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Bottle Recycling Operations

Eimantas M.


Deposit Lifecycle

Government

Producers

Retailers

+ Deposit

Customers Customers

- Deposit

Operators


Summary (1)

Participants: Government, Producers, Operators, Retailers, (Packaging Manufacturers?)

Roles: ● Government: to provide (or facilitate) the Technology Solution (IT System + website), control the process ● Producers: ensure the Collection and Recycling of Materials, accurately report Sales figures ● Operators: provide Collection and potentially Recycling services, i.e. organize Service Sales and Maintenance, report on Collections, pay out the Deposit (depending on agreements), organize Logistics, Materials Processing and/or Trading ● Retailers: ensure the Collection of Packaging, report their Purchases and Sales

Single website in Baltics with member logins to allow for reporting (sales, collections), planning, monitoring, and materials trading


Summary (2)

Producers free to choose local Operators rather than have only a single one, and then free to sell their collected Materials to Recyclers (e.g. those that produce new bottles)

Given enough competition, Operators can be for-profit as this reduces the borrowing interest rate and increases incentives to provide a better service

Operators compete to provide the best RVM solution, e.g. no-cost (i.e. Operators collecting the Collection Fee) or renting

Operators/Producers free to offer their own Collection Fee (with a minimum instituted by law) and adjusting it over the time (given two equally profitable products, Retailers will prefer those that pay them higher collection fees)

Producers (together with their Retailers) free to move (switch) to an alternative Operator should they become unsatisfied with the service


Summary (3)

IT System to allow to connect to it different vendor RVMs, and vica versa, RVMs be connected to any IT System (this would provide a basis for increased competition, potentially even manufacturing RVMs locally in Baltics)

Like in Norway (Norsk Resirk), Governments can apply an Environmental Fee to Producers which reduces with a higher collection rates

Supermarkets and groups of smaller Retailers (e.g. in the rural areas) free to build Collection Centers (e.g. in car parks) to improve collection rates and free up shop space (depending on the distance from a shop, the law could grant an exemption to collect the packaging inside the shop)

IT System to automatically cross-check against Producer financial reports, Retailer sales reports (on the website), etc.

Closely similar or single Deposit Pricing across Baltics to help avoid arbitrage


Summary (4)

Retailers free to pay the Deposit directly to the Operator

Operators free to store the Deposit in a safe, Interest paying account and then pay back the Deposit plus the Retailer’s share of Interest

Producer, Retailer and Operator could be the same entity (?)

Glass wine bottles, juice and milk cartons/bottles should also be included into the deposit system because they are recyclable

IT system and RVMs should be certified and audited

RVMs could feed the Collections data into the IT System automatically via the Internet or readings could be made upon collections (e.g. by plugging in an authorized USB and entering a PIN)


Appendix


Deposit Lifecycle

â—?

Issue: Producers increase Working Capital in expense of Retailers, Customers, and Operators

+ Deposit

Retailers

Producers - Deposit

Government

Customers

Operators


Deposit Lifecycle

â—?

Potential Fix: Operator stores the Deposit with a Bank or Government and shares the Interest received equally among the Retailer, Operator, and Producer i.e. they receive slightly more than they paid

Retailers

Producers Government + Deposit

Customers

- Deposit

Operators + Interest

Bank or Government


Interest Sharing

For Example: ● Producer delivers EUR 100,000 of the product to the Retailer ● Retailer pays EUR 10,000 to Operator as Deposit ● Operator puts the EUR 10,000 in a Bank account ● Over the time, Operator eventually pays out EUR 10,000 to Customers ● Operator cashes out EUR 10,500 from the Bank (Interest included) ● Operator pays out EUR 10,250 to the Retailer and keeps EUR 250

Customers not receiving Interest are encouraged to return the packaging shortly after consumption

Operator should be prevented by law to save in high risk interest rate accounts. However this risk is small because operator risks its own money

In a more efficient model, the Deposit could be paid in smaller amounts directly to the Operator shortly after the sale


Operations