California has $600 million in unclaimed can and bottle deposits

SACRAMENTO, Calif. – California is sitting on a $600 million pile of unclaimed nickel and dime deposits on recyclable cans and bottles and now wants to give some of it back to consumers.

To get the state’s nearly 40 million residents to recycle more and send more deposit back to them, Gov. Gavin Newsom’s administration unveiled a plan on Friday to temporarily suspend refunds on a 12-ounce bottle or can to double a cent. California already pays 10 cents for containers over 24 ounces, and that would temporarily double to 20 cents.

The move would make California one of the highest-paying recycling programs in the country. Rachel Machi Wagoner, director of the California Department of Resources Recycling and Recovery, said the effort will help California regain the leading recycling company it was 35 years ago when it launched its cash refund program.

If someone in California buys a regular-sized soda, there’s a 5-cent fee that’s refundable if the container is brought back for recycling. Under Newsom’s plan, the deposit fee would remain the same, but the return amount would double. The aim is to increase the recycling rate for beverage packaging from 70% to at least 80%.

Oregon and Michigan are already offering 10-cent refunds, and advocacy groups say the amount for each glass or plastic bottle or aluminum can is enough for consumers to recycle at least nine out of every 10 containers.

President of advocacy group Consumer Watchdog, Jamie Court, a frequent critic of the recycling program, called the plan “a very positive move” and “a bold proposal to give people their money back.”

“This money isn’t doing anybody any good in the bank,” Court said. “We need a full structural repair, but it’s a good intermediate step.”

The California proposal fuels recent national efforts to encourage recycling as beverage retailers face increased pressure to include higher percentages of recycled material in their containers, said Heidi Sanborn, executive director of the National Stewardship Action Council.

Only 10 of the 50 states now have deposit programs, but many are considering them — potentially leading to a confusing patchwork and drink labels cluttered with different states’ deposit amounts, which retailers say they want to avoid.

California’s doubling of refunds would be temporary — a duration for the change has yet to be determined — and is expected to cost $100 million. If approved by lawmakers, the reimbursement increase would go into effect sometime in the next fiscal year, which begins July 1.

It’s uncertain whether a recycling boost would last after the higher price ends, Sanborn acknowledged, but she hopes California will instead decide to make the increase permanent. She also hopes that state pressure will spur attempts by US Representative Alan Lowenthal of California and US Senator Jeff Merkley of Oregon to draft a national bottle law.

Newsom’s plan also seeks to alleviate a shortage that began years ago when more neighborhood recycling centers closed and Consumer Watchdog said many grocery stores were also refusing to take back empties in-store as needed.

To increase access, the Newsom administration is proposing to spend $100 million on grants to add about 2,000 automated recycling machines, also called reverse vending machines, at high schools, colleges and retailers. Consumers drop their empty containers into the machines, which issue a refund.

Another $55 million would be used for federally funded mobile recycling programs in rural areas and other places with few recycling opportunities.

Consumers are very upset that “they can’t return their bottles and cans as promised and get their money back,” said Sanborn, who is also the head of California’s statewide commission on recycling markets and curbside recycling.

Sanborn blamed the state’s failure to quickly adapt its complicated payment formula to changing market conditions for the closure of many California recycling centers.

Much of California’s recyclables go to China, which in 2017 tightened standards for accepting contaminated material, including plastics. The move “has taken a toll on the recycling industry nationwide,” said Kate O’Neill, professor of environmental sciences and author of the 2019 book Waste at the University of California, Berkeley.

The U.S. market is now recovering with the addition of domestic recycling facilities, but there’s still a problem matching supply with demand, O’Neill said.

Recycling officials had expected beverage consumption to fall during the pandemic, as happens in most economic downturns, Waggoner said. Instead, container sales in California grew by 2.5 billion in three years to 27 billion last fiscal year, meaning a record amount of deposit money is going into the state’s recycling fund.

The number of depositable containers recycled in California hit a record high of more than 18.8 billion in 2021 — but that left a lot of money on the table.

Repeated attempts to improve the state’s recycling system have struggled in the legislature, even as California seeks to increase its recycling rates, minimize food waste and work toward a circular economy.

Wagoner said Friday’s proposal was an interim step as the government continues talks with lawmakers about permanent fixes.

Democratic state senator Bob Wieckowski said he tried a bill last year with proposals similar to what the administration is proposing now “and they didn’t want to hear about it.” He reckons people will now hoard their recyclables until the double take-back deadline, and then face long lines once it begins.

His proposal this year would place more responsibility on manufacturers to recycle their containers.

“It has a bit of sensationalism,” said Wieckowski about the country’s plan. “We have 45 patches in this program and at some point you have to get out of the patch business.”

– The Associated Press

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