In the forthcoming October/November edition of Solid Waste & Recycling magazine I write an editorial on what’s happening with stewardship for blue-box-type printed paper and packaging materials in the Province of British Columbia. (That edition will be printed and mailed, and online, at the end of October.)
In the meantime, and by way of background, I thought to offer readers a copy of an excellent article one of our contributing editors forwarded to me on eco fees that appeared recently in the Vancouver Sun. It’s a good and fair assessment of what’s taking shape in that province, and should be of great interest to readers across the country.
BC is really leading the charge on product stewardship and extended producer responsibility (EPR).
Here’s the article:
What’s the point of eco-fees?
Consumers pay them on increasing number of retail products to ensure their proper recycling
BY LARRY PYNN, VANCOUVER SUN
SEPTEMBER 28, 2012
Consider it the cost of doing the right thing.
Consumers may not know it, but they are paying eco fees at the point of purchase on an increasing number of products to cover the cost of having them properly recycled.
It can be pennies, such as with pop bottles and cans, or as much as $2.25 for blenders and coffee grinders, $5.50 for desktop computers and $10 for larger microwaves.
A common misconception is that the B.C. government collects the eco-fees and funnels the money back into general revenue.
In fact, it is industry that establishes and collects the eco-fees to cover recycling costs on a not-for-profit basis, although the province does benefit financially through collection of the harmonized sales tax on those fees.
One major exception is battery recycling, which pays for itself without an eco-fee due to the value of the lead; cellphones and pharmaceuticals also have no fees.
The goal is to keep eco-fees as low as reasonably possible to not discourage retail spending during fragile economic times.
“Industry doesn’t want to charge much of anything,” said Brock Macdonald, chief executive officer of the Recycling Council of B.C. “They don’t want the cost of their products to be any higher to their customers than possible.”
The province does not require retailers to list the eco-fee on sales receipts, meaning some do and some don’t.
Neil Hastie, chief executive officer for Encorp Pacific Canada, the beverage recycling company, argued that non-disclosure of the eco-fees on receipts is not an issue since the public ultimately pays the cost of recycling one way or the other.
“The illusion that … the companies are going to absorb that cost and not pass it on is naive at best,” he said.
A total of 14 industry-managed not-for-profit recycling sectors exist in B.C. as a result of the province’s Recycling Regulation of 2004, with a target recovery rate of 75 per cent.
The trend is going to grow as packaging and paper products, including solid foam, come into the fold by May 19, 2014, at an estimated recycling cost of $60 million to $100 million to year, said Allen Langdon, chairman of Multi-Material BC.
Deciding how much to charge for an increasingly diverse array of packaging types won’t be simple.
Fees differ based on the costs of recycling even products that seem similar, such as corrugated cardboard, box board, and mixed paper.
“There is no doubt that the fee process is extremely complex,” Langdon confirmed.
A box of cereal, for example, would have separate fees for the box and the bag inside.
A water bottle could includes separate fees on the bottle, the label, the cap, and the plastic film and/or cardboard it came in.
“Many of those fees are fractional, less than one cent … so the consumer would never know it,” Langdon noted.
Fees established for, say, recycling electronics include the cost of handling products that were sold before the industry stewardship program coming into effect.
“The fee on your flatscreen TV is going to pay for recycling one of those old cabinet TVs,” he said.
Homeowners pay a fixed blue-box fee through their municipal taxes regardless of how much packaging they use.
The new system adopts a more equitable user-pay system.
The province requires the various stewardship groups to publish annual reports and financial statements, and have third-party audits.
Hastie said the B.C. government does not act simply as a rubber stamp, noting that in one recent case the province expressed concern that glass containers in remote areas were being crushed and used for drainage around housing.
“They weren’t sure that was really the highest and best use,” he said, noting more glass is now being shipped to the Lower Mainland for recycling. “They pushed back. They do pay attention.”
In an unrelated case, the Environmental Appeal Board upheld the province’s decision in 2009 to rescind the stewardship plan of the Western Canada Computer Industry Association for various non-compliance issues related to competitor Encorp successfully forming an association with the Electronics Stewardship Association of B.C. to recycle computers.
Encorp provides employment for the equivalent of 700 full-time workers at 172 collection depots provincewide. The Burnaby-based company recycled 987 million containers in 2011, for a recovery rate of 80 per cent.
According to its latest annual report online, Encorp reported a total operating reserve of $20.3 million in 2011, raising questions as to whether the eco-fees charged consumers for recycling are too high. In 2009, however, the group ran a deficit of $1.4 million
Hastie explained that the goal is to maintain a reserve of $15 to $25 million to deal with the vagaries of currency and commodity markets such as for aluminum and plastic and that recycling fees go up and down accordingly.
The accounting group EPR Canada produced an “extended producer responsibility” report card in 2011 that gave B.C. the highest mark — an A-minus — among provinces and territories.
EPR liked the “clear focus” of the extended producer responsibility programs in B.C. for increasing diversion and reducing pollution through collection programs aimed at pharmaceuticals, rechargeable batteries and cellphones, beverage containers, specified hazardous/special wastes and waste electronics.
EPR added that an “innovative policy framework” allows industry to design and operate diversion programs.
However, EPR did not like that the timeline to achieve the 75 per cent target “varies by program” with “no penalties specified for failure to reach targets within timeline.”
And while B.C. requires an annual report including results of the third party audits, EPR noted that an assessment of program performance and annual report is not publicly available.
The federal government received an F score for failing to implement extended producer responsibility regulations for “toxic materials or products containing topics for which it has authority under the Canadian Environmental Protection Act.”