California's Container Deposit System Crisis

For comprehensive analyses of California’s system, scroll down for reports, letters and other documentation

 

Overview

At a time when we must take every step possible to address our climate and plastic pollution crises, California’s beverage container deposit program (aka bottle bill) is suffering from extensive shortcomings – namely a staggering loss of redemption centers over the last decade and a lack of transparency about the amount of state funding available to help increase deposit return opportunities for consumers.

From 2013 to 2022, more than 1,300 (50%) of the state’s redemption centers closed – including nearly 300 in August 2019 by rePlanet, then the largest operator of such centers in California. This steep decline has created dire consequences:

    dramatically less recovered income for consumers – on the order of $600 million annually – because they no longer can find sites for returning empty bottles and cans in exchange for the deposit refunds; 

    fewer recycling industry jobs (750 lost with the rePlanet center closures alone); 

    a drop in the state’s beverage container redemption rate* by 15.5 percentage points (74% to 58.5%); and 

    ensuing harm to the sustainable economy and the environment, because fewer recycled beverage containers means more end up in landfills, and more must be produced from virgin (versus recycled) materials. 

The redemption center closures have stemmed primarily from an outdated state subsidy formula that results in severe underpayments to the centers to supplement the scrap values of recycled materials. Of the dozens of container deposit programs worldwide, only California’s employs a structure that imparts such high levels of financial risks, plus uncertain and inadequate payments, to redemption centers. Combined with several years of historically low scrap prices that reduced centers’ revenues, and minimum wage increases for employees, too many sites could no longer cover their operating costs and ensure enough profit to remain solvent. 

With deposit return options plummeting, especially in “recycling deserts” that were left with virtually no redemption centers, the coffers of CalRecycle swelled. This state agency, which administers and provides oversight for recycling programs, keeps unclaimed deposit monies.

Diligent work by CRI helped bring to light that CalRecycle had been mis-reporting its Beverage Container Recycling Program (BCRP) fund balance in various reports, with an underreported differential of nearly $180 million for the 2019-20 FY – leaving legislators and consumers without the full picture about the program’s structural and operational failures.  

For the 2020-21 FY, CalRecycle’s report to the State Controller’s Office – likely its most accurate data – indicated a main BCRP fund balance of $563.3 million. Although some increase in the balance from 2020 to 2022 can be attributed to a significant rise in packaged beverage sales and a decrease in container redemptions during the COVID-19 pandemic, the fund had been growing annually since 2015-16. 

It will take a significant overhaul to revive California’s system. The state’s elected officials and regulatory bodies must, at a minimum, ensure predictable and sufficient funding for redemption centers and permanently raise the deposit on all containers from 5 cents to 10 cents to incentivize more returns. One positive step did occur in 2022 with the State Senate’s passage of a bill to add a deposit to wine and distilled spirits (liquor). (The State Assembly still must vote on it.) A CRI analysis indicates that, if implemented, this legislation would result in the recycling of more than half a billion additional bottles and cans annually. 

After the revelation about the underreported BCRP fund balance, CalRecycle announced a proposal to use $330 million in surplus funds to increase deposit return options and provide “bonus” recycling credits. While it represents an important step for the agency to recognize the system’s deficiencies, this proposal – unanimously rejected by the State Senate Budget and Fiscal Review Committee – will not create long-term change until CalRecycle takes additional actions, including:

    Preparing a clear statement of goals and objectives for the beverage container deposit program;

    Developing a detailed, targeted implementation plan to prioritize expenditures, particularly in rural and underserved communities; 

    Establishing a measurement mechanism to assess results of its program enhancements, with publicly reported outcomes; and

    Increasing enforcement of the “return-to-retail” commitment of retailers (including supermarkets) not currently adhering to their pledge to accept back empty containers and provide deposit refunds to consumers. 

The documents on this page contain additional information on California’s beverage container deposit program, including CRI’s analyses of legislative developments and recommendations for ensuring that the nation’s most populous state operates an efficient, effective system key to a more circular economy.  

* The redemption rate covers beverage containers returned to redemption centers or retail sites, but not containers recycled through curbside and drop-off programs. Deposit returns account for approximately 88% of the number of containers recycled in California.    

Important note: For consumers whose nearest redemption center has closed, see the document titled “The California Crisis – Bottle Recycling in California: How to Get Your Deposits Back” (August 2019) for options on how to redeem your empty beverage containers for cash.

 

© Container Recycling Institute, 2022


© Container Recycling Institute, 2022

 

 

 

 Additional Documents:

 

2022

CRI Letter to California Office of Administrative Law on CalRecycle Processing Payment Emergency Regulations (October 26th, 2022)

CA SB 1013 Summary (September 5th, 2022)

CA AB 179 Budget Act of 2022 Deposit Program Funding Breakdown (September 5th, 2022)

CRI neither opposes or supports SB 1013 (August 26, 2022)

Amendments to Senate Bill No. 1013 (August 23, 2022)

The California Beverage Container Recycling and Litter Reduction Act - Flow of Payments under the Beverage Container Recycling Program (August 2022)

Letter from CRI to Assembly Committee on Appropriations to Support for SB 1013 (July 25, 2022) UPDATED

Pilot Error: How CalRecycle's New CRV Refund Pilots are Crashing and Burning (Consumer Watchdog, June 2022)

Letter from CRI to California Assembly Committee on Natural Resources: Support for SB 38 (June 21, 2022)

Container Recycling Institute Comments on CalRecycle’s Budget Change Proposal (BCP) for the Beverage Container Recycling Program (BCRP) (May 2nd, 2022)

Letter to California Assemblymember Jacqui Irwin: CRI Supports California AB 2779 (to place a CRV on wine and distilled spirits sold in aluminum cans) (April 25th, 2022)

Proposed Bonus Credits Would Double Recycling Refunds to Get Surplus Bottle and Can Deposits Back to Californians (CalRecycle, April 1st, 2022)

Flaw in California's AB 793's De Minimis Provision Threatens Operability of Entire Recycled Content Law (CRI, March 31st, 2022)

CalRecycle Budget Change Proposal (March 30th, 2022)

California's Bottle Bill: The Path to Redemption (The Story of Stuff Project, March 3rd, 2022)

'The System Is So Broken': State Senator Grills California Officials Over Bottle Deposit Program (San Francisco Chronicle, March 3rd, 2022)

Letter from CalRecycle to California Senate Budget Subcommittee on CalRecycle's Oversight of the Beverage Container Recycling Fund (March 2nd, 2022)

More Bottle and Can Redemptions Coming to California Communities Without Recycling Centers in New CVS Agreement with CalRecycle (CalRecycle, March 1st, 2022)

Letter from California Senate Budget Subcommittee to CalRecycle on CalRecycle's Oversight of the Beverage Container Recycling Fund (February 22nd, 2022)

California Bottle Deposit Program Sitting on at Least $100 Million More than It Told Lawmakers (San Francisco Chronicle, January 30th, 2022)


2021

CRI Supports CalRecycle's Proposal to Extend the Processing Payment Emergency Regulations (December 16th, 2021)

Update on the Status of California's Beverage Container Recycling Program: Overall $648 Million Balance in Funds Amidst Staggering Losses of Redemption Opportunities for Consumers (December 15th, 2021)

Update on the Status of California’s Beverage Container Recycling Program: Overall $534 Million Balance in Funds Amidst Staggering Losses of Redemption Opportunities for Consumers  (July 28th, 2021)

CRI Opposes AB 1454, Changes to The California Beverage Container Recycling and Litter Reduction Act (June 25th, 2021)

CRI Supports California's AB 962 (June 21st, 2021)

Background on California’s Convenience Zone Structure and Current Status  (May 5th, 2021)

2020

CRI Letter on California SB372  (January 14th, 2020)

2019

CRI supports RFR - Processing Payment Emergency Regulations  (December 10th, 2019)

The California Crisis – Bottle Recycling in California: How to Get Your Deposits Back (August 2019)

CRI Response to Closure of Nearly 300 Bottle Redemption Centers in CA (August 2019)

California’s CRV Beverage Container Recycling Program: Quantifying Payments to Curbside and Drop-off Programs (2017) - Updated August 2019

Summary of Findings: The operators of curbside and drop-off programs in California received $193 million in revenue from CalRecycle payments and scrap sales for CRV beverage containers in 2017. The estimated cost for handling those containers was $43 million, leading to a calculation of $150 million in gross profits, or a 349% profit. Download PDF [PDF, 449KB]

Reasonable Financial Return for recycling centers - August 23, 2019

In December 2018, CRI submitted a letter to CalRecycle in favor of emergency regulations changing the RFR used to calculate 2019 processing payments (attached). We wrote that the proposed RFRs of 11% and 16% for rural sites were “nowhere near enough to avert the impending financial crisis for redemption centers.”
Download PDF [485KB]

CRI supports AB 792 - April 23rd, 2019

We are writing in support of AB 792, which would require plastic beverage bottle manufacturers to make their bottles out of 100% recycled content by 2035, with intermediate goals to be reached incrementally.

Download PDF [485KB]

Background on California’s Convenience Zone Structure and Current Status - April 2019

A “convenience zone” is defined as the area within a half-mile radius of a supermarket that has gross annual sales of at least $2 million. By statute, the intent is to have one redemption center in each convenience zone. This would ensure that it is just as easy to return an empty beverage container for refund as it is to purchase the beverage in the first place. Download PDF [PDF, 373KB]

CRI Supports AB 815 - March 28th, 2019

We are writing in support of dual-stream recycling, in relation to AB 815, “Integrated waste management plans: source reduction and recycling element: dual stream recycling programs.”
Download PDF [705KB]

2018

CalRecycle 2019 Processing Payments (December 2018)

CalRecycle 2019 Processing Fees (December 2018)

CRI letter to CalRecycle in support of extending emergency regulations to boost payments to redemption centers, 12-10-18

The Container Recycling Institute supports the adoption of emergency regulations changing the reasonable financial return (RFR) applied to the calculation of processing payments for the period of January 1, 2019 to December 31, 2019.
Download PDF [PDF, 1MB]

CalRecycle Handling Fee Changes Effective July 1st, 2018 (June 2018)

2017

CRI Response to Emergency Increase in Processing Payment - October 13th, 2017

The Container Recycling Institute supports the proposed changes to the Reasonable Financial Return (RFR) described during the Workshop on Processing Payment Emergency Rulemaking. Based on our analyses that I will detail below, we believe this a good solution to the current problem.
Download PDF [PDF, 236KB]

California’s Beverage Container Redemption Center Crisis:  THE BIGGEST LOSERS (July, 2017)

California needs to help restore redemption center coverage in the “recycling deserts” in the state. Here’s why. (July 2017)
Download PDF [PDF, 29KB]

CRI Supports Most Budget Committee Recommendations for CalRecycle (California) - June 1, 2017

The Container Recycling Institute (CRI) supports the Assembly budget committee recommendations for CalRecycle’s Beverage Container and Litter Reduction Act program. CRI supports the budget committee proposal for funding for “enhanced oversight, audit and enforcement in the beverage container recycling program.”
Download PDF [PDF, 158KB]

2016

California Beverage Container Redemption Centers Lose $20 Million in 2015 Due to State Payment Shortfalls (April, 2016)

Integrity of California’s Beverage Container Deposit System  Threatened by Processing Payment Shortfalls - Report (Updated: April 2016)

Declining scrap prices coupled with problematic compensation formulas have produced processing payment shortfalls that have already forced the closure of more than 400 redemption centers in California, posing a serious threat to the state’s beverage container recycling infrastructure and sharply constricting consumers’ ability to recover the CRV (container refund value) to which they are entitled.
Download PDF [PDF, 602KB]

Processing Payment Shortfall FactSheet (Updated: April 2016)

Though it would require a statutory change, CRI recommends that the processing payment calculation method be reevaluated to protect the solvency of the recycling centers upon which the California beverage container recycling infrastructure depends.
Download PDF [PDF, 310KB]

Immediate Adjustment of Processing Payments is Needed to Avoid Further Closures of Recycling Centers in California (March, 2016)

2015

CRI Analysis of New CalRecycle Data Shows Beverage Container Recycling and Sales Increases (December 2015)

Overall beverage container recycling continues to hold steady at more than 80% in California (December, 2015)

2014

CA State Auditor Reviews CalRecycle (November 2014)

During our review of CalRecycle’s administration of the beverage program, we noted the following: The beverage program’s long term financial health is at risk the program’s costs exceeded revenues by $100 million in three of the last four fiscal years and by nearly $29 million in the past fiscal year.
Download PDF   [PDF, 131KB]

Examining the Potential for Increased Revenues in California’s Beverage Container Deposit-­‐Return Program (August 13, 2014)

CRI’s analysis suggests that there may be nearly 3.7 billion units (3,690,008,614 units) for which no deposit has been paid. These “free-­‐riders” in the system are worth more than $206 million in potentially uncollected CRV.Get Download Link

CRI's letter concerning CalRecycle’s Quarterly Report on the Status of the Beverage Container Recycling Fund (July 24th, 2014)

The Container Recycling Institute has comments and questions for the Department to help clarify understanding of the Fund’s finances.
Download PDF [PDF, 138KB]

CRI Summary of CalRecycle’s Budget Change Proposal “Increase Beverage Container Recycling Revenue through Increased Audit Coverage” First of three proposals, First Quarter 2014

CRI Summary of CalRecycle’s Budget Change Proposal “Beverage Container Recycling Program Reform Phase II: Sustainably Reducing the Structural Operating Deficit” Second of three proposals, First Quarter 2014

CRI Summary of CalRecycle’s Budget Change Proposal “Initial Transition for Support of DORIIS from Contractor to State Staffing”  Third of three proposals, First Quarter 2014

2013

CRI letter to CalRecycle regarding MRF performance standards

CRI's 8/1/13 letter on the method used for the evaluation of recyclables and residuals at Mixed Waste Processing Facilities (MWPF) seeking certification as well as source-separated facilities.
Download PDF [PDF, 532KB]

 

 

 

 

 

 

 

 

 

donate_red_allcaps_black






 

Scroll To Top