Finland: Deposit system (DRS – deposit refund system)

These images seem familiar to some of us, to others just a memory of the stories of the greatest. Surely by now most people know about how milk bottles were reused in many parts of the world, even in the USSR. Apparently it's a pretty effective mechanism, even if it was used maybe for other reasons before. 

Great Britain instituted a new system of "milk suppliers" or as they call him, milkman. They also extended the scheme for various products. It was also initiated in the USA a delivery system for zero-waste products, Loop has also expanded into Europe, with stores in the UK and France. Examples of products that are available on LOOP. Source: https://loopstore.com/ 

These are just a few examples of economic tools that have anticipated customer demand, but there are more effective methods at the level of laws and directives applied throughout the territory of a country. On time, we're talking about The deposit system (DRS – deposit refund system in English) and other measures to encourage efficient collection of already used products and materials.

The deposit system (DRS - deposit refund system in English) is a way by which the various parties involved in the producer-consumer-recycler chain organize a system of voluntary return of packaging, single-use or reusable, by using a financial incentive (guarantee) . The consumer pays a monetary deposit (guarantee) when buying a product packed in returnable packaging and recovers the guarantee when returning the packaging to one of the specially arranged collection centers.

In the EU, the new objectives for the collection of single-use plastic materials (SUP- Single-use plastic – disposable plastic):

1. Separate collection targets for single-use plastic bottles – 77% from 2025, 90% from 2029, article 9 (SUP).

2. Recycling of PET bottles – bottles made from PET must have a recycled content of at least 25% from 2025 and at least 30% from 2030, Article 6 paragraph (4a) (SUP).

The Romanian Ministry of the Environment amended law 211/2011 so that, starting from March 31, 2019, a guarantee of 0.5 lei/packaging for reusable primary packaging used for products intended for consumption by the population. Then, in exchange for a return voucher or similar measure, the customer will be able to recover the warranty when returning the packaging. (https://www.green-report.ro/garantie-50-de-bani-sticla/ ). By 2025, Romania must ensure the separate collection, for recycling, of a quantity of single-use plastic products equal to 77 % of the weight of single-use plastic products introduced on the market in a year, and by 2029 the percentage increases to 90 %.

Objectives for packaging recycling

Article 6 (PPWD – packaging and packaging waste directive – directive for packaging and packaging waste) sets targets for packaging recycling from 2025: for plastics of at least 50%, for aluminum 50% and for glass 70%. Starting in 2030 at least 55% for plastics, 60% for aluminum and 75% for glass.

The waste directives encourage the landfill system (DRS) as a way to achieve the EU's recycling and reuse targets. DRS is the most efficient system to bring packaging to circularity. These systems increase collection rates, allowing for refilling options, but also recycling high-value materials and virtually eliminating the need to throw away packaging.

DRS is a waste prevention measure when used as a replenishment scheme. Article 5 (1) PPWD lists the DRS as a "measure to encourage an increase in the share of reusable packaging placed on the market and its reuse in an environmentally friendly way, without compromising food hygiene or consumer safety".

DRS in Finland has one of the highest beverage packaging return rates in the world. The example of Finland's PALPA and the product circuit is shown in the image below (Source:  https://www.palpa.fi/beverage-container-recycling/deposit-refund-system/#return-rates)

The scheme facilitated the collection of refillable bottles, one-way glass, PET bottles and aluminum cans at a total rate of return over 90% in 2018. The return rate for reusable bottles was 97%, being refilled approximately 33 times. The amount of deposits is between 0.10 and 0.40 EUR depending on the type of container.

Finnish waste law and the decree on returnable beverage packaging collection systems (180/2005) establish a DRS obligation for traders to receive empty containers from consumers: "a distributor of certain beverages sold in storage containers must accept empty beverage containers belonging to same return system. They must be in a quantity considered reasonable in relation to the quantity of packaged beverages for sale and must pay the deposit to the party returning the containers. "

DRS is supported by beverage packaging tax (1037/2004) which taxes the manufacture of certain types of beverage packaging. Importers and manufacturers must pay packaging tax of €0.51 per liter on glass, plastic or aluminum containers for water, soft drinks and alcohol. By becoming members of the DRS, manufacturers and importers are exempt from the beverage packaging tax. Any store that sells packages with deposit is obliged to take the empty ones (sales volume exemption).

TIMELINE OF KEY DEVELOPMENTS IN FINLAND'S DEPOSIT REFUND (SRD) AND PACKAGING TAX SYSTEMS

In the yellow border are civil society actions, in the blue border are windows of opportunity in governance processes and in red – the key developments of the instrument.

1992 – The government issues the public consultation on the tax on packaging 

1994 -Tax on packaging introduced, with lower rates for packaging in DRS 

1996– Beverage industry / retailers established PALPA and a one-way cans DRS 

–          DRS for "unidirectional" containers (PALPA) 

2004 – Ekopullo was created to manage reusable (refillable) PET and glass bottles 

– Packaging tax: the rate for reusable containers is halved. 

2007 – Beverage industry / retailers (in PALPA) established a DRS for PET containers. 

2008 – DRS for "unidirectional" PET launched (PALPA)

– Packaging tax: the rate for reusable containers reduced to ZERO. 

2011 – The beverage industry / retailers (in PALPA) have established an SRD for glass containers. 

2012 – DRS for reusable glass containers launched (PALPA)

As we can see, the process of implementing the systems took a long time, so the sooner we initiate the legislative changes and open to consultations, the sooner we will reduce waste.

PALPA, the system administrator, is a non-profit company. Manufacturers and importers of beverage containers pay a membership fee and package-specific recycling fees. The fees collected from members are used to cover the costs of the return systems. In Finland, all packages are recycled into new ones or raw materials for other industries. By offering a financial incentive to citizens, the problem of garbage and pollution is also solved.