Janil Puthucheary on transition support for Beverage Container Return Scheme

Beverage Container Return Scheme (BCRS) - Parliamentary Q&A Summary

Key Concepts:

• BCRS (Beverage Container Return Scheme): A deposit-refund system designed to increase beverage container recycling rates and reduce contamination.
• EPR (Extended Producer Responsibility): A policy approach where producers are given responsibility for the end-of-life management of their products.
• RVM (Reverse Vending Machine): Automated machines that accept empty beverage containers and provide a refund.
• RPNO (Return Point Network Operator): Entities responsible for operating the RVM network and managing logistics.
• Transition Grant: Financial assistance provided to smaller producers to help with the initial costs of complying with the BCRS.

1. Scheme Overview & Rationale

The Beverage Container Return Scheme (BCRS) will commence on April 1st, 2024, following debates in 2021 during the Resource Sustainability Amendment Bill. The scheme, initially proposed by a citizen’s workgroup in 2019, aims to address the significant amount of packaging waste (one-third of Singapore’s domestic waste) and low overall recycling rates. It’s the second EPR scheme in Singapore, building on the existing e-waste recycling program. The core principle is a 10-cent deposit paid at the point of purchase, refunded upon return of the container, incentivizing consumer participation. The scheme’s design was informed by successful models in Norway, Denmark, and Lithuania, all of which feature industry-led, not-for-profit operation.

2. Scheme Operation & Industry Involvement

BCRS Limited, formed by industry stakeholders (Coca-Cola Singapore Beverages, FN Foods, PA Onein Industries, and Chakimi Food Industries) and licensed by the NEA, will operate the scheme. The board includes representatives from both large and small producers. BCRS Limited is responsible for reporting deposit collection and refund amounts annually for public accountability. The industry-led approach is justified by the belief that stakeholders are best positioned to determine efficient recovery methods and manage costs.

3. Financial Implications & Producer Costs

All regulated beverage containers will carry a 10-cent deposit, fully refundable to consumers. Producers will also pay a producer fee of 3-4 cents per container to BCRS Limited, covering collection and recycling logistics – comparable to fees in other jurisdictions. Approximately 80% of producers can incorporate the deposit mark and barcode directly onto their containers, keeping costs close to the producer fee. Smaller producers may incur higher costs using stickers, potentially around 3 cents per container at scale, but higher for smaller volumes applied locally. A $2,500 transition grant is available to smaller businesses (those putting less than 50,000 containers per year to market – approximately one quarter of producers) to cover registration and first-year producer fees. The NEA will remain flexible and supportive to producers facing challenges.

4. Consumer Pricing & Market Dynamics

Consumer pricing is considered a complex commercial decision. The scheme is designed for efficiency and low producer costs. Any cost increase passed to consumers is expected to be moderated by price competition among industry players, mirroring experiences in other jurisdictions where deposit return schemes haven’t significantly impacted beverage prices or sales. The NEA will closely monitor beverage prices post-implementation.

5. Return Point Network & Accessibility

At launch, over 1,000 RVMs will be deployed across Singapore, located in supermarkets, void decks, and hawker centers. 90% of HDB residents will be within a 5-minute walk of a return point. The network aims to double to 2,000 RVMs within the first year, with locations optimized based on return patterns and community feedback. Ambassadors will be deployed to assist the public, particularly seniors and vulnerable individuals. Containers with the deposit mark will gradually enter the market, with widespread availability expected by August/September.

6. Logistical Considerations & Operational Challenges

The RVMs are operated by return point network operators contracted to empty the machines at least daily (more frequently if needed) and maintain cleanliness. These operators are existing public waste collection entities, minimizing the need for new companies. BCRS Limited contracts require 90% RVM uptime for repairs and maintenance. A pilot program with 50 RVMs over four years (collecting 16 million containers) provided valuable lessons for the full-scale rollout.

7. Addressing Concerns & Future Adjustments

The government acknowledges potential challenges for smaller producers and parallel importers. Flexibility and support will be provided. The 10-cent deposit value will be reviewed over time, considering experiences in other jurisdictions. The NEA will monitor beverage prices and address any evidence of collusion or profiteering. While cash refunds are not initially planned, other digital refund methods will be introduced. The deposit mark will remain necessary even after the transition period, as not all beverage containers will be covered by the scheme. The scheme aims for a recycling rate of 70-80%, potentially exceeding 90% based on successful international models.

Notable Quotes:

• “By nudging consumers to make a small change in their lifestyle, we hope to increase recycling of beverage containers and spark a change in our recycling habits.” – SMS General
• “We want to create a scheme that works for all of us.” – SMS General
• “We will not get everything right from the start. We ask for feedback, suggestions, and understanding as we transit to this new way of recycling.” – SMS General

Data & Statistics:

• Packaging waste constitutes one-third of Singapore’s domestic waste.
• Overall recycling rate in Singapore is currently low (specific figure not provided).
• Deposit: 10 cents per beverage container.
• Producer fee: 3-4 cents per container.
• Transition grant: $2,500 for smaller producers.
• 90% of HDB residents will be within a 5-minute walk of an RVM.
• Pilot program collected 16 million containers over four years with 50 RVMs.
• Best-performing schemes internationally achieve recycling rates exceeding 90%.
• Target recycling rate: 70-80% initially.
• Small producers defined as those putting less than 50,000 containers per year to market (representing approximately 25% of producers).

Conclusion:

The BCRS represents a significant step towards enhancing Singapore’s recycling infrastructure and promoting a circular economy. The scheme’s success hinges on industry collaboration, consumer participation, and ongoing monitoring and adjustments. The government has demonstrated a willingness to be flexible and supportive, particularly towards smaller producers, while emphasizing the importance of market dynamics in moderating any potential price increases. Continuous data analysis and community feedback will be crucial for optimizing the scheme and achieving its ambitious recycling targets.