Deposit this!

Recently, the media reported that "the cabinet is analyzing the possibility of introducing a system for buying back plastic bottles in Bulgaria." This is practically the same as with beer bottles - we pay about 0.20 leva more for each plastic bottle and get our money back, but only if we return it. I would not have paid much attention to this media noise if it weren't for the massive shares and reactions of approval among my contacts on social networks like - "Finally something meaningful from the Ministry of Environment and Water!" and "What have we been waiting for so far?" And since I have recently witnessed the flourishing of too many popular eco-ideas, I decided to comment on this one before it was too late.

Deposits – nothing new under the sun

My personal experience with the so-called deposit system dates back to the 1990s, when I was studying in Germany. I remember taking plastic bottles back to the store so that I could get my deposit back. As a student of Environmental and Resource Management, I experienced the progress towards sustainable development and a circular economy from textbooks and participated in it. It was a matter of honor for a future environmentalist.

Of course, I remember that a similar system once existed in Bulgaria on a huge scale (although for other types of waste). As a student, I returned everything... One summer at the MMC, a friend and I decided to make some money from glass bottles. In the evening, we walked along the beach and collected the bottles. We dragged them to the point in Primorsko. It's about 5 km. - it was not an easy walk. Half of them were taken, half were rejected, I don't remember why. We were furious. We hid in a park and ruthlessly smashed all the rejected bottles. Then we sneaked behind the store and stole 2 crates of empty bottles. We "returned" them and were happy. We had taken revenge on the system that had tried to screw us over.

In 2005 I returned to Germany for a few months. Over time, however, the deposit of 0.10 marks had reached 0.25 euros. And then I stopped buying drinks in such packages, because my life was different, too often I could not return them and therefore simply lost the money. I no longer liked the deal. Sustainable development was seriously affecting my pocket, and with a wife and child I could no longer afford to save the planet to rob me daily.

I recall my story as I review several reports on the development of the deposit system around the world. It turns out that it perfectly describes what incentives the deposit system creates and what actually happens to consumer behavior and the environment.

The effects of eco-deposits and the "circular economy"

The idea of introducing a deposit system on beverage packaging is linked to the political will to achieve the so-called “circular economy”, which consumes a minimum amount of new resources and generates no waste and pollution. This is an idea that sounds great in books, but when implemented, without any connection to economic reality, it can create the unexpected side effects characteristic of any central plan. Because it is extremely beautiful and popular and, most importantly, it allows governments to justify the introduction of all kinds of mechanisms for “correcting errors” in the free market, this concept has penetrated deeply into European waste management policy. It finds expression in the so-called waste hierarchy – a law of God (i.e. of the European Commission), which in its popular version says that we must reuse or at least recycle everything possible. This, of course, is not true. Here is the text of the Waste Directive, which many people conveniently skip and which they try to delete because it interferes with their “political decisions”:

“The waste hierarchy generally sets out the order of priority of what constitutes the best environmental option…, and deviation from that hierarchy may be necessary for specific waste streams where justified for reasons such as, inter alia, technical feasibility, economic viability and environmental protection…, where based on life-cycle considerations of the waste, in relation to the overall impact of the generation and management of such waste.”

The directive practically says that in order to make an optimal decision for each waste stream, a life cycle assessment of management alternatives must be made, combined with a cost-benefit analysis that also takes into account environmental impacts. This is exactly what our colleagues at denkstatt have been doing for 20 years in countries such as Austria, Hungary, Germany, Portugal, Sweden and the results are as follows:

• The environmental benefits of implementing a deposit system for single-use packaging, alongside a system for the collection and recycling of packaging waste, are minimal and very much depend on the specific conditions in each country. They are highly dependent on consumer behavior and if the system returns less than 70% (and this does not happen automatically) of the packaging placed on the market, the environmental benefits are zero.
• In theory, the deposit on single-use packaging should lead to an increase in the share of buying drinks in reusable packaging. Yes, but no! Data from Sweden and Germany clearly show that the trend towards increasing the share of single-use packaging remains unchanged. People simply don't want to deal with carrying bottles because they can invest their time in more meaningful things.
• At the same time, the costs of the system are enormous. Practice in Germany shows that the cost of collecting a single-use package is 3 times higher than that of collecting from containers, and that single-use packages with a mandatory deposit contribute only 2.7% to the recycling volumes nationwide. And this is only the cost of logistics from the store to the recycling centers and does not include the cost of the time that each consumer has to invest in dealing with bags or crates of bottles.
• The deposit system everywhere reduces the efficiency of existing container systems. First, consumers throw less into the containers, which is a desired effect. The second effect is that vagrants empty the containers selectively – they only take out what they can hand over to the nearest store for a better price, and the rest remains scattered around. In addition, they have a strong incentive to “hijack” already returned quantities in order to return them an infinite number of times. This is a classic side effect that actually compensates for all the theoretical positive effects of the deposit. Of course, waste recovery organizations lose in both cases and their investments in building separation plants become meaningless.
• A study commissioned by the Hungarian government in 2004 showed that the potential economic losses from the possible introduction of a product tax on each plastic bottle are 21 times greater than the possible monetized environmental benefits. With much smaller investments in the container system, much more significant environmental benefits could be achieved.
• After a similar study, the Austrian government decided not to introduce a mandatory deposit, but to create a voluntary industry initiative to reduce carbon emissions throughout the life cycle of beverage packaging. The results by the end of 2014 were much better than predicted: the recycling rate for plastic bottles reached 58% (which is very close to the maximum possible in practice), and emissions are falling despite the growth of the market.

All of this does not guarantee that the results of a comparative cost-benefit analysis based on a life cycle assessment of possible alternatives for packaging waste management in Bulgaria will be exactly the same. However, it does provide some indications.

Here again the notorious waste hierarchy intervenes and says that it is better to use only reusable packaging, that is, bottles that can be returned to the factories and refilled. As I already mentioned, this is also one of the ideas of the deposit system – to make people buy and distribute refillable bottles. The hierarchy is wrong again – analyses clearly show that reusable packaging leads to huge costs and minimal environmental benefits, if any. It is no coincidence that the free market, that is, the actions, not the words, of the consumer, rejects them – their share is steadily falling everywhere.

But let's get back to the idea of the Ministry of Environment and Water to introduce a deposit system for single-use bottles. Although their own analyses from 2012 clearly show that the whole thing is pointless, today they are again "exploring the possibility of introducing a system like the one in operation in Germany, and German companies have introduced in other countries." And for this purpose... a Mercedes dealer will be hired to answer the question:

"Should we buy a Mercedes or another car?"

I remember what the answer would be and that's why I decided to... deposit this!

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