Digital deposit: PwC study vetted and found too weak

by Chloe Schwizgebel | 7 February 2023

Flemish minister of the environment Zuhal Demir (N-VA) took the initiative when OVAM figures showed that 18,171 tonnes of litter still need to be cleaned up every year in Flanders.

The Flemish government gave permission in late December to test the Belgian packaging industry’s proposal for a digital deposit system through pilot projects. With a digital deposit system, two codes have to be scanned before you can throw a package in the blue bag at home or in ‘public blue bins’. The minister asked that the evaluation of this system be done in 2023.

The end goal is to introduce deposits on bottles and cans by 2025 with a system that is technically feasible and accessible to all. It should also effectively address the problems: drastically reduce litter and promote the circularity of high-quality materials.

Environment minister Zuhal Demir (N-VA) explained that if the digital system is not superior to an ordinary deposit system, she will introduce a traditional deposit system. In doing so, people get money back when they return empty cans and bottles at points of sale. OVAM confirmed this in a call to companies willing to play a role in setting up the system

Digital Deposit Return System

A digital deposit system has not yet been implemented anywhere in the world. There is no practical example of if and how it would work. No empirical data are available and whether the same results can be achieved with this system as with the traditional deposit. Only a few studies exist on the subject, including the study “Every Packaging Counts – DDRS Blueprint” which the Belgian packaging industry ordered from PricewaterhouseCoopers (PwC).

PwC’s study was delivered to the packaging industry at the end of September 2022. Who kept the study secret. Only after the government decision and under pressure from opposition and media did minister Demir arrange for the study to be made public. That was on 13 January 2023, three weeks after the Flemish government’s decision.

Study commissioned by packaging industry

We analysed the blueprint of this study. The packaging industry commissioned consultancy firm PwC to produce a report that could “serve as a clear, quantified argument as to why this approach is better than the traditional deposit system”. Therefore, we also take a critical look at the study and point out its limitations and the questions that remain to be answered.

Our analysis presents both systems, including their respective costs and timing of implementation. We look at whether the digital system is as effective as the classic one in terms of waste reduction, return rate of high-quality materials and potential for reuse.

PwC’s study does not prove that the introduction of a digital deposit is feasible by 2025, quite the contrary. Nor does the PwC study show that the scanning system would be effective in reducing litter – something the traditional deposit system has proven and is proving in neighbouring countries.

Our analysis highlights the many risks for consumers: exclusion of people who do not have access to the internet or a bank account. Only half of the Belgian population has the necessary digital skills. The need to share personal data and the risks of fraud or abuse of the system are also problematic for users. These barriers jeopardise the use of the system and hence its success.

Our analysis shows that digital deposits do not meet the objectives of improving the quality of recycling or aligning with European standards on recycling. This is highly problematic because Europe is planning a rapid transition to a more circular economy at the European level. The effect on litter has also not been shown. However, the fight against litter was the starting point for minister Zuhal Demir when she announced the deposit system.

Finally, the PWC study shows that a digital system would require a significant contribution from the Belgian municipalities. Be it the installation of more than 136,000 additional public dustbins or the possible management of home scanners for households.

Many elements in the study have yet to be clarified: the cost-benefit analysis lacks data and incorrect calculations, and the study’s governance layer is missing.

Conclusions

Our analysis shows that the feasibility of the digital system is far from proven. Consequently, it is unrealistic that digital deposits can be launched by the 2025 deadline.

More worryingly, the PwC study fails to show that the digital system would achieve the intended goals of: reducing litter, increasing recycling quality. Why set up a digital system that has not been proven to work? Especially when the classic system works and is set up across a range of European countries. Finally, this system does not appear to be accessible to all consumers, and places an unnecessary budgetary and organisational burden on municipalities.

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