Container Group Blasts State of California – Consumers Cheated Out of $308 Million 2017-18

Non-Profit Container Recycling Institute Confronts Closures of Recycling Centers

CRI Response to Closure of Nearly 300 Bottle Redemption Centers in CA

State’s Recycling System Needs Significant Overhaul for Consumers and the Environment

CULVER CITY, CA, AUGUST 7, 2019 – This week’s closure of 284 recycling redemption centers (RCs) by rePlanet, the largest operator of such centers in California, marks the latest and most significant setback to the state’s container deposit system (referred to as a bottle bill). Now is the time for Gov. Gavin Newsom to work with the state legislature and the California Department of Resources Recycling and Recovery (CalRecycle) to overhaul the bottle bill, which historically has resulted in the recycling of more than 50 million beverage containers daily – 20% of the nationwide total – in the process saving enough energy each year to power the equivalent of 300,000 households.

It is particularly troubling that this situation was entirely preventable. For the past three years, the Container Recycling Institute, a Southern California-based nonprofit recycling authority, has repeatedly drawn attention to the dire consequences caused by inadequate RC processing payments from CalRecycle, the state agency that administers and provides oversight for recycling programs.

Because of these underpayments that have prevented a significant number of RCs from remaining solvent, along with historically low scrap prices and minimum wage increases for RC employees, more than half of the state’s nearly 2,600 RCs in operation in 2013 have since closed, and California’s recycling rate has dropped 10 percentage points (from 85% to 75% for all beverage containers combined). In addition, the loss of RCs has meant fewer jobs – the termination of 750 in the case of the rePlanet RC closures alone.

While California strives to be “best-in-class” on environmental issues – from addressing our climate crisis to keeping plastic out of our oceans – the state’s bottle bill actually remains one of the most inconvenient in the world. There are more than 50 container deposit programs across the globe, but only California employs a payment system that imparts such high levels of financial risk and uncertain and inadequate payments to RCs. Because other systems don’t have these flaws, none of them would allow – as California’s law has – one-fifth of their redemption locations to close in one week (part of over one-half during the last five years), with no realistic backup plan in place.

The consequences for consumers and the environment are dire. Deposit systems typically result in beverage container recycling rates two to three times higher than the rates of other recycling programs – making structurally sound deposit systems crucial to reducing energy use and carbon emissions because fewer containers need to be made from virgin materials. Besides seriously impacting the environment, the availability of fewer RCs also means fewer opportunities for consumers to get back their bottle deposits. According to CalRecycle, in fiscal year 2017-18, Californians lost out on $308 million in unredeemed deposits – an all-time high for the state.

The solution to California’s bottle recycling crisis requires two approaches: 1) a significant overhaul of the current system, and 2) specific immediate actions by CalRecycle.

At a minimum, structural changes to the container deposit system should include:

An expansion of the system to also accept wine and spirit containers;
An increase in the container deposit from 5 cents to 10 cents to incentivize more bottle returns; and
Predictable and sufficient funding for RCs.

California’s leaders can look to Oregon for an example on how to maintain, expand and continuously improve a container deposit system. In the past several years, Oregon has authorized the development of more RCs (with 20 new sites opened), increased the deposit from a nickel to a dime, and simplified the bottle drop-off process with a consumer-friendly program called “BottleDrop.” As a result, the state’s container deposit redemption rate increased from 64% in 2016 to 81% in 2018.

Regarding CalRecycle, CRI applauds the agency for taking swift action this week to update information on its website. The newly closed RCs have been removed from the website and a list of retailers that redeem in-store has been added. CalRecycle should also immediately:

Prioritize enforcement of the “return-to-retail” commitment of the 1,000-plus beverage retailers (including supermarkets) that have pledged to accept back empty containers and provide refunds to consumers.
Instruct beverage retailers that are not currently return-to-retail sites to place signage directing consumers to the nearest location for redeeming containers.

If the current downward commodity pricing trend continues without structural adjustments to California’s processing payment formula, RCs’ cumulative net losses will inevitably force even more of them out of business. Further closures will mean additional reductions in recycling opportunities, less recovered income for consumers, fewer jobs, and significant harm to the sustainable economy and the environment.

It is incumbent upon all of us to communicate with elected officials on the need to restore adequate processing payments to RCs to not only keep California’s vital recycling system alive, but to make it truly “best-in-class.”

The nonprofit Container Recycling Institute is a leading authority on the economic and environmental impacts of used beverage containers and other consumer product packaging. Its mission is to make North America a global model for the collection and quality recycling of packaging materials.

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California’s Beverage Container Redemption Center Crisis: Facts and Figures

In 2013, at the deposit program’s peak, 2,578 RCs operated in the state.
According to CalRecycle, before this week, 1,506 of those RCs remained open.
With the loss of the 284 rePlanet sites, the number now stands at 1,222, meaning 53% of the state’s RCs have closed since 2013.
Before the rePlanet RC closures, California had only one RC for every 26,000 people, with several “recycling deserts” providing virtually no access. Oregon, despite having a population only one-ninth that of California’s, has at least 40% more redemption locations.
On average, factoring in the loss of the rePlanet RCs, each remaining center in California now must accommodate 122% more people than they did in 2013.

They MUST Pay You – Here’s the CRV LAW.

Use The List We Provided on Previous Post. Take Your Bottles to “Option A” Locations.

They Are Required By Law To Pay You. Here is the Complete Law From CalRecycle. Print This Out and Take it With You.

Refusal to Accept Eligible CRV Containers

The Recycling Armageddon Hits California

rePlanet Is Closing Down

The Large Chain of Bottle and Can CRV Redemption Centers Is Gone. About 800 Employees Lose Jobs.

Consumers Losing Millions in CRV System and Now Cannot Find Deposit Refund Locations.

by Paul Hunt

“Canageddon”, the Recycling Armageddon has hit California. The huge project to Recycle bottles and cans is spinning out of control amidst a seemingly never ending assault of criminals, fraudsters and mis-management. The two big factors of the week is the decline in redemption centers like rePlanet, where consumers can turn in their bottles and cans and get their cash deposit back, and a double whammy as China has just announced an astounding 25 percent tariff tax on recycled products shipped to China.

As consumers face mounting problems finding a place to redeem their bottles and cans, the State has failed to provide convenient locations to do so. Facing insolvency, private companies are closing down, and some partner Cities like Santa Monica, are shutting down their recycling yards. The State, however, continues to rake in millions of dollars per year. Simply put, everyone pays the deposit fee of 5 cents or 10 cents per beverage container (depending on size). This money is supposed to be held in trust for the consumer until the bottles and cans are returned. The big factor here is that the State takes in hundreds of millions, and by letting redemption centers and recycling yards close down, they pay out less and less every year back to the consumer, thus making more money every year.

A Merry-Go-Round of corruption.

The State’s program is rife with fraud and corruption. Here’s a few bullet points:

–Independent Recycling yards have been caught “laundering” bottles and cans from out of state. Since the price, say for a pound of aluminum cans is less than the CRV deposit of 5 cents each can, crooks are bringing in tons of the cheap cans from Arizona and Nevada and selling them to California for CRV. These cans are not marked on the bottom with California’s unique recycle logo, but is anyone checking?

–The distributors and large outfits are responsible for paying the CRV to the State. Here’s a good one: Walmart, one of the biggest players “forgot” to pay the State for 5 years. When they were caught by a routine audit, it was found that they owed $14.5 million dollars. Out of about 3,000 distributors only about 50 are audited every year.

–Since inflation eats into the profit and operating costs of companies, many outlets and redemption centers are closing down. In the last few years over 1,300 redemption centers have closed. As the expenses rise, like wages, many companies start losing money, because they are stuck with a set CRV. In times past, when the world economy was growing, China paid more for the aluminum than the CRV, so the centers could pay the consumers their deposit back and still make money selling to China.

–China just announced that they are going to slap on a whopping 25 percent tariff on recycled materials coming into their country. This is in retaliation for the U.S. putting tariffs on Chinese goods. The price of recyled materials is dropping way below the CRV, another loss for the redemption yards.

–The Cities are also shutting down their yards that pay CRV deposits to consumers. They found a better way to scam money out of this. The yards were also losing money in higher labor costs and lower pricing on the recycled bottles and cans. By shutting down the yard, there is no more pay-out to the consumer, no more wages to employees, no more employees at all. A big savings. Meanwhile they tell the consumers to please put their bottles and cans into the blue recycling bins at their house or apartment. This gives a huge flow of material to the City that they can sell back to the State. It is estimated that this “curbside” collection scheme costs cities about 20 million to run but throw off an astounding $140 million in profit!

–And then there is the lazy consumer. The CRV deposit is only a nickle or a dime, chump change, so why bother with it? That’s exactly what the State wants the consumer to do: be lazy and forget about getting your deposit back. The State then reaps in something like $200,000,000 every year in the difference, unclaimed deposit money.

–Homeless folks and low income folks often have turned to recyling to augment or make a meagre living with CRV. Lots of folks collect cans and bottles. These folks are now being shut out by the closing down of payment centers.

Back to rePlanet, one of the few redemption outfits. Their locations are being closed. Calls to their corporate office go to a recording that they are closed. Calls to David Lawrence, the CEO and also the head of media relations, don’t get a response. Neighbors at some of the redemption huts say that Friday August 2nd was their last day. Employees were told a couple hours before closing that they were being laid off. rePlanet had 800 or so employees at one time. Now they are out of a job, like the employees of the Santa Monica recycling center and over a thousand other centers. The State agency, CalRecycle, put out a one line statement “CalRecycle is working to gather more information about rePlanet’s announced closures and the resulting impact on California consumers.” (rePlanet has nothing about closing on it’s webpage.). Buckle up folks, it’s CANAGEDDON.

Many thanks to Susan Collins of Container Recycling Institute for an astounding amount of research on their web site. www.container-recycling.org.