City, date Title to be decided on Jürgen Resch Executive Director of Deutsche Umwelthilfe (NGO)

1. City, date Title to be decided on Jürgen ReschExecutive Director of Deutsche Umwelthilfe (NGO)

2. Overview • Who is Deutsche Umwelthilfe (DUH) and what does it do? • Main findings of the study „Reuse and Recycling Systems for Selected Beverage Packaging from a Sustainability Perspective” carried out by PwC • Fairytales and real facts about deposit systems

3. Who is Deutsche Umwelthilfe (DUH) and what does it do?

4. Deutsche Umwelthilfe (DUH) • Independent non-governmental organization • Nature and consumer protection • Founded in 1975 • 85 employees • Classical nature protection projects and policy campaigns • Deposit systems for beverage packaging • High standards for recycling (WEEE, packaging etc.) • Low sulfur fuels • Renewable energy • …

5. Main findings of the study „Reuse and Recycling Systems for Selected Beverage Packaging from a Sustainability Perspective” carried out by PwC

6. Why another study about deposit systems? • A lot of studies regarding deposit systems with false data and unrealistic assumptions – and thus wrong conclusions – on the market • Certain industrial sectors (e.g. big beverage producers like Coca-Cola, retailers and waste management companies) have commissioned tainted studies arguing against deposit systems • Most available studies focus either on environmental or on economic aspects of collection and recycling systems for beverage packaging

7. Taking stock of the past, taking reality into account: PwC study on deposit systems • Reuse and Recycling Systems for Selected Beverage Packaging from a Sustainability PerspectiveAn analysis of the ecological, economic and social effects of reuse and recycling systems and approaches to solutions for further development • Commissioned by the independent NGO Deutsche Umwelthilfe • DUH as Carried out by the auditing and consulting organization PricewaterhouseCoopers (PwC) • For the first time a sustainability check on systems for collection and recycling of beverage containers

8. A global PwC team effort PwC Germany Dieter W. Horst Miriam Scherf Jens Brodersen PwCPoland Agnieszka Rum PwC UK Henry le Fleming PwC Japan Akira Hayakawa PwC USA Alexandre Rossin PwC Spain MariluzCastilla PwC Austria Philipp Gaggl PwCAustralia Kerryn Schrank

9. Scope of the PwC study • Three different systems for collection and recycling • Refillable bottles (with deposit) • One-way (single use) beverage containers with deposit • One-way beverage containers in curbside collection systems (no deposit) • Different kind of beverage packaging • Glas bottles (refillable and one-way) • PET bottles (refillable and one-way) • Beverage cans • Beverage cartons

10. Evaluation model in the PwC study • 10 ecological impact categories with 16 indicators; e.g. • Resource and material use • Collection and recycling rates • 8 economic impact categories with 19 indicators; e.g. • System costs and revenues • Impacts on businesses and competition • 6 social impact categories with 9 indicators; e.g. • Employment • Implementation of producer responsibility

11. Main findings of the PwC study • Refillable systems are more sustainable than one-way systems • Deposit systems are more sustainable than curbside collection of beverage containers • Deposit systems for beverage containers enable higher collection rates and better recycling • Deposit system for one-way beverage containers is not necessarily more expensive than curbside collection • Deposit system for one-way beverage containers is more cost efficient than curbside collection • Deposit systems and curbside collection can coexist very well

12. PwC: Deposit achieve much higher collection and recycling rates than curbside collection • Collection rate for PET one-way bottles with deposit in Germany 100% Put on the market:100% Collected (including rests and adhesions):99% Net collected (without rests and adhesions):99% Recycling rate (put on the market):99% Open-Loop- Recycling (put on the market):NaN 50% Closed-Loop- Recycling:NaN Source: PwC, 2011

13. PwC: Deposit achieve much higher collection and recycling rates than curbside collection • Collection rate for PET one-way bottles in curbside collection system in Germany Collection rate about half compared to deposit system 100% Put on the market:100% Recycling rate less than a third compared to deposit system Collected (including rests and adhesions:64−80 % 50% Net collected (without rests and adhesions):43−54 % Energy recovery (put on market): 18−23 % Open-Loop-Recycling (put on market):25−31% Recycling rate (put on market): 25-31 % Source: PwC, 2011

14. PwC: Deposit systems enables not only more, but also better recycling • In the deposit system all collected materials are recycled (high quality = high value = 100% recycling) • “Clear” PET from deposit system: 600-700 AUD / tonne • “Colored” PET from deposit system: 370-450 AUD / tonne • The materials collected in the curbside collection are only partly recycled. The rest is either incinerated or landfilled. • Bottle-to-bottle recycling is only made with PET bottles from the deposit systems • The quality of the PET from the curbside collection is not good enough to enable bottle-to-bottle recycling (mixed materials, impurities, adhesions etc.)

15. PwC: Deposit systems are not more expensive than curbside collection • “In an economic comparison of German return systems for single-use beverage containers – the mandatory deposit system and the [curbside collection] system – it has been determined that it is not possible to make any general statement about which is the more cost-intensive system. While earlier analyses arrived at the finding that the deposit system gives rise to higher costs, current data indicates that, taking costs and revenues into account, developments are tending to favour mandatory deposit systems and that participation in a deposit system can be less costly than participation in a [curbside collection] system.”

16. PwC: Deposit systems and curbside collection can coexist very well 1(3) • “In Germany, the mandatory deposit system is proving to be a meaningful measure for supporting the political targets (promotion of ecologically beneficial beverage packaging, high return rates, high recycling rates, less littering), and in practice is thus a meaningful supplement to the [curbsidecollection] system for the beverage packaging segment.”

17. PwC: Deposit systems and curbside collection can coexist very well 2(3) • “In many countries, [curbsidecollection] systems (also for taking back and recovering beverage containers) have already been introduced to varying extents. If the recycling rate and, in particular, the bottle-to-bottle recycling rate is to be increased, it is recommended that a deposit system for beverage containers be additionally introduced.”

18. PwC: Deposit systems and curbside collection can coexist very well 3(3) • “Mandatory deposit systems and [curbside collection] systems for single-use beverage containers are aimed in part at different segments. [Curbside collection] systems are primarily targeted at household use. However, a significant proportion of beverage packaging, in particular, is used outside the home. [Curbside collection] systems usually cover this packaging only to a limited extent, whereas the deposit system also covers consumption outside the home due to the financial incentive provided. Consequently, the two systems supplement one another and can co-exist very well.”

19. Fairytales and real facts about deposit systems

20. Always the same story: Classic opponents to deposit fight dirty with made-up arguments • Large beverage producers (Coca Cola, Carlsberg & Co.) • A principally ideological fight • Packaging industry (can and PET bottle manufacturers) • Also a principally ideological fight, although single companies favor deposits as a way of securing secondary raw materials (e.g. US aluminum industry) • Operators of curbside collection systems • Financial interest to “keep” materials in the curbside collection • Retailers • Roused by beverage producers and packaging industry • Fear of additional costs and take back obligation in stores

21. Fairytale: “Deposit schemes reduce sales volumes” • Beverage producers argue that they will loose markets and sales volumes if a deposit is introduced • Beverage producers also use this argument to convince retailers to oppose deposit systems • The fairytale is often backed up by misleading sales data from the introduction of the German deposit

22. Fairytale: “Deposit schemes reduce sales volumes” • Beverage producers argue that they will loose markets and sales volumes if a deposit is introduced • Beverage producers also use this argument to convince retailers to oppose deposit systems • The fairytale is often backed up by misleading sales data from the introduction of the German deposit Lie detector: NOT TRUE Fact:Sales of different beverages vary over time – but not depending on a deposit

23. Beer sales in Germany before and after the introduction of deposit 2003 Sales volume in 1.000 liter Beer sales were going down before the deposit Introduction of deposit on beer Source: GVM/UBA 2005, 2007, 2008, 2009, 2010, 2011

24. Water sales in Germany before and after the introduction of deposit 2003 Single largest increase in sales (+9%) since 1994 in the year of the deposit introduction Sales volume in 1.000 liter Water sales were going up before the deposit Introduction of deposit on water Source: GVM/UBA 2005, 2007, 2008, 2009, 2010, 2011

25. Fairytale: “There is no guarantee that collection is increased with a deposit” • Opponents of deposit systems argue – particularly in countries with existing curbside collection – that it is going to be hard or impossible to increase the already achieved collection rates and that a deposit system would be is a wild card without guarantee.

26. Fairytale: “There is no guarantee that collection is increased with a deposit” • Opponents of deposit systems argue – particularly in countries with existing curbside collection – that it is going to be hard or impossible to increase the already achieved collection rates and that a deposit system would be is a wild card without guarantee. Lie detector: NOT TRUE Fact:Deposit systems always bring high collection rates – the higher the deposit the higher the collection rate. No other system can compete – neither in quantity, nor in quality.

27. Deposit fees and collection rates

28. Fairytale: “Deposit systems turns retail stores into waste bins” • Retailers are told and made believe by opponents of deposit systems, that their stores will be flooded with waste because of the deposit, that their stores will look messy and that their customers will go elsewhere.

29. Fairytale: “Deposit systems turn retail stores into waste bins” • Retailers are told and made believe by opponents of deposit systems, that their stores will be flooded with waste because of the deposit, that their stores will look messy and that their customers will go elsewhere. Lie detector: NOT TRUE Fact:Retailers can use the deposit to attract and bind customers.

30. Deposit systems offer possibilities to sell more and tie customers closer • Retailers often keep return-vending machines in the middle or in the back of the shop in order to lead the customer though the store (getting them to buy something on their way out). This would not be the case if the retailer experiences hygienic or littering problems. • 60-80% of the consumers return their bottles and cans where they bought them. This way of binding customers is good for business and another reason why retailers in Germany start to like the deposit system.

31. Thank you very much for your attention!resch@duh.de