Bottle deposit pilot programs to help reimburse consumer CRVs are collapsing and burning, Consumer Watchdog reveals

LOS ANGELES , July 15, 2022 /PRNewswire/ — CalRecycle is building on statewide pilot programs, including “mobile” return pilots, to make it easier for consumers to get California cashback value (HRV) refunds as the bottle deposit system collapses. But a Consumer Watchdog survey reveals that drivers aren’t practical, financially viable, or remotely successful as models for saving the system.

In one case, San Franciscoit costs $1.25 per bottle or can to return a nickel to the consumer. None of the pilot programs appear to generate enough volume to sustain the program when the initial pilot grant money runs out.

“CalRecycle, the state’s recycling regulator, has pushed city- and county-based pilots as an ‘innovative’ solution to the buy-back crisis,” according to a new report. Pilot Error: How CRV Refund Pilot Programs Crash and Burn. See the report here: https://consumerwatchdog.org/sites/default/files/2022-06/PILOT%20ERROR%20report.pdf

“A review of these state-funded pilots shows that they are not creating a new, financially viable redemption model or improving the rate at which consumers return bottles and cans for CRV refunds. In at least one case, the pilot created a market-relation that enriched grocers and their advisers at the expense of taxpayers and consumers.

“Consumer Watchdog reviewed the results of four bottle return pilots in San Francisco, San Mateo, City of Culver and irvine that CalRecycle funded with $5 million in grants allocated by the legislature in 2019. A fifth pilot program in Sonoma County which began in early April contains too little data to conduct a review. The data shows that the “mobile” recycling tried in three of the pilot projects does not work and is not financially justified. A fourth stationary pilot works but is unlikely to survive. Nevertheless, despite the failure of mobile recycling in all areas, CalRecycle recently proposed $70 million to create new mobile recycling projects in underserved areas.”

“None of these pilots offer practical and financially viable solutions for consumer access to CRV refunds,” said the report’s author, consumer advocate. Liza Tucker. “One, in San Francisco, is a blatant ploy to get retailers off the recycling hook, not to improve consumer access to deposit refunds. What we need is systemic reform, including the provision of convenient, modern technology and the reimbursement of CRV by the state’s largest supermarket chains.”

The report finds:

  • CalRecycle-approved pilots restrict consumers’ access to buy-back because they exempt all retailers in a jurisdiction from in-store buy-back requirements or paying state fines to get out of recycling. In San Franciscomore than 400 stores stopped trading bottles and cans when the pilot was deemed operational.
  • Conflicts of interest in the San Francisco Department of the Environment’s “BottleBank” pilot project have enriched connected consultants. Between 2017 and November 2021consultants of a grocers association obtained more than $700,000 in CalRecycle grant money. They achieved the retailers’ main goal – exempting them from redemption responsibilities – but failed to produce a viable pilot program. Consumer Watchdog called for an investigation by city and state officials based on those findings.
  • Two of the pilots turn out to be financially bankrupt. In San Franciscoit costs the pilot operator $1.25 per container to return a nickel to a consumer. In irvinewhere customers schedule to pick up containers from their homes, it costs $0.14 per container to reimburse a consumer a nickel.
  • In San Mateoit currently costs just over half a nickel to refund a nickel deposit when it costs the City of Culver driver a penny and a half. In the real world, however, recycling centers must generate a lot of CRV container volume to make scrap metal sales profitable in the face of inadequate state subsidies, especially in high-cost areas like these. These pilots are not likely to generate enough volume to do so without outside financial support.
  • Mobile recycling is largely an illusion. For instance, that of San Francisco “mobile” project consists of two trucks parked in three different parking lots for four hours a day six days a week. Culver City consists of a truck called a “mobile redemption center” that travels between two grocery parking lots less than a quarter mile apart to provide fixed redemption service.
  • irvine is the only city whose recycling program is actually mobile: it picks up bottles and cans from people’s homes. However, it serves around 10-15 customers a day in a city of 273,000 people and therefore has no prospect of financial success.
  • Drivers in San Francisco, San Mateo and City of Culver are not practical. They offer part-time or full-time redemption service primarily on weekdays and only during normal working hours when consumers cannot recycle. This means that the pilots take very limited container volumes, which dooms them to failure.
  • Pilots would be more financially stable if they received financial support and donated parking spaces from beverage retailers, producers and distributors. Yet there is no requirement for retailers to donate a parking space or provide direct financial support in exchange for full recycling exemptions.

“Pilots will not lead to a new container buyout model that largely and conveniently serves 40 million California consumers,” the report concludes. “Only a systemic overhaul of the redemption system with widespread convenience will increase redemption rates.

“In general, reverse vending machines and bag drop technologies used in or near supermarkets in most other bottle drop states are much more convenient, available during and after hours, and are driving rates This results in collection and processing costs of empty containers down to a sustainable and acceptable minimum Administration must recognize that only increasing the number of refund opportunities by requiring retailers to they offer a bigger refund, not less, will increase the refund rate.”

SOURCE Consumer Watchdog

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