Dive Brief:
- A California bill, which recently received a unanimous vote from the state assembly, would increase subsidies to redemption centers until April 1, 2017. If legislators can't work out a new deal to overhaul the state's deposit system by then, the subsidies would end.
- About half of the state's redeemed containers go through standalone centers and the rest go through supermarkets. According to CalRecycle, 363 redemption centers have closed this year.
- By statute, the state currently uses a formula based on 12-month average prices with a three-month lag time. Under the proposed bill, that formula would instead be based on the most recent available three-month period to better reflect shifting commodity prices.
Dive Insight:
The California Grocers Association has endorsed the bill along with advocacy group Californians Against Waste. The Container Recycling Institute estimates that the outdated payment formula has resulted in more than a $50 million shortfall since 2012. PET collectors have been hit especially hard, losing an estimated $63 per ton.
Another potential consequence of these closures is that manufacturers may not have access to enough recycled content. Nearly 90% of the state's deposit containers come through redemption centers and are responsible for roughly 1 million tons of glass, aluminum, and plastic each year. State law requires that glass bottles contain at least 35% recycled content further adding to the challenge.
Coupled with recent crackdowns on multiple out-of-state redemption schemes, the state is working hard to turn the system around. While some are concerned that the 2017 deadline could leave redemption centers even worse off than before if a new deal can't be reached, advocates of the bill say immediate action is needed to slow the rapid closure of facilities.
