A changing landscape: The history of deposit return schemes

This year, for TOMRA's 50th anniversary, we have examined the history of reverse vending innovation. Now, we take a look at the history of deposit return schemes, and how these recycling programs for drink containers have evolved and the trends that have impacted their development.
Image of person heading to recycling containers

Deposits on beverage containers are by no means new – they have been around for more than a century.

Today there are more formalized programs known as deposit return systems (DRSs, also known as deposit return schemes, container deposit schemes or bottle bills) that play a significant role in encouraging recycling around the world. They work by adding a small refundable deposit to the price of a drink, which consumers get back when they return the empty drink container for recycling.

More regions than ever before are implementing these systems through legislation, in a bid to address the scourge of plastic pollution and litter. By the end of 2022, an estimated 370 million people worldwide will have access to a DRS.

However, when looking at the history of deposit return systems, tackling pollution was not the original motivator for early deposit programs for drink containers.

The first wave: Goodwill and voluntary systems for recouping valuable assets

If we rewind to the late 18th century, plastic beverage containers were unheard of. Drinks like beer and soda were typically available in glass or even stoneware bottles.

Unlike today’s plastic bottles and aluminum cans, these costly items were not perceived as being disposable. They were seen as the property of the purveyor and indeed a business asset to be accounted for, and there was an understanding between both merchant and consumer that containers should be returned. This was typically done as a gesture of good will, with no financial incentive of a deposit. In the UK, for example, "Rinse and Return" for doorstep milk bottles saw dairies reuse these glass bottles up to 40 times.

But in the decades that followed, as markets expanded and producers were faced with financial losses due to diminishing returns, something had to be done to help increase the likelihood that they got their assets back. This was a key moment in the history of deposit return systems, as introducing deposits on the containers was the logical solution. These were so-called “voluntary” programs, where the beverage producers took the initiative to implement the deposit, without the programs being legislated.

In 1803, UK soft drink producers were offering money back on returned beverage containers, and from 1900 the first producer charged deposits up front for this purpose. US records show some producers began introducing these deposits as far back as the 1870s and 1880s, but it would take until the mid-1920s for bottle deposit systems to become commonplace.

The rise of single-use packaging


Image of plastic bottles
Fast forward fifty to sixty years later, and there was a new “solution” on the table for beverage producers. The 1970s saw plastic bottles introduced for the first time for soft drinks, and by 1973 bottles made from PET (polyethylene terephthalate) – now the norm for carbonated drinks – had been patented.

The popularity of single-use PET bottles and aluminum beverage cans grew, as they were pitched to beverage brands as great new substitute materials that would be lightweight and disposable, and enable producers to entirely eliminate the idea of their containers as business assets.

“It was an exciting time. Brands were very receptive to this change, as the concept of not having to invest in an asset that you’d have to manage throughout its lifecycle was hugely appealing," said Wolfgang Ringel, Senior Vice-President Group Public Affairs at TOMRA. "Suddenly problems like taking back crates of refillable bottles, or suffering losses due to breakage, were taken right out of the equation. These new containers were lighter, easier to handle, would bring cost savings and they knew consumers would buy in.”

Image of Wolfgang Ringel
Wolfgang Ringel, Senior Vice-President of Group Public Affairs at TOMRA
What if the problem of bottle and can litter is actually the result of poorly-designed waste management systems?

From industry solution to municipal burden

However, this excitement was later tempered with the realization that the change brought its own set of challenges.

“It was all going swimmingly until it became apparent that these throwaway items created a waste stream that would put a burden on municipalities,” explained Wolfgang Ringel. “Suddenly they had to work out how on earth they were going to deal with this influx of drink containers, but municipalities didn’t have the capabilities." There was no way that government was going to allow the industry to put single-use products on the market without a way of capturing them back, so they had to come up with an answer.

And so began the evolution of multi-material, household curbside recycling. It would allow certain materials which had a value to be separated from waste, which municipalities could then sell and turn into a revenue generator.

Ontario was the first in the world to implement curbside collection, in a deal which saw the soft drink industry (through the Ontario Soft Drink Association) provide seed financing for the program, known as “blue box” collection. What started as a $1 million contribution rose to $41 million, distributed over 10 years (1986-1996), although taxpayers covered considerable remaining costs of $2.33 billion including landfill.

Curbside collection challenges

This coordinated effort from the value chain in establishing curbside recycling brought an array of initial benefits: an injection of cash, the establishment of infrastructure, and grants to help fund areas such as sorting equipment or even trucks.

However, the peaks-and-troughs pattern of solution, problem, solution, problem continued.  Over time, many curbside recycling programs became government mandated, making them a legal requirement. Yet some municipalities found the arrangement wasn’t always paying off or proving cheaper than disposal – it could even be more expensive.

They were at the mercy of market problems like commodity prices dipping. In addition, they were also finding that their mixed waste streams morphed over time and became predominantly plastics – more than they could deal with.

The second wave: Combatting litter and waste

While this was ongoing, another part of Canada had also become a driver of major change and innovation.

In 1970, through the Litter Act (designed to reduce the burden of litter control), British Colombia marked a world first by introducing a mandatory refund system for beer and soft drink cans and bottles: the world’s first government legislated deposit return system. (This was later replaced in 1997 by the Beverage Container Stewardship Program Regulation, which is considered “best in class” thanks to its high collection rates and recovery rates: 84.2% in 2013.)

Image of people picking up litter

From that point onwards, the concept of implementing a system where deposit return was actually legislated started to gain traction.

Throughout the 1970s, similar systems were adopted in other parts of Canada as Alberta and Quebec launched deposit return systems, and they also sprang up in parts of Australia and the US. Europe followed from the 1980s, with Sweden in 1984 becoming the first country in the region to introduce deposit, starting with cans.

During these key decades, more and more countries continued to come on board across each territory, and the last ten years have seen particularly rapid growth in this global movement in an effort to address the crisis of waste and pollution.

A short overview of deposit return systems in operation across the globe shows the rise and reach of DRS, which now spans more than 40 jurisdictions worldwide:

  • Since British Colombia led the way in the 1970s, 11 of Canada’s 13 provinces and territories now operate deposit return systems.
  • Australia’s first territory to implement a deposit return system was South Australia in 1977. The Northern Territory was next in 2012, and a further four Australian states/territories have since implemented deposit systems since 2017.
  • In the US, ten states have implemented bottle bills – Oregon was first in 1972 and the most recent addition was Hawaii in 2005.
  • In the Middle East, Israel implemented its deposit return mandate in 2001.
  • Barbados was the first across Oceania and the Caribbean in 1986 and Kosrae, Yap, Kiribati, Palau, Pohnpei, Tuvalu and Republic of the Marshall Islands have since followed in its footsteps.
  • Across Europe, 13 countries have deposit return systems in operation.
Image of girls looking at containers in supermarket

Today’s third wave: Reputation and demand for recycled content

Wolfgang reflected on the changing motivations for bringing in deposits, in light of the rising global demand for deposit return systems.

“The first bottle deposits were introduced for obvious economic reasons. When they later became legislated, this was also in response to the plastic waste problem and the burden on municipalities,” he said. “As the litter problem grew, it also meant there was a reputational issue for producers to consider. For example, the Ocean Conservancy produces an annual report on litter statistics that include a breakdown of litter by beverage brand, and that sort of reporting is a powerful tool in accountability and driving change.”

Wolfgang says there is another major factor influencing change: recycled content requirements. While this often includes voluntary pledges by beverage producers, legislation like the European Union’s Single-Use Plastics Directive (SUPD) means the clock is ticking for brands to meet stringent new requirements. The Directive set out a target for manufacturers to use 25% of recycled content in PET beverage bottles by 2025 and 30% in plastic beverage bottles by 2030, as well as separately collect 90% of plastic drink containers by 2029.

Illustration of Single-Use Plastics Directive targets

With strict targets and deadlines fast-approaching, deposit return systems are attracting more interest than ever, due to their proven track record for enabling the collection of large quantities of beverage containers for reuse and high-quality recycling (experts say it will be difficult to impossible to achieve 90% return rates without deposit return systems). In Europe alone, the average PET bottle collection rate is 94%, versus the 47% collection rate achieved by curbside programs.

“Public pressure and reputation will always have a part to play, but right now the need for recycled content is probably an even bigger player in powering the explosion we’ve seen in DRS number,” explains Wolfgang. “As governments introduce recycled content requirements, producers are recognizing that it’s worth supporting deposits because it will help them meet their obligations and get access to their own material instead of having to seek out new material. It’s a very attractive value proposition. We now even see producers going to government and urging them to implement a level playing field in legislation so that industry has to make a collective effort to solve this problem.”

The road ahead for deposit return schemes

“It has never been a more dynamic time for DRS, as more jurisdictions continue to come on board,” explains Wolfgang. In Australia, the states of Tasmania and Victoria are currently in the process of implementing deposit systems of their own, and Australia will soon become the first entire continent with deposit return systems. In the US, nine states proposed adding a new bottle deposit system in 2021. Singapore, Jamaica and Guadeloupe are also having open conversations about DRS.

Expansion of existing deposit systems is also taking place:

  • Germany and the Netherlands in 2022 widened their scopes to include more types of beverages containers.
  • All ten US states with existing deposit systems filed legislation in 2021 to update and expand their programs to be more effective.
  • The Canadian province of Quebec recently committed to modernizing its existing deposit system in several ways, including adding deposits to popular beverage categories and making the deposit value more meaningful to better incentivize returns.

 

There is also growing consumer demand for deposit return systems. A World Wide Fund for Nature (WWF) poll in 2020 found that 88% of adult Americans supported the creation of a “nationwide beverage container refund program” for plastic containers. This aligns with research analyzed by Reloop into the public’s attitude towards DRS, which found on average 82% of participants were in favor of a system being implemented, across a compilation of over 80 public opinion polls conducted in 18 countries from 2003-2021.

Wolfgang concludes, “It is exciting to see how deposit return systems will continue to evolve in the years ahead, in response to public opinion, policy shifts, new container materials, and greater consideration to the impact of packaging on the planet.”