The NSW Container Deposit Scheme (the Scheme) commenced on 1 December 2017, with a 10 cent refund claimable on eligible containers.
Under the Scheme, operators of Material Recovery Facilities (MRFs) can claim a portion of the refund on containers collected from kerbside recycling using the MRF Protocol.
MRFs could begin claiming a refund on containers they process for councils on 1 December 2017. However, MRFs can only continue to claim the refund after 1 December 2018 where:
- the MRF and council have put a refund-sharing agreement in place if there is no existing refund-sharing agreement; or
- the council notifies the Environment Protection Authority (EPA) in writing that in the circumstances it is fair and reasonable if there is an existing refund-sharing agreement.
Councils should note that under clause 18 of the Waste Avoidance and Resource Recovery (Container Deposit Scheme) Regulation 2017, if a council enters into a processing agreement with a MRF operator on or after 1 December 2017 that does not address CDS refund-sharing arrangements, the MRF operator will continue to receive the entire CDS revenue stream.
Impact of the CDS on MRFs and viability issues affecting the recycling industry
The NSW Government is committed to supporting councils access to refunds from the eligible containers collected via kerbside recycling, to facilitate downward pressure on waste charges or improved waste services.
To assist in this, the Government has commissioned the Centre for International Economics (CIE) and Anne Prince Consulting (APC) to examine the impact of the Scheme on the business economics of MRFs. They have also assessed various revenue sharing arrangements along with wider viability issues currently affecting the recycling industry.
Key findings from CIE and APC include:
- A high proportion of eligible household containers in NSW are anticipated to still be processed through kerbside recycling. This is a potentially significant revenue stream for councils and MRFs.
- The direct cost of CDS compliance on MRFs is very low (around 5% of CDS kerbside revenue).
- Eligible containers are worth more from the CDS than their current commodity value.
- It is estimated that the additional revenue stream from eligible containers through kerbside recycling could be worth around $100 million per annum for councils and MRFs across NSW. In terms of the revenue per input tonne, it is estimated that the number of eligible containers per tonne of inputs into the MRF will be at least 1500 to 2000, implying an available refund of $150 to $200 per input tonne.
- A proportion of CDS revenue may assist councils in their negotiations with MRFs to address broader MRF and recycling viability issues, instead of higher gate fees.
The webinar held on Friday 6 April 2018 is now available.
- CDS Webinar Presentation Friday 6 April 2018 – Kerbside Recycling and the Container Deposit Scheme – PDF
To complement key findings from CIE and APC, a negotiation tool has been developed.
Presented as an Excel spreadsheet, the tool allows councils to assess various refund sharing arrangements under different scenarios, in order to guide the development of a negotiating position with their MRF.
- Instructions for Using Container Deposit Scheme Models – PDF
- Scenario Model for Impacts on a MRF – EXCEL
This support aims to ensure that councils and their ratepayers are well placed to share in the proceeds of refunds claimed under the Scheme.
- Council Circular 18-09 – Support for councils in relation to kerbside recycling and the impact of the Container Deposit Scheme (CDS)
- Council Circular 17-25 – Container Deposit Scheme and waste management contracts
- The CIE APC Final Report – Revenue sharing arrangements between MRFs and councils from the NSW Container Deposit Scheme – PDF