Container Deposits

A Container Deposit Scheme for NSW

On 8 May 2016 the NSW Premier announced that a state-wide container deposit scheme (CDS) would be introduced across NSW by 1 July 2017.

The NSW EPA have provided the draft Bill and a Regulatory Framework discussion paper for the scheme for public consultation, closing 21 September 2016.

The proposed scheme is similar to that operating in South Australia and features include

  • 10-cent refund for returning a specially-marked drink container
  • Drink containers sized between 150ml and 3 litres will be eligible, with the scope mirroring that of the SA and NT schemes (excludes plain milk, wine and spirits).
  • Containers presented through kerbside systems will be redeemable, with MRF operators and local government expected to agree on sharing any refund.
  • Collection depots will range from large-scale depots through to stand-alone reverse vending machines and pop-up sites
  • Beverage suppliers are to provide the 10 cent refund as well as the associated handling and administration fees
  • A single scheme coordinator is to be appointed by the Minister following an EOI / tender process.

The finer details of the scheme still need to be determined, and the consultation will assist in refining the legislation and future regulations. The Minister for the Environment has also appointed an Implementation Working Group (IWG) to help resolve these details. LGNSW is represented on this group, and on several of the working groups that will sit under the IWG.

The Premier’s announcement of a CDS is a significant win for local government and LGNSW. The key characteristics of the scheme largely mirror those for which LGNSW has advocated. LGNSW will continue its advocacy work in relation to transition arrangements for councils (kerbside collection and processing contracts), and informing councils of their options should they seek to be set up or accredited as return depots.

Current indications are that other jurisdictions such Queensland, ACT and Western Australia may adopt a CDS.

Timeframe to implementation

The Scheme is proposed to commence across NSW in July 2017.

Consultation on the draft Bill for the legislation and the associated discussion paper is now underway, closing on 21 September 2016.

The Scheme Coordinator is anticipated to be appointed around December 2016.

What is a Container Deposit Scheme?

A container deposit scheme (CDS) functions so that a customer who purchases a beverage pays a small deposit (around 10c) at the time of purchase which is then refunded once the empty beverage container is returned.

This type of system is based on the principle of extended producer responsibility, whereby the producer becomes responsible for managing their product throughout its lifecycle. CDSs are funded by industry and can vary greatly between jurisdictions. Major differences include the location types for deposit redemption, the refund method, as well as the types of beverages and container sizes included in the scheme.

South Australia has had a CDS in place since 1975, and the Northern Territory introduced a similar scheme in December 2012. Many European countries and states of the USA and Canada also have schemes.

Why a CDS?

For many years, LGNSW has advocated for a state and national CDS. We have undertaken ongoing lobbying on behalf of Local Government and as a member of the Boomerang Alliance, which includes over 30 major environmental groups from across Australia.

The rationale behind Local Government NSW's position on CDS is: 

  • Current kerbside recycling is extremely costly. CDS represents a significant cost saving for councils and their communities.
  • CDS has demonstrated return rates for beverage containers in the order of 85%.
  • CDS address away-from-home consumption, thereby reducing litter and associated clean-up costs.
  • A CDS shifts the responsibility (both financial and physical) onto the producer and the consumer, rather than spreading that cost across all ratepayers.
  • CDS also imparts social benefits to community groups such as the Scouts, who can raise valuable income from the collection and redemption of containers.

There is overwhelming community support for the introduction of a CDS in NSW. A Newspoll carried out by the Total Environment Centre in 2015 reveal that 90% of NSW residents support the introduction of a CDS.

The CDS policy agenda

CDSs have been on the state and national policy agenda for decades. At a national level in 2010, the Environment Protection and Heritage Council commenced a regulation impacts statement (RIS) process into options for managing packaging waste and reducing litter. Local Government NSW prepared a submission as part of this process.

At the end of 2014, the Council of Australian Governments (COAG) advised that it had considered the RIS (including 10 options at a national level). An agreement could not be reached so COAG decided to continue existing arrangements (i.e. a national CDS did not emerge from the process).

Now, the NSW Government has committed to delivering a CDS by July 2017. To help ensure the delivery of an effective and efficient system, the government has established a Container Deposit Advisory Committee.  Local Government NSW sits on this committee.

Potential Impacts of a CDS on kerbside collections

In October 2015 LGNSW commissioned a study of NSW councils seeking to better understand the potential impacts of a CDS on local government kerbside collections. All 152 NSW councils were surveyed about existing kerbside recycling arrangements and key issues this raised for the design of a CDS in NSW.  The study was funded by the NSW Environment Protection Authority.

The study found almost 90% of kerbside recycling collection services were provided via contract, with around 34% expiring in the next two years and 30% expiring in more than five years. Although many existing contracts contain change of law and dispute provisions, councils will require sound legal and technical advice with the renegotiation of contracts.

A CDS may also have other implications which will require changes to kerbside recycling and litter management by local government. This includes changes to kerbside collection systems, the suite of materials collected, utilisation of existing collection and recycling infrastructure, potential changes in costs of kerbside collection, costs of transport and processing to recover undamaged containers and refunds, and potential penalties arising from renegotiation of existing contracts.

Download a copy of the full report (PDF, 2.11MB)

Independent study finds benefits for councils and communities

In 2012 LGNSW commissioned a study into the impacts of CDS on kerbside recycling and councils in NSW. The study found that, despite many long-standing assertions from other stakeholders, CDS would financially, socially and environmentally benefit local councils and their communities.

The study, prepared by Mike Ritchie and Associates, found that:

  • Council kerbside recycling service costs would be reduced by 19-47% under a CDS
  • NSW councils could save $23 to $62 million annually on recycling costs
  • Kerbside recycling is likely to result in a payment received as opposed to a charge to councils at the materials recovery facility gate
  • There would be significant benefits to recycling in regional/rural/remote locations, where kerbside systems are not practicable or efficient
  • Councils would experience significantly reduced litter clean-up costs, and reduced environmental education costs
  • There are also clear environmental and social benefits to the introduction of CDS, largely resulting from the high return rates and opportunities for community groups to become involved in the recycling of containers.

Download a copy of the full report (PDF, 1.46MB).