REVERSE VENDING
Reverse Vending: Managing the cost of investment
Kathryn Vassilissin, Vendor Finance, Siemens Financial Services UK explores the expected impact of Deposit Return Schemes in the UK and the enhanced sales opportunity for Reverse Vending Machines (RVM) vendors that offer integrated finance.
R
everse vending is on its way. Around the UK, long- awaited plans to implement
Deposit Return Schemes (DRS) and recycle billions of bottles and cans every year are finally coming into action. Scotland is leading the charge with its DRS scheduled to go live August 2023. The scheme aims to achieve 90% collection rates by 2024. Meanwhile Wales, England and Northern Ireland are collaborating on a pilot DRS to
increase the recycling rate of drinks containers and reduce littering, with a projected start date of late 2024. The impact of these schemes has huge potential. A little over 14 billion plastic bottles are used each year in the UK of which 5.4 billion are not collected for recycling. The carbon footprint of 1kg of recycled polyethylene terephthalate (PET) bottles, for example, is 1.7kg CO2e when recycled and kept in the loop, as opposed to 4.2kg CO2e for the same weight of PET bottles made from virgin plastic. PET bottles currently boast a
REVERSE VENDING AROUND THE WORLD: NORWAY A deposit return scheme was introduced in Norway in 1999. However, Norway has a long-standing history of utilising RVMs dating back to the 1970s. As of 2016, drink containers can be returned and deposits retrieved at over 15,000 establishments in Norway. The collection system is 95% automated (using reverse vending machines) and only 5% manual.
https://depositreturnscheme.zerowastescotland.org.uk/ https://www.gov.wales/evaluation-digital-technology-deposit-return-scheme-reports UK Household Plastics Collection Survey 2021 UK Circular Plastics Network
https://depositreturnscheme.zerowastescotland.org.uk/
https://www.gov.scot/news/scotlands-deposit-return-scheme/ https://consult.defra.gov.uk/environment/introducing-a-deposit-return-scheme/ supporting_documents/depositreturnconsultia.pdf p. 49.
75% collection rate up from 60% in 2014 and 3% in 2001 but DRS hopes to close the gap further still by applying a deposit to drinks containers sold to consumers that is refunded upon return of the empty container. In Scotland, a 20p deposit will be applied to any drink purchased that comes in a single-use container made of PET plastic, steel and aluminium, or glass. Increased societal concern for the environment will be a key driver for the success of these schemes, which require consumers to recycle more bottles and cans outside of the house. But the benefits are many: reduced carbon emissions, improved and expanded recycling capabilities, and a third of litter off our streets according to Zero Waste Scotland.
REVERSE VENDING AROUND THE WORLD: GERMANY Germany first introduced a deposit return scheme in 2003. “Before 2003, some 3 billion disposable beverage containers were dumped in the environment every year,” Thomas Fischer, Head of Circular Economy at NGO Environmental Action Germany (DUH). The country now boasts a 98%+ return rate.* At its start, the majority of drinks containers (80%) were returned via manual handling but after 5-6 years of operation the pattern switched. Now approximately 80% of containers are returned to RVMs. *
https://www.dw.com/en/how-does-germanys-bottle- deposit-scheme-work/a-50923039
WHICH BUSINESSES WILL BE IMPACTED? While hospitality businesses like restaurants may be affected if they offer single use containers for takeaway, they are unlikely to require sophisticated equipment to handle returns. The same may be true initially for smaller shops though in cases such as Norway, over time shop keepers warmed to the presence of an RVM in their business to optimise the collections process and even managed to net a small profit from the increased efficiency. Larger retailers – expecting to handle much greater volumes – will benefit from investment in reverse vending machines (RVM). These machines automate the return process, identifying the inserted drinks containers and providing the necessary refund voucher to consumers.
THE COST OF INVESTING According to the Scottish Government’s DRS business case. the estimated cost of purchasing RVMs for Scotland is £64 million.
https://consult.gov.scot/environment-forestry/deposit-return-scheme/supporting_ documents/DRS%20%20Outline%20Business%20Case.pdf p. 101.
https://consult.defra.gov.uk/environment/introducing-a-deposit-return-scheme/ supporting_documents/depositreturnconsultia.pdf
https://consult.defra.gov.uk/environment/introducing-a-deposit-return-scheme/ supporting_documents/depositreturnconsultia.pdf
https://new.siemens.com/global/en/products/financing/whitepapers/whitepaper-
igniting-sales-the-vendor-finance-series.html
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