Digital deposit return scheme: PwC study scrutinised and found to be too weak

Full analysis here Minister of Environment Zuhal Demir (N-VA) took the initiative when OVAM figures showed that 18,171 tonnes of litter still need to be cleared up annually in Flanders. At the end of December, the Flemish government gave permission to test the Belgian packaging industry's proposal for a digital deposit system through pilot projects. In the digital deposit system, two codes must be scanned before you can throw packaging into the blue bag at home or in 'public blue bins'. The minister requests that the evaluation of this system takes place in 2023. The ultimate goal is the introduction of deposit return schemes on bottles and cans in 2025 with a system that is technically feasible and accessible to everyone. It must also effectively tackle the problems: drastically reducing litter and promoting the circularity of high-quality materials. Minister of Environment Zuhal Demir (N-VA) explained that if the digital system is not superior to a regular deposit return scheme, she will introduce a classic deposit system. Under this system, people get money back when they return empty cans and bottles to retail outlets. OVAM confirmed this in the call to companies wishing to play a role in setting up the system Digital Deposit System A digital deposit system has not yet been applied anywhere in the world. There is no practical example of if and how it would work. There is no empirical data available and whether this system can achieve the same results as classic deposit return schemes. There are only a few studies on this subject, including the study “Every Packaging Counts DDRS Blueprint” which the Belgian packaging industry commissioned from PricewaterhouseCoopers (PwC). The PwC study was delivered to the packaging industry at the end of September 2022. They kept the study secret. Only after the government decision and under pressure from the opposition and the media did Minister Demir ensure that the study was made public. That was on 13 January 2023, three weeks after the Flemish government's decision. Study commissioned by the packaging industry We analysed the blueprint for digital deposit return schemes. The packaging industry commissioned consultancy firm PwC to produce a report that could “serve as a clear, evidence-based argument as to why this approach is better than the classic deposit return scheme”. That is why we also look critically at the study, pointing out its limitations and the questions that remain to be answered. Our analysis presents both systems, including their respective costs and implementation timetables. 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 the potential for reuse. PwC's study does not prove that the introduction of a digital deposit scheme by 2025 is feasible, on the contrary. Nor does the PwC study show that the scanning system would be effective in reducing litter, something that the classic deposit return scheme has proven and is proving in neighbouring countries. Our analysis points to the many risks for the consumer: exclusion of people who do not have access to the internet or to 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 misuse of the system are also problematic for users. These barriers jeopardise the use of the system and therefore its success. Our analysis shows that the digital deposit scheme does not meet the objectives of improving recycling quality or adapting to European standards on reuse. This is highly problematic as Europe is planning a rapid transition to a more circular economy at European level. The effect on litter has also not been demonstrated. Yet, the fight against litter was the starting point for Minister Zuhal Demir when she announced the deposit return scheme. Finally, the PWC study shows that a digital system would require a significant contribution from Belgian municipalities. Whether this concerns the placement of more than 136,000 additional public litter bins or the possible management of home scanners for households. Many elements in the study still need to be clarified: The cost-benefit analysis contains no data and incorrect calculations, and the governance layer of the study is missing. Conclusions Our analysis shows that the feasibility of the digital system is far from proven. Consequently, it is unrealistic that a digital deposit scheme can start by the 2025 deadline. Even more worrying is that the PwC study does not show that the digital system would achieve the intended goals, namely: reduction of litter, increase of recycling quality. Why set up a digital system that has not been proven to work?

Minister of Environment Zuhal Demir (N-VA) took the initiative when OVAM figures showed that 18,171 tonnes of litter still need to be cleared up annually in Flanders.

At the end of December, the Flemish government gave permission to test the Belgian packaging industry's proposal for a digital deposit system through pilot projects. In the digital deposit system, two codes must be scanned before you can throw packaging into the blue bag at home or in 'public blue bins'. The minister requests that the evaluation of this system takes place in 2023.

The ultimate goal is the introduction of deposit return schemes on bottles and cans in 2025 with a system that is technically feasible and accessible to everyone. It must also effectively tackle the problems: drastically reducing litter and promoting the circularity of high-quality materials.

Minister of Environment Zuhal Demir (N-VA) explained that if the digital system is not superior to a regular deposit return scheme, she will introduce a classic deposit system. Under this system, people get money back when they return empty cans and bottles to retail outlets. OVAM confirmed this in the call to companies wishing to play a role in setting up the system

Digital deposit system

A digital deposit system has not yet been applied anywhere in the world. There is no practical example of if and how it would work. There is no empirical data available and whether this system can achieve the same results as classic deposit return schemes. There are only a few studies on this subject, including the study “Every Packaging Counts DDRS Blueprint“ which the Belgian packaging industry commissioned from PricewaterhouseCoopers (PwC).

The PwC study was delivered to the packaging industry at the end of September 2022. They kept the study secret. Only after the government decision and under pressure from the opposition and the media did Minister Demir ensure that the study was made public. That was on 13 January 2023, three weeks after the Flemish government's decision.

Study commissioned by the packaging industry

We analysed the blueprint for digital deposit return schemes. The packaging industry commissioned consultancy firm PwC to produce a report that could “serve as a clear, evidence-based argument as to why this approach is better than the classic deposit return scheme”. That is why we also look critically at the study, pointing out its limitations and the questions that remain to be answered.

Our analysis presents both systems, including their respective costs and implementation timetables. 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 the potential for reuse.

The PwC study does not prove that the introduction of a digital deposit scheme by 2025 is feasible, on the contrary. Nor does the PwC study show that the scanning system would be effective in reducing litter, something that the classic deposit return scheme has proven and is proving in neighbouring countries.

Our analysis points to the many risks for the consumer: exclusion of people who do not have access to the internet or to 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 misuse of the system are also problematic for users. These barriers jeopardise the use of the system and therefore its success.

Our analysis shows that the digital deposit scheme does not meet the objectives of improving recycling quality or adapting to European standards on reuse. This is highly problematic as Europe is planning a rapid transition to a more circular economy at European level. The effect on litter has also not been demonstrated. Yet, the fight against litter was the starting point for Minister Zuhal Demir when she announced the deposit return scheme.

Finally, the PWC study shows that a digital system would require a significant contribution from Belgian municipalities. Whether this concerns the placement of more than 136,000 additional public litter bins or the possible management of home scanners for households.

Many elements in the study still need to be clarified: The cost-benefit analysis contains no data and incorrect calculations, and the governance layer of the study is missing.

Conclusions

Our analysis shows that the feasibility of the digital system is far from proven. Consequently, it is unrealistic that a digital deposit scheme can start by the 2025 deadline.

Even more worrying is that the PwC study does not show that the digital system would achieve the intended goals, namely: reduction of litter, increase of recycling quality. Why set up a digital system that has not been proven to work? Especially when the classic system works and is being set up in a whole 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 the shoulders of municipalities.

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