decisive factors are coming together. First of all, the beverage industry was strongly disappointed by the existing curbside system. It gave them only a 34% recycling rate of plastic packaging, and they were under threat by the government that there would be fined … that there would be sanctions for missing recycling targets in the country. So, that got the beverage industry going in order to find better solutions and better systems to avoid those potential sanctions. 

The second thing was we had a very determined government. They really wanted to set up a well-working, effective waste management system. The third thing … very important … was that everybody was willing to listen to the best practice examples from Scandinavia. And they imported a lot of the way the Scandinavian systems have been set up and are operated. Fourth thing, very good communication work of the system operator towards the consumer. Telling them, hey, there is a system coming up, this is a deposit system, this is how it works, this is how you should participate and so on. 

With all of that, within two years, the 34% recycling rate became 92% recycling rate for plastic containers within only two years. And yes, we did our part by rolling out approximately 800 automated collection points within only five months, which was a big operation, but we managed to do it. Now they have a very convenient system with a number of inhabitants per collection point … I think the figure is 1,100 people per collection point, which is a very dense and convenient system. 

Vanessa: I think the world could learn a lot from Lithuania.

Wolfgang: Yes.

Vanessa: Germany's also introduced a return-to-retail deposit return scheme and it's been, in fact, around since 2003. It sees approximately this is huge, 98% of all plastic bottles and cans collected. It's become almost actually a way of life in Germany, hasn't it?

Wolfgang: Yes, it has. And that was not a given from the start, because in the beginning, the retail and beverage industry have been fighting the system tremendously. They were very concerned. There was no experience. And it was not an easy start at all. 
In the meantime, this has changed from a ‘fight’ situation to a matter of course. Nowadays we have approximately 20 billion cans, PET bottles and one-way glass bottles in the system every year. And 98% / almost 99% are coming back each and every year, which is amazing. On top of it, we have a traditional refillable system with refillable glass bottles and refillable PET bottles with more than 25 billion return processes every year – on top of the other 20 billion. 

Of course, both products, be it a one-way can or be it a refillable bottle, are taken back by the same reverse vending machine – just to make that clear. You know, sometimes in particular, when we talk to other countries, they believe, oh, you have to have different return machines for one-way containers versus refillable containers. Of course not. The machine is able to understand this is a refillable container … not compacting it, transporting it to a sorting table, and then it goes for rinsing, cleaning, refilling to the filler. Whereas a can, for example, is compacted right into the machine in order to reduce logistics and all of that. 

But yes, Germany is a huge, huge success story. It's the biggest deposit return system for beverage packaging in the world. And in the meantime, everybody has settled in. Retailers are happy, beverage industry is happy with the system. So yeah, it's really working well. 

Vanessa: And it's absolutely rare to see a stray plastic bottle or aluminum can lying on the ground anywhere.

Wolfgang: Absolutely it has It has basically disappeared. There is no beverage packaging litter, and the deposit value is €0.25 cents. So even if somebody drops it, there is somebody within minutes to pick it up.

Vanessa: Exactly. And you can often see in the cities, people actually going into bins and recouping them from the bins because they're worth something.

Wolfgang: Yes, absolutely. And you know, I'm a soccer fan. And I mean, in those days before Corona, I went to my favorite football club every other week. And normally 20, 30 years ago, it was a mess after the match. You know, thousands of bottles and cans in particular around these big stadiums. It looked horrible. And now, I mean, of course, I watch it with my business eyes. I see that there are many collectors around the stadium. They are really, really waiting for people to finish their beer cans and what have you. And the area is totally clean. There's absolutely no litter around.

Vanessa: Which is wonderful if you're in a developed country. But if you're in a developing country, a lot of these litter pickers can be subject to diseases and other things, correct?

Wolfgang: Yes, that's of course, true. And this also is a big challenge for us in principle. You know, we are more and more working in developing countries. Some in Latin America, but also India, where we need to find and to develop tailor-made deposit return system approaches that are aiming to integrate the informal sector, as we call it. You know, we have to design a system which doesn't take away the basis of living for those people, but we need to rather find a way to integrate them into the system. But there are ways to do that. But this is it's a complicated process.

Vanessa: In terms of classic deposit return system, you've got you collect plastic bottles, you collect glass, and aluminum cans. What's next in the pipeline?

Wolfgang: Yeah, what's next? When we talk about container types, I believe there are two things coming up. One is beverage cartons … or as they are normally called Tetra Pak. There are also other producers, of course, than Tetra Pak, but this is the synonym people know them under. 

We see that more and more countries are integrating those beverage cartons in deposit return systems like New South Wales, for example, in Australia … like some provinces in Canada. And now if I go back to Germany, we will have an expansion of the existing deposit system into juice and into milk in the next three years. And juice and milk are exactly the categories where beverage cartons are dominant. There is a certain likelihood at least that also in the biggest deposit market in the world, Tetra Pak will become part of the system. 

The second packaging item which I foresee to become part of the deposit return systems are single-use beverage cups. You know, the ones you get at McDonald's, at Starbucks, and countless coffee shops and so on. Sometimes they are PET, sometimes they are paper coated, sometimes they are very different composition. And the first country to do that is South Korea. South Korea has made legislation that these single-use cups will be in deposit return systems by June 2022. We are working right now there to share our experience and to try to make the system set up as efficient as possible because we believe that South Korea will be a role model for many other countries.

Vanessa: You've got obviously hundreds of engineers working on improving your technologies across every element of waste management right now. But what does the deposit return scheme of the future look like? Especially for the digitally minded out there?

Wolfgang: Yes, well, indeed, we have many engineers working on new developments, but if I now spoil the surprise of our upcoming next invention, then those hundreds of engineers will probably slaughter me. But no, no, I'm just kidding, of course. 

E-commerce is a very relevant upcoming issue. More and more people get their beverage packaging delivered at home, and they're already legal obligations on those delivery services to basically take back the empties upon the delivery. We need to see how we integrate this in an existing deposit return system. 

Digital apps are also playing a bigger and bigger role. For example, in New South Wales 2017, we have started software where people can skip this classical paper voucher, which you get from a reverse vending machine. You just legitimate yourself with your iPhone. With a with a scanner, and then the money is automatically uploaded on your PayPal account. We have a cooperation with PayPal in Australia. So, these kind of developments are there … and there will be more and more of them, and we need to be on top of them.

Vanessa: Brilliant, Wolfgang, it's been a pleasure. Thank you. Thank you for your time today. That's it for now. And I will leave you with one last thought. Today, 80 to 120 billion USD of plastic packaging material value is lost to the economy every year. But what if the main problem isn't people littering but the result of poorly designed waste management systems? TOMRA.com/depositreturn is where you can find out more. Thank you and goodbye.