How Connecticut, USA, modernized its deposit return system

Connecticut creates, then revitalizes, its deposit return system

Connecticut first adopted a deposit return system (DRS) for drink container recycling in 1980, to reduce litter and divert waste from the state’s increasingly full landfills. These Extended Producer Responsibility collection programs work by providing a financial incentive for consumers to return and recycle drink containers, rather than wasting or littering them. Connecticut’s initial deposit system charged consumers a 5-cent deposit on top of the price of a beverage, which was refunded in full when they returned it to a store or redemption center. By all accounts, the program was a success. The state achieved world-class levels of beverage can and bottle recycling rates at 88%ⁱⁱ, litter reduction was estimated between 70 and 80%ⁱⁱⁱ, and the program grew to support over 1,200 jobs.^iv

Over time, however, the return rate declined, in parallel with the value of the 5-cent deposit. By 2021, Connecticut faced multiple challenges that a high-performing deposit return system could help solve. First, the cost of waste and recycling through the curbside system was rising dramatically for municipalities and residents. Second, the public was increasingly concerned that beverage containers, including plastic bottles, were one of the state’s most littered items.^v And finally, glass bottles in the curbside recycling system were largely going towards covering landfills rather than recycling, at great expense to municipalities.^vi

Beyond the deposit value, some aspects of the deposit system had become antiquated since key features were stipulated by statute. Popular beverages like juice and sports drinks were not eligible for a recycling refund, and the amount paid to retailers and redemption centers for accepting containers (the “handling fee”) fell below their costs. Given the program had reached an 88% return rate in the past, policymakers knew the program had “good bones” but required an update to the fundamental economic drivers of participation and positive redemption experiences. 

The Connecticut bottle bill model: following a blueprint for success

To revitalize its DRS, Connecticut reviewed the best practices of deposit programs that reach 90%+ return rates, namely: circularity, performance targets, convenient and accessible refunds, system management, and system integrity.^vii

In practical terms, this meant Connecticut:

• Raised the deposit value from 5 to 10₵: To re-engage the public and increase return rates
• Made more beverages eligible for a deposit refund: Juice, sports drinks, coffee and tea, kombucha, energy drinks, malt-hard seltzer, and malt-hard cider, were all added to the program 
• Reinvested in the redemption network including raising the “handling fee” for retailers and redemption centers: This enables retailers to cover their container takeback costs and offer better redemption experiences for the public. The measure was also intended to create more redemption centers in a state where many had closed. The handling fee was raised from 1₵ to 2.5₵ for beer and malt-based hard seltzers and from 2.5₵ to 3.5₵ for all other deposit beverages. The handling fee is paid by the beverage company who first sold the beverage in the state.

• Requiring chain-stores 7,000 square feet and larger to provide consumers access to at least two reverse vending machines and immediate deposit repayment: While all beverage retailers were already engaged to take back containers, in practice many consumers were not aware of this and therefore these locations were an underutilized part of the redemption network. This measure helped to more fairly distribute the redemption volume between grocery stores, other beverage stores and redemption centers.^viii
• Creating a $5 million grant fund for modern redemption centers in under-served communities: Funding was prioritized for under-served communities and women-owned, minority-owned and locally-owned businesses.^ix  
• Ensuring all containers can be accepted by reverse vending machines: If a container is not accepted by an RVM then a consumer needs to take it the cashier or customer service. To avoid this as much as possible, Connecticut adopted two measures: 1) requiring all eligible products to feature a Universal Product Code (a specific barcode type) and submit that information to RVM system operators prior to sale^x  and 2) establishing size limits for rare, large and small containers that cannot be processed by commercially available RVMs. Specifically, Connecticut set size limits of up to and including 2.5 liters for non-carbonated containers, and up to and including 0.15-3 liters for carbonated containers. Any container below 150ml was excluded as well.^xi;
• Setting redemption limits per person at retail: To steer high-volume redeemers away from retail and toward redemption centers, the legislature implemented a rule that allowed retailers to enforce a 240-container limit per person at any one time.^xii This also helps deter unauthorized cross-border redemption since it minimizes the financial gain of such an endeavor.

Policymakers phased in modernization of the deposit system. Phase one, which took effect in October 2021, reinvested in the redemption network to ensure all residents had convenient access to deposit redemption. Within a year, these measures doubled the number of return locations available to the public including providing access in under-served and low-income communities, and creating 12 new redemption centers. In January 2023, the new beverage categories like juice and sports drinks were added to the program with a 5₵ deposit. And in January 2024, the deposit value for all eligible containers was raised to 10₵. Within six months of the deposit value increase, redemption volume increased by about 30%. This trend is expected to continue over the next 2-4 years as consumers become accustomed to which containers are eligible for a refund, the new deposit value, and new return locations.

In addition, the legislation allows the beverage industry to reinvest between an estimated $34-54 million in unredeemed deposit revenue each year depending on sales and redemption rate projections. Should the program reach a 90% return rate, which is possible with its 10₵ deposit and current trajectory, this would recycle an additional 2 billion containers per year.^xiii To put this in perspective, if those containers were laid end to end, they would cover the entire US east coast, the entire US west coast and have enough left over to do so again 75 more times.