Container Deposit System would cost New Zealanders

12th March 2007

Canadian Container Deposit System would cost New Zealanders $121 million per year

The Packaging Council believes that whilst we can always learn from overseas, we should not keep beating ourselves up with legislation envy. Visiting Canadian Tom Galimberti may have dismissed the independent report by independent New Zealand economists commissioned by the Packaging Council last year into the cost of Container Deposit Legislation as “a pile of (worthless stuff)” but his own study needs to be put under some serious scrutiny.

Mr Galimbertí’s claims that his model will create 2000 new jobs and inject more than $300,000 per day into the economy are simply not credible given the enormous cost of setting up a new infrastructure across the country to handle returns for which we do not have a big enough market.

Paul Curtis, Executive Director of the Packaging Council says that on the contrary all the evidence points to huge additional costs particularly when we already have an efficient kerbside recycling system:

“Research conducted by Auckland based economics consultancy Covec finds that the net impact of introducing a mandatory beverage container deposit system in New Zealand could cost up to $121 million per annum. Whilst there is no doubt that our memories of the annual Scout’s bottle drive provide a compelling emotional argument for container deposits, all the evidence points to the huge, additional costs of such a system. Those countries which have introduced CDL have primarily introduced it as a litter management solution or have introduced it prior to a kerbside system. This was borne out by Mr Galimberti who agrees that litter is the main driver and CDL is not a method of achieving waste minimisation to landfill. When 95% of New Zealanders have access to recycling facilities, introducing container deposit legislation would make no sense as it would compete with our existing collection systems for recyclables.”

“We also challenge Mr Galimberti to justify why New Zealand should spend up to $121 million per annum just to create 2000 low skilled jobs when New Zealand has one of the highest employment rates in the OECD. Indeed CDL appears to be put forward as a cure for all evils including homelessness and social welfare.”

“We agree that more needs to be done to provide facilities for recycling away from home. Under the Packaging Accord; industry, recycling operators and local and central government have got together to form the Environmental Beverage Action Group. This group promotes recycling at events but has gone one step further by designing a drinks recycling bin which will be the modern equivalent of the scout’s bottle drive. The bin has two blank panels which can be “sold” to event sponsors or other local advertisers. This will be an attractive low cost option.”

“What Mr Galimberti has not considered is that New Zealand has much bigger waste issues to deal with. If you look at the content of a landfill, the big ticket items are organic wastes such as garden wastes, kitchen waste food processing wastes and sewage sludge which make up about one third of all landfill waste. On top of this over three million tonnes of waste from building and demolition activities are disposed of to cleanfill sites every year. These represent two thirds of the problem. Whilst we continue to obsess about container deposit legislation, which would decrease waste to landfill by less than 3%, we are completely missing the big picture.”

“Despite his claims, even adopting the most cost effective solutions in practice around the world including Canada, the cost of implementing a container deposit system in New Zealand would be massive. The additional cost for every tonne recycled would be an average of $1020 per tonne or $65 per household, compared with an average cost of $60 per tonne for a kerbside collection service.”

“And it’s worth remembering that introducing CDL will not mean that beverage containers returned will be reused as drinks containers because the food safety standards required for manufacturers control the use of containers as a major food safety hazard. Any container used in the manufacturing process must meet stringent safety criteria with regard to fragments and to cleaning chemicals used in the recycling process. This effectively eliminates reuse of containers without major capital investment in processing recovered containers. We also do not have the economies of scale which larger countries have to process all of the recovered material which we currently recover. We are an island 1000’s of kilometres away from the main markets not the second largest country in the world.”

Container deposit systems are inherently more expensive than kerbside collection schemes due to the storage, transportation, processing and labour costs on top of the complexity of identifying containers by exact number (in order to pay refunds and process handling fees) and separating containers both by material type and by brand owner.

Although CDL would increase packaging recovery rates by 26% or 90,000 tonnes, this would only equate to a 2.6% decrease in waste to landfill, but at a cost of up to $121 million per annum and would cause a massive upheaval for supermarkets who would be required to process all of the returned packaging.

ENDS

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