Insights / Sustainability

Container Deposit/Refund Programs: Incentivizing Package Recycling

Reverse vending machine for container refunds

Container deposit/redemption regulations ("bottle bills") refer to recycling programs that charge consumers a deposit fee for beverage products at the point of sale and refund the fee when consumers return the empty containers to retailers or redemption locations.

Currently, all Canadian provinces and 10 U.S. states operate deposit/refund systems. Depending on the state, beverage products typically include beer, wine, carbonated soft drinks, liquor, and water. Container types cover glass, plastic, metal, steel, and aluminum. Deposit amounts range from five cents to 15 cents, depending on the beverage type and container size.

Why Bottle Bills Matter

Bottle bill programs incentivize consumers to recycle their beverage containers, reduce littering and pollution, increase package recycling rates, and complement curbside recycling efforts.

On average, the 10 states with deposit/refund systems recycle 60% of their beverage containers, while the 40 states without such programs recycle only 24% — proving that financial incentives boost recycling rates.

Beverage Packaging Recycling Rates

While container redemption programs work, recycling rates in the 10 bottle-bill states have fallen over the past decade. According to figures from the Container Recycling Institute (CRI), beverage container redemption rates for 2022 in seven of the nine bottle-bill states with available data dropped or remained within +/-1% compared to 2021. Only Maine and Oregon saw an increase in redemption rates from 2021 to 2022.

“Stagnant or dropping redemption rates point to the need for program modernizations, such as higher container deposit amounts, coverage of more beverage types, and additional convenient options for consumers to return bottles and cans,” explained CRI President Susan Collins. “Several bottle-bill states still do not include deposits on non-carbonated drinks, including bottled water sales of which have skyrocketed since the deposit return systems were implemented in the 1970s and 1980s.”

Container with 10 cent refund value

Redemption amounts set at 5 cents more than 40 years ago have not kept pace with inflation. Oregon and Michigan, two states with a 10-cent deposit value, rank no. 1 and no. 3 in beverage container recycling rates in the U.S. When Oregon raised its deposit from 5 cents to 10 cents, the redemption rate jumped 22% in three years.

Recent Bottle Bill Legislation

In the past few years, three U.S. states and a Canadian province expanded their container deposit/redemption laws by adding more product categories (e.g., wine, energy drinks, hard seltzer) with deposits and raising the redemption value.

In 2021, Connecticut passed a law (Public Act No. 21-58) expanding its container deposit program to include alcoholic nips (single-shot liquor bottles), hard seltzer, hard cider, and a variety of non-carbonated ready-to-drink beverages, such as juice, tea, coffee, kombucha, plant-infused drinks, sports drinks, and energy drinks in 2023. The 5-cent deposit applies to glass, plastic, and metal packaging.

Exemptions to the law include containers smaller than 150 milliliters, carbonated beverages larger than 3 liters, and non-carbonated beverages larger than 2.5 liters. Beginning January 1, 2024, the 5-cent deposit on all covered products will increase to 10 cents, joining Michigan and Oregon as the only other states with a 10-cent value.

Last fall, California passed legislation (Senate Bill No. 1013) adding wine and distilled spirits to its bottle bill. Beginning January 1, 2024, a 10-cent refund value will apply to most of the wine and distilled spirit containers sold in California annually, while a 25-cent refund value will apply to wine sold in difficult-to-recycle boxes, bladders, pouches, and similar plastic containers.

Beginning July 1, 2025, wine packaged in a can will carry a 10-cent deposit in Oregon.

In 2020, Quebec updated its bottle bill requirements to include all beverage containers ranging from 100 milliliters to 2 liters. The modernized deposit-refund program will roll out in two phases. Beginning November 1, 2023, phase 1 will cover beer and soft drink containers and aluminum containers (e.g., juice, cider, or sparkling water cans). Starting March 1, 2025, phase 2 will target all ready-to-drink beverage containers from 100 milliliters to 2 liters.

The information contained in this article is intended for general information purposes only and is based on information available as of the initial date of publication. No representation is made that the information or references are complete or remain current. This article is not a substitute for a review of current applicable government regulations, industry standards, or other standards specific to your business and/or activities and should not be construed as legal advice or opinion. Readers with specific questions should refer to the applicable standards or consult with an attorney. It is the customer's responsibility to determine whether its filled product is subject to any applicable government regulations and to ensure compliance with such regulations.

Explore related topics: Life-Cycle Assessment, Ocean-Bound Plastic, PCR Content, Compostable Packaging, Refillable & Reusable Packaging, Mechanical and Advanced Recycling,and Bioplastic

Robert Swientek

By: Robert Swientek
Date: October 12, 2023

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