Bottle Bill Has A Chance - And Response

Tuesday, March 24, 2009 - by Marge Davis, VP of Scenic Tennessee

Thanks to smarter funding, support from manufacturers and a heightened interest in recycling, Tennessee’s proposed container-recycling bill (the “bottle bill”) stands a better-than-ever chance of passing this year.

Hearings on Senate Bill 1404 / House Bill 1167 — the “Tennessee Beverage Container Recycling Act” — are expected to begin in early April. Sponsored by Sen. Doug Jackson (D-Dickson) and Rep. Mike Turner (D-Old Hickory), the bill calls for a 5-cent deposit on glass, plastic, aluminum and bimetal containers of soda, beer, water, energy drinks and most other beverages.

Consumers get the deposit back when they return the empties to any of hundreds of small, independent businesses, known as “redemption centers,” that may be owned by individuals, businesses, local governments and nonprofit agencies.

These small enterprises, which may also wish to accept other recyclables such as cardboard and newspaper, will earn the scrap revenues plus a share of the unredeemed container deposits.
Analysts project that roughly 85% of the 4.5 billion bottles and cans sold in Tennessee each year will be redeemed. In addition to funding the redemption centers, the unclaimed deposits will be used to pay all of the program’s operating costs.

The self-supporting design of this year’s bill is getting high marks from legislators, especially in comparison to last year’s version. Last year’s bill required beverage distributors to finance the bulk of the program via a 3-cent handling fee.

This year’s bill eliminates the 3-cent fee. Instead, distributors pay only a “container-recovery fee” of one-eighth cent per container—almost exactly what they are paying now in so-called litter taxes on soda and beer. These taxes, created in 1981 as an alternative to an earlier proposed bottle bill, will automatically terminate if this year’s bill becomes law. The litter programs that are currently supported by the taxes—inmate litter crews, county litter education and Keep Tennessee Beautiful—will instead be funded out of bottle-bill revenues.

Other recycling bills cost more
The self-funding structure of the bottle bill also looks attractive in light of the high costs of two competing bills submitted this year by the beverage industries. The two new bills are due to be heard tomorrow in House subcommittees.
Both bills (SB2083/HB2051 and SB0876/HB1630) require that the state reduce its municipal solid waste by 75% within the next decade—a goal that no other state even comes close to. To reach it, the bills propose an array of new mandates, from “green” graduate-school scholarships to a landfill ban on cardboard, newspaper, office paper, containers, yard waste and Styrofoam.

Not surprisingly, both bills come with hefty fiscal notes (cost estimates) of anywhere from $1 million a year to more than $2 million. Though some of this funding is provided for in the bills — an estimated $35,000 annually from a “green Tennessee” license plate, $400,000 a year in state lottery funds and an estimated $160,000 a year from a recycling fee on newspaper publishers — the majority of costs will have to come from state appropriations. In this economy, it’s hard to see how either of these new bills can survive. At the same time, with Tennessee’s cans and bottles collectively worth at least $50 million a year in container scrap, it’s hard to see how the bottle bill can fail.

The economic advantages of a container deposit have changed other minds besides lawmakers’. As oil and energy prices have spiraled, a growing number of manufacturers and industry trade groups have withdrawn their long-standing opposition to such programs.

The first group to do so was the Association of Postconsumer Plastic Recyclers, which represents 80 manufacturers and processors from Mohawk (carpet) and Eastman (chemicals) to staunch bottle-bill opponents Coca-Cola and Pepsi. Despite the vehement objections of the beverage industry, APR members voted in May 2006 to support the expansion of existing bottle bills and oppose any efforts to repeal them.

“No alternative mechanism has been identified,” the group said in a position statement, “that would provide a similar stream of consistent, high volume, high-quality supply [as that generated by container deposits].”

The APR’s change of heart was echoed in November 2008 by the 80-member Aluminum Association, which includes such industry giants as Alcoa, Novelis and ARCO. In a press release announcing a new 75% can-recycling goal, the association acknowledged, for the first time in its history, that container deposits are now among the various tools it will consider as it works with state and local governments to reach that goal.

“Container deposits are a proven, sustainable method of capturing beverage cans,” said the release. “States that have deposit programs have the highest can recycling rates, on average at 74% or higher, while the recycling rate in non-deposit states is around 38%.”

Tennessee’s recycling rate, it should be noted, is even lower than that. Though aluminum is the most recycled of all container types, Tennessee’s aggregate recovery rate for all beverage containers is probably no higher than 10%, according to analysts in the state’s Division of Solid Waste Management. The rates for plastic and glass are almost certainly in the single digits.

A month after the Aluminum Association’s announcement, the glass industry weighed in. In December, the 44-member Glass Packaging Institute announced that it would “accelerate support of legislative and regulatory measures,” including container deposits, in order to achieve a new goal of 50-percent recycled content in glass containers by 2013. Among GPI’s members are Anchor Glass, Saint-Gobain and Owens-Illinois.

Owens-Illinois, the largest manufacturer of glass containers in the world, with almost 25,000 employees across five continents, is a customer of Strategic Materials, the largest glass processor in North America. (Among its 31 plants is one in Ashland City, Tn.) Last month, SMI president Tex Corley was in Nashville, explaining to lawmakers that, contrary to some appearances, there is indeed a strong market for recycled glass. The key is making sure that it is collected in high enough quantities and quality to justify transportation costs. Community and curbside recycling programs rarely do this; bottle bills, always.

Because deposits put a cash value on beverage containers, they ensure consistently high return rates; the national average is approaching 80%. And because the containers are sorted individually, whether by hand or machine, at the collection point, deposit programs ensure an exceptionally “pure” commodity, free of the mixed colors, cross-contamination and plain old garbage that plague most other collection systems, especially so-called single-stream.

In a single-stream curbside program, for instance, all of a household’s recyclables are placed in one bin and sorted later at the recycling plant, a process Corley refers to as “unscrambling the egg.” Because the unscrambling is never perfect, the resulting commodities can bring lower prices, or be harder to sell, or be suited only for lower-value uses such as roadbed fill. In the worst cases, they can damage expensive processing equipment. Indeed, some glass-plant managers refuse to buy material from single-stream systems, complaining that as much as 50% of it may be unusable—leaving them to pay hefty landfilling costs.

A step toward comprehensive recycling
Opponents of bottle bills (mainly the beverage, retail and waste-hauling industries) argue that beverage containers account for barely 6% of municipal solid waste by weight, compared to, say, the roughly one-third of MSW that is paper and cardboard, or the 25% that is food scraps and yard waste. What Tennessee needs, they insist, is comprehensive recycling that addresses all household commodities.

Comprehensive simply means addressing all parts. It doesn’t mean that you have to address them all in the same way. Container deposits, for instance, happen to be the most effective tool for recapturing glass, plastic and aluminum beverage containers—which, by the way, are roughly 80% of all containers.

For cardboard and newspaper, single-stream curbside bins are probably the most effective tool—but if you want to collect cardboard, newspaper and food waste, you’ll need dual-stream. (You’ll also need a composting site, and a market for the compost.) For used tires, used oil and car batteries, the best tool — which Tennessee already uses — is a landfill ban on these items, coupled with a mandatory recycling fee paid automatically to the retailer, who usually also serves as the collection site. Landfill bans can also work well for computers and other electronic items, as long as you have adequate systems in place for collecting, processing and marketing them. Otherwise, a lot of them are going to wind up dumped on the roadside.

In other words, truly comprehensive recycling isn't as simple as simply declaring a landfill ban on this or that item. Comprehensive recycling takes time, it takes infrastructure and it takes money. One of the great advantages of the proposed bottle bill is that most of these components are already in place; the others will be ready to go by the time the first deposits are collected on April 1, 2011. And once a bottle bill is in place, infrastructure tends to expand, new markets emerge and citizens are primed to accept additional programs.

And Tennesseans are ready right now for a bottle bill. In a 2008 randomized survey of 777 registered voters by the University of Tennessee’s Social Science Research Institute, more than 4 out of 5 Tennesseans—80.4 percent—said they support a 5-cent deposit with returns to redemption centers. The majority said they “strongly” support such a measure.

If lawmakers listen to their constituents — and to economic common sense — Tennessee will have a container deposit by the end of this legislative session.

For more information about the proposed legislation, go to www.tnbottlebill.org.

Marge Davis
Vice president of Scenic Tennessee
margedavis@comcast.net

* * *

I am originally from Michigan and we had a bottle return law; I am
glad to see you are including water and other beverages besides soda
and beer.

When I moved to Florida it felt strange to throw out my soda
bottles, and I missed the money from the returns. You never noticed
the additional price when purchasing the product, but you did notice
how fast they added up when returning them. I would save up my soda
bottles in bags and make a big trip to cash them in, they came in
handy several times when I was short on cash and payday was a few days
away.

In Michigan we returned them to place of purchase, grocery stores or party stores, as long as the store sold the product they would take back the bottles. You would receive a slip that you could use as cash at the store or just get your money back. Many stores had machines that you feed the bottles into, the kids had fun feeding the machines.

Several organizations would collect bottles for fundraisers; it was an easy way to donate to groups. I have moved to Tennessee and would like to see the bottle bill, but for it to be successful the return locations have to be conveniently located in several places. I would recommend that you include the ability to return to purchase points for greater success.

Karla Voight
Chattanooga


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