California's CRV proposal elicits concerns

Ming’s Resources East Bay Corp., Hayward, California, and the Container Recycling Institute (CRI), Culver City, California, are expressing concerns about a proposed $330 million investment in California’s container deposit program. Representatives from the two organizations say the proposal falls short of improving recycling infrastructure in the state.

“It doesn't have goals and analysis of the problems with the existing program,” says Susan Collins, president of the CRI. “Without those goals, there are a bunch of areas where they have spending on different projects, but there's not a clear nexus between goal achievement, which projects were chosen and how much spending was chosen for each project.”

Enacted in 1987, California residents pay a California Redemption Value (CRV) when they purchase certain beverages from retailers in the state and receive CRV refunds when they redeem those containers at a recycling center. Most beverages packaged in aluminum, glass, plastic and bimetal containers are eligible for CRV. Containers for milk, wine and distilled spirits are not included in the CRV program. The CRV is 5 cents for each beverage container less than 24 ounces and 10 cents for each container 24 ounces or greater. Since being introduced, more than 300 billion aluminum, glass and plastic beverage containers have been recycled, according to CalRecycle (California Department of Resources Recycling and Recovery), the organization that oversees waste and recycling programs in California

In a statement given to Recycling Today, CalRecycle says the proposal would increase access to recycling opportunities in underserved communities by establishing new recycling centers, mobile recycling programs and automatic recycling machines. Using a consumer incentive credit, CalRecycle says it expects to increase recovery of beverage containers through the program. Finally, the proposal would provide market incentives for high-quality collection to support achieving minimum recycled-content goals and encourage remanufacturing.

The $330 million proposal allocates funding in various ways:

• $55 million to boost returns in rural and underserved communities with state-funded mobile recycling programs;
• $100 million to add about 2,000 reverse vending machines through grants to high schools, colleges and retailers that are obligated to redeem containers in-store;
• $100 million to double consumer refunds with bonus recycling credits once new mobile recycling and reverse vending machine programs are in place;
• $50 million to maximize the quality of recycled beverage containers to help more get recycled into new beverage containers, required by AB 793; and
• $25 million for new infrastructure and technology to support redemptions and administration costs.

However, the CRI and a representative from Ming’s say the proposal fails to address issues affecting the state’s recycling program.

Jeff Donlevy, the general manager of Ming’s Resources, says the proposed plan would spend money on short-term projects without fixing the long-term problems associated with California’s beverage container redemption program. He says the biggest issue with California’s CRV program is the lack of equitable access to redemption centers, which the proposal does not address.

Collins and Donlevy say they have concerns with one of the main aspects of the proposal: the installation of reverse vending machines (RVMs) at grocery stores. While they agree that the increased use of these machines will be helpful, both say they feel more could be done to make sure the program is efficient. 

“Stores need to be paid a handling fee for in-store redemption to use the RVMs and provide the service to consumers,” Donlevy says.

In a letter sent to CalRecycle expressing concerns over the proposal, the CRI says retailers have no legal way to easily deliver materials to processors to be reimbursed for the deposit refunds they hand out to consumers who return their containers. This makes it difficult to comply with the law without paying an opt-out fee. The program also requires training, which takes up to three days to complete, making it unattractive for store owners. As a result, it creates an unlevel playing field for those retailers that do participate in the program versus those that do not, the CRI says.

Donlevy and Collins say another issue with the proposal is that California’s mobile recycling program does not work.

The Beverage Container Recycling Pilot Program, created by Senate Bill 458, authorized CalRecycle to approve up to five pilot projects proposed by local jurisdictions to explore new models for CRV redemption in underserved areas. Assembly Bill 54 made changes to the pilot program to allow for greater flexibility and to provide up to $5 million in funding for approved projects.

Under this legislation, CalRecycle approved San Francisco’s pilot project that combines a traditional recycling center site with a bag-drop collection program that uses collection bins at various locations throughout the city. Consumers can locate collection bins using their mobile phones, drop their tagged bags of empty beverage containers in the bin and receive electronic payment for their materials within 72 hours after the material is processed.

Culver City's pilot also was approved. That project features a mobile redemption center that rotates between two selected locations six days a week for a total of 43 hours.

Despite the intention of making recycling easier, Collins and Donlevy say the results of the mobile programs are underwhelming because they are not available when people are not working.

The CRI adds that, currently, mobile recycling options exempt grocers from taking back containers. This, the organization argues, takes away convenience from consumers trying to get their deposits back without providing a viable alternative option.

“What the state needs are permanent, stationary locations where people know this recycling center is going to be here, five, six days a week, even on off-hours when people are not working,” Donlevy says. “We have to provide convenience. Without available recycling centers, the stores using RVMs will not have places to take the material received in the RVMs or someone to provide the collection service.”

One of the main issues Donlevy has with the proposal is the $100 million investment to double consumer refunds once more mobile operations and RVMs have been established. This is because it would require people without access to redemption centers to go out of their way to participate, which could be more costly.

“This doesn’t give the money to the areas where people have been losing their deposits because they don’t have any recycling centers nearby,” Donlevy says. “Or it would force them to drive 10, 20, 30, maybe 50 miles away to find a recycling center to get that double deposit.”

The letter CRI sent to CalRecycle says the expected increase in materials returned to redemption points also could result in facility closures. This is because they could max out their physical capacity, storage capacity, truck capacity and availability of employees to service the surge in customers and materials.

Instead, the CRI says the $100 million going toward doubling consumer refunds could be used to rebuild about 1,000 redemption centers across the state. This would expand access to recycling in areas like San Francisco, which has two redemption centers for the 900,000 people in the city.

“We wrote a report in 2016 that explained how many redemption centers had closed," Collins says. "We identified the source of the problem, which was [that] they were being underpaid. Over the course of a six-year period, more redemption centers closed until it got to the point where half of all the redemption centers in the state closed.”

The CRI says the closures are caused by inadequate redemption center processing payments from CalRecycle, which administers and provides oversight for recycling programs. Becuase of these underpayments and other factors, more than half of the state’s redemption centers have closed since 2013.

One of the most notable examples of company closures is rePlanet LLC, which operated a network of beverage container redemption centers throughout California since 1984. In 2019, the company closed 284 redemption centers throughout the state and laid off its entire work force, about 750 people. Prior to that in 2016, it closed 191 recycling facilities and laid off 300 employees.

At its height, the company operated 600 centers throughout the state, but the reduction in state fees, the depressed pricing of UBCs and polyethylene terephthalate (PET) plastic bottles and the rise in operating costs resulting from minimum wage increases and required health and workers compensation insurance forced the company to close.

Instead of the current proposal, Collins suggests mapping out the current redemption centers and potential spots for new centers.

Also, she says CalRecycle will need additional staff to monitor the program and to ensure the goals in the metrics are hit.

Donlevy suggests providing bonus deposits to consumers using new redemption centers, in-store take back or automated collection equipment in previously underserved areas for the first three months of operations. He also suggests providing funds to open new redemption centers in underserved areas, as approved by CalRecycle. Donlevy says quality incentive payments to curbside programs for aluminum, PET and glass based on the facility’s outbound quality also would be effective.

Despite the concerns Collins and Donley have raised, CalRecycle says the proposed changes would create more chances to recycle in underserved communities through mobile recycling programs. It says the proposal will add 2,000 RVMs to increase redemption access statewide and strengthen markets to support recycling/remanufacturing businesses by improving the quality of recycled beverage containers.

As it stands, it is unclear whether any of the suggested changes will be made to the proposal. However, CalReycle says California’s state legislature has the opportunity over the following weeks to further review the proposal and collaborate with the Newsom administration during the ongoing budget enactment process. A final vote could be made this summer, before lawmakers go on break.