Starting from 2025, a deposit return system will come into force in Poland based on the Act of 13 July 2023 amending the Act on packaging and packaging waste management and certain other acts (Journal of Laws of 2023, item 1852). Under this system, a deposit will be charged when selling beverages in selected packaging, which will then be returned to the end user on the condition that they return the packaging. The deposit return system will concern: single-use plastic bottles for beverages with a capacity of up to three liters, metal cans with a capacity of up to one liter, and reusable glass bottles with a capacity of up to one and a half liters. Its implementation in Poland is to be a way to implement Article 9 of Directive of the European Parliament and of the Council (EU) 2019/904 of 5 June 2019 on reducing the impact of certain plastic products on the environment. The provision mentioned above obligates the Member States of the European Union to ensure the separate collection, for recycling purposes, of single-use plastic beverage bottles with a capacity of up to 3 liters at a level of 77% by 2025 and 90% by 2029 of such packaging placed on the market in a given year.
Fundamental questions about the impact of the deposit return system
The analysis conducted in this article focuses on PET bottles and aluminum cans. These packages constitute the most important raw material fractions, from the point of view of the deposit return system, contained in municipal waste currently delivered to sorting plants. PET bottles and aluminum cans are also the most valuable of all raw materials and the easiest to separate in installations, even manual ones. Data is also available for them, enabling calculations to be carried out.
However, the aspect under which this analysis is conducted is the consequences of introducing a deposit return system for municipal waste sorting plants. It is these plants that will first feel the direct economic effects of the introduction of the deposit return system. Currently, it is to them, in streams of selectively collected municipal waste and in mixed waste, that single-use beverage bottles (PET) and metal cans (mainly aluminum) go. According to the Act of 2023, under the deposit return system, the collection level of these packages is to be 77% in 2025. Then it is to grow by 3-4 percentage points each year to a level of 90% in 2029 and subsequent years. Streams of PET bottles and aluminum cans that will be directed to the deposit return system will no longer be found in the streams delivered to sorting plants intended for municipal waste. So what will be the impact of the deposit return system on the achievement of waste management goals? What economic effects will the facilities feel in connection with the loss of PET packaging and aluminum cans in the structure of waste delivered for sorting?
Impact of the deposit return system on achieving waste management goals
The primary goal of introducing a deposit return system is to increase the recycling rate of municipal waste through more effective selective collection of PET bottles and aluminum cans. What effect can we expect in this area?
Data from the Institute of Environmental Protection (IOŚ) shows that the annual mass of plastic bottles with a capacity of up to 3 liters placed on the market is approximately 325,000 Mg. Of this, PET bottles account for about 97%. Consequently, the mass of PET bottles placed on the market in 2022 was approximately 315,000 Mg. A piece of additional information – approx. 200,000 Mg of PET bottles are recycled. Therefore, the rate of recycling PET bottles is about 63.5% (200,000 Mg / 315,000 Mg = approximately 63.5%). To achieve a 90% recycling rate for PET bottles (the collection level required for the deposit return system in 2029), with the aforementioned mass of PET bottles placed on the market, it would be necessary to increase the recovery and level of recycling of PET bottles by approximately 84,000 Mg, that is, from approximately 200,000 Mg to approximately 284,000 Mg. However, this is a simplified and optimistic assumption, as the deposit return system is a selective waste collection system, and the required level of selective collection of packaging does not directly translate into the achievement of required recycling levels. Moreover, not all selectively collected PET bottles are fully suitable for recycling. For the sake of simplicity of calculations, for the purposes of this analysis, let us leave such assumptions, being aware that they will also lead to optimistic conclusions.
On the other hand, according to data from the Recal1. Foundation, the recycling rate of aluminum beverage cans in 2021 in Poland is 79%. In the report “Aluminum Recycling – Towards a Closed Loop”2., Recal states that all packaging where aluminum is the dominant material, weighing approximately 95,000 Mg, is introduced to the Polish market, and 2/3 of this mass is beverage cans. It follows that the annual mass of aluminum beverage cans introduced is approximately 63,000 Mg, and the annual mass of aluminum cans directed to recycling is approximately 50,000 Mg (63,000 Mg x 0.79 = approximately 50,000 Mg). Therefore, to achieve a 90% recycling rate for aluminum cans, it would be necessary to increase their recovery by approximately 7,000 Mg. Here, as in the case of PET bottles, it must also be added that this is an optimistic assumption, which we will leave for the sake of simplifying calculations. The level of selective waste collection does not translate directly into recycling levels.
Looking at the raw material fractions as a whole, which are primarily affected by the deposit return system, the share of PET bottles and aluminum cans (315,000 Mg + 63,000 Mg) in municipal waste can be estimated at 2.78%. If currently 200,000 Mg of PET bottles and 50,000 Mg of aluminum cans are recycled, then currently about 1.84% of the recycling level is obtained from these raw materials. It follows that the current recycling level for both of these fractions is about 66%.
The above calculations show that achieving the 90% level of selective collection of packaging and packaging waste, indicated in the Act for PET bottles and aluminum cans, would require an increase in their “recovery” by a total of approximately 91,000 Mg. In accordance with the previously adopted assumptions, we maintain that 90% of selectively collected PET bottles and aluminum cans will be entirely directed to recycling.
What does this information mean for achieving waste management goals? If, according to information from the IOŚ3., the level of preparation for reuse and recycling of municipal waste (calculated based on data submitted by regional governors) was 27% in 2022, and the amount of municipal waste generated in 2022 reached 13,590,000 Mg, then the volume of municipal waste directed for reuse and recycling was at a level of approximately 3,669,000 Mg. Increasing the amount of waste directed for recycling by the calculated 91,000 Mg would mean increasing the mass of municipal waste directed for reuse and recycling to approximately 3,760,000 Mg. Such a mass of municipal waste directed for recycling would mean an increase in the level of preparation for reuse and recycling of municipal waste in 2022 from 27% to 27.67% (3,760,000:13,590,000). This means that the target ecological effect of the deposit return system for 2029 and subsequent years, which assumes a 90% effectiveness of selective collection, assuming that 100% of selectively collected PET bottles and aluminum cans are directed to recycling, is an increase in the level of preparation for reuse and recycling of municipal waste by 0.67 percentage points.
However, this will be possible provided that the levels of selective collection indicated in the Act within the deposit return system are achieved and, let us repeat once again, when 100% of selectively collected PET bottles and aluminum cans are directed to recycling. Analyses on the impact of the deposit return system on achieving recycling levels were also conducted by Deloitte4.. They show that the mass of packaging waste collected in the deposit return system will increase recycling levels by 0.2-0.4 percentage points compared to the currently recovered stream of this fraction within municipal collection. Indicating the expected effects of introducing the deposit return system, we are therefore talking about a marginal, i.e., below 0.7 percentage points, impact on achieving the required level of preparation for reuse and recycling, which for 2025 is 55%, and for 2035 – 65%.
Costs of implementing the deposit return system
A valuable addition to the aforementioned Deloitte report is the estimation of costs associated with implementing a deposit return system in Poland. Deloitte’s financial analysis indicates that the total investment cost of launching a deposit return system in Poland, which is based on a mixed model of collecting packaging and packaging waste (i.e., including both manual collection and automated collection using verification and destruction machines), could amount to nearly 14.2 billion zloty (over the years 2025-2034). Almost 65%, (that is – 9.2 billion zloty) of these costs are related to the necessary construction work to adapt collection points. Meanwhile, over 22%, i.e., 3.1 billion zloty, is to be spent on purchasing reverse vending machines. In turn, the operational cost of the deposit return system is estimated at a total of 23.1 billion zloty over a 10-year period.
If the investment costs of launching the deposit return system have been correctly determined by Deloitte, then we can look at them from a different perspective. As the analysis conducted in the article “The technological level of Polish municipal waste sorting facilities in the context of preparing it for recycling” shows, the demand for advanced municipal waste sorting facilities in Poland can be estimated at about 120 medium-sized sorting plants. If we assume the total cost of building a medium-sized waste sorting facility, including halls, necessary construction infrastructure and equipment, at the level of 100 million zloty, then for the amount of 14.2 billion zloty of investment costs of launching the deposit return system, it would be possible to build about 140 such facilities. As a result, an infrastructure would be created for the recovery of several dozen material fractions, including those more difficult to manage and separate than the two most valuable fractions – PET and aluminum, which are currently covered by the deposit return system being implemented in Poland.
And one more observation, from the point of view of efficiency. If the investment costs of introducing the deposit return system estimated by Deloitte (14.2 billion zloty) are divided by the estimated and expected effect of this system in the form of an increase in the level of preparation for reuse and recycling (assuming the maximum estimated effect at the level of 0.67 percentage points), then we obtain a value of 21.2 billion zloty as a unit cost necessary to increase the level of preparation for reuse and recycling by 1 percentage point, i.e., e.g. from 27% to 28% (for the simplest to recycle and most valuable PET bottles and aluminum cans). Taking the path of accepting such a level of investment costs to increase the level of preparation for reuse and recycling for other, more difficult to manage municipal waste fractions, for each subsequent percentage point (21.2 billion zloty per one percentage point) from the level of 27% in 2022 up to the required 65% in 2035, it would mean a cost of achieving this level of over 805 billion zloty.
Impact of the deposit return system on municipal waste sorting facilities
The costs of implementing a deposit return system do not only include investment costs associated with launching this system. In economics, so-called external costs are also distinguished, shifted to the environment, which will constitute tangible effects of the implementation of the deposit return system. These costs include, for example, environmental costs or costs that will be borne by other economic entities. In terms of economics, the implementation of the deposit return system will directly and most strongly affect the operation and economic results of municipal waste sorting facilities. The impact on individual facilities, depending on the individual situation of each of them, will subsequently translate into municipal waste management systems, and ultimately – on residents.
This article focuses on municipal waste sorting facilities. It is in them that real technological processes of waste processing take place that determine recycling levels. Therefore, installations are a key element of the waste management system. The environmental and economic effects achieved, as well as economic effects, depend on the installation and the technology used in it. How will the deposit return system affect these effects and the economic condition of installations?
At the beginning, it is necessary to establish the parameters of the analysis on which it will be based. The first is the mass of PET bottles introduced into circulation each year (approximately 315,000 Mg) and the mass of PET bottles directed to recycling (approximately 200,000 Mg). Then, it is necessary to assume the selling price of 1 ton of PET bottles at the average level for 2024, amounting to 1500 zloty, and recycling certificates (DPRs) at the level of 600 zloty. The efficiency of separating PET bottles on a well-designed, technologically advanced sorting line can reach a level of 80-95%. However, for calculations, let us assume the efficiency of separating PETs in a sorting facility at the level of 80%. Thus, the potential annual value of PET bottles sorted from municipal waste streams according to the selling prices of these bottles and DPRs is: 315,000 x 0.8 x (1500+600) = approximately 529 million zloty. The current annual value of PET bottles separated in waste sorting facilities and directed to recycling according to the selling prices of bottles and DPRs is: 200,000 x (1500+600) = approximately 420 million zloty.
Let us further assume that as a result of the introduction of the deposit return system, 80% of PET bottles will be excluded from the waste streams directed to installations, which will result from the share of PET bottles covered by the deposit return system and the return level within the deposit return system. In such a case, the real loss of income of waste sorting facilities related to the sale of PETs and the corresponding DPRs, under the above assumptions, will be at the level of approximately 336 million zloty per year. In the case of an increase in the intensity of PET sorting, e.g. as a result of an increase in the technological level of municipal waste sorting facilities from the current level of 63% to 80%, the potential loss of income for installations would be at the level of approximately 423 million zloty per year.
In the case of aluminum cans – their annual mass directed to recycling is 50,000 Mg. Let us assume that approximately 60% of the cans directed to recycling come from sorting facilities, and the remaining part, for example, from collection points. Then let us assume the selling price of 1 ton of aluminum cans at the average level for 2024, amounting to 5000 zloty, and DPRs at the level of 300 zloty. Let us also assume that as a result of the introduction of the deposit return system, 80% of aluminum cans will be excluded from the waste streams directed to installations. In such a case, the real loss of income of waste sorting facilities related to the sale of aluminum cans and the corresponding DPRs, under the above assumptions, will be at the level of approximately 127 million zloty per year.
If we additionally take into account the fact that the stream of municipal waste delivered for sorting will be reduced by approximately 282,000 Mg/year (by this amount, according to the adopted data, the mass of waste received for sorting will decrease as a result of the introduction of the deposit return system and the loss of 80% of PET bottles and aluminum cans), which we multiply by the average price of accepting waste to the installation at the level of 400 zloty/Mg, then the loss of revenue of waste sorting facilities from the title of accepting waste will be approximately 113 million zloty.
Therefore, the total estimated real loss of revenue of all waste sorting facilities in Poland related to the sale of PET bottles and aluminum cans, the corresponding DPRs, and the loss of revenue from the fee for accepting waste for processing due to the reduction of waste streams delivered to the installation, under the above assumptions, will be at the level: 336 million zloty + 127 million zloty + 113 million zloty = approximately 576 million zloty per year. Over a 10-year perspective, this is a value of loss at the level of approximately 5.76 billion zloty.
Advanced technological waste sorting facilities, contrary to popular opinion, are not focused only on “separating mainly beverage packaging made of PET and metal scrap, including aluminum beverage cans”. By definition, they are intended to serve, which they do, to separate a wide spectrum of several dozen different raw material fractions. The deterioration of the economic conditions of operation of installations, in the form of lower revenues from the sale of raw materials, will hinder the achievement of their goals. It will reduce the motivation to improve the efficiency of operation and will also mean higher operating costs, which will be transferred to municipalities and residents. This is also a real loss of financial resources for investments, which will hinder the development and raising the technological level of installations, and consequently also the implementation of national waste management goals.
Case Studies – the impact of the deposit return system on individual facilities
For the purposes of this article, an analysis was conducted based on a prepared computational model, aimed at estimating the effects of introducing a deposit return system for several municipal waste sorting facilities operating in Poland. The calculations were based on the balance of waste streams delivered for sorting and the products obtained in 2023, as well as the average market prices obtained in 2024 by individual facilities. Thanks to this, the results can be presented in current prices and according to the average values in 2024. However, in order to obtain more comparable results, in some cases, certain streams of selectively collected waste, such as glass, which were delivered to the facility, were excluded from the analysis. Therefore, based on the information provided on the structure of waste delivered to individual facilities, it is not possible to infer the level of selective collection in municipalities. The results presented below refer only to the analyzed examples and cannot be applied to other facilities. The impact of introducing a deposit return system depends on the individual situation of each facility, the specifics of the carried out activity, the structure and size of the waste streams delivered for sorting, their morphology, the level of technological advancement of the sorting line, the structure of the products obtained, the way of operation by the user, the prices obtained by the given facility for the sale of raw materials, and other market and local factors. Let’s take a closer look at some examples.
Case Study 1: a large urban facility with advanced sorting technology
This facility receives mixed municipal waste (88%) and selectively collected plastics (12%) in a total quantity of approximately 160,000 Mg per year. The sorted PET bottles and aluminum cans together account for 2.14% of the waste delivered for sorting. Their economic value, taking into account the market price of the raw material fraction, DPRs (recycling certificates), and the gate fee, is approximately 8.1 million zloty per year.
The analysis considered a loss of 80% of PET bottles and aluminum cans due to the introduction of the deposit return system. As a result, the recovery level of raw material fractions directed for recycling will be reduced by approximately 1.6 percentage points. In turn, the annual economic loss due to the loss of 80% of PET bottles and aluminum cans after the introduction of the deposit return system is estimated at approximately 6.5 million zloty, and over a 10-year perspective, approximately 65 million zloty. This is a value that includes the loss of revenue from the sale of PET bottles and aluminum cans, the corresponding DPRs, and the loss of revenue from the fee for accepting waste for processing (the “gate fee”). Due to the loss of 80% of PET bottles and aluminum cans, revenues from the sale of raw material fractions will decrease by approximately 45%. Additionally, assuming that the costs of operating the facility will not change, and as a result of the introduction of the deposit return system, the amount of waste accepted for processing will decrease, the unit processing costs per 1 Mg will increase by approximately 1.7%.
The calculations carried out, which made it possible to estimate the losses from the decrease in revenue from the sale of PET bottles and aluminum cans, the corresponding DPRs, the lost fee for accepting waste for processing, and the increase in unit processing costs of waste, enabled us to calculate the increase in the fee for processing municipal waste per 1 Mg, which would be necessary to offset the losses of the facility. In the analyzed case, the fee for accepting waste for processing would have to increase on average by approximately 49 zloty per ton of waste included in the analysis delivered for processing at this facility.
Case Study 2: a large urban facility with advanced sorting technology
This facility receives approximately 55,000 Mg of waste per year, with a dominant share of selectively collected waste (about 55%).
The share of sorted PET bottles and aluminum cans in the waste delivered for sorting reaches approximately 4.9%.
The economic value of sorted PET bottles and aluminum cans, taking into account the market price of the raw material fraction, DPRs, and the gate fee, is approximately 7.4 million zloty.
The recovery level of raw material fractions directed for recycling, due to the loss of 80% of PET bottles and aluminum cans as a result of the introduction of the deposit return system, will be reduced by approximately 2.4 percentage points.
The annual economic loss estimated at approximately 5.8 million zloty includes the loss of revenue from the lower sale of PET bottles and aluminum cans, a decrease in the sale of DPRs, and the loss of revenue from the “gate fee”. Over a 10-year perspective, this is a loss reaching approximately 58 million zloty.
The decrease in revenue from the sale of raw material fractions is approximately 36%. The increase in unit processing costs of waste due to a decrease in the amount of waste delivered for processing is approximately 4.1%.
The estimated increase in the fee for processing municipal waste per 1 Mg, necessary to compensate for the losses from the decrease in revenue from the sale of PET bottles and aluminum cans, the decrease in revenue from the sale of DPRs, the lost fee for accepting waste for processing, and the increase in unit processing costs of waste as a result of the introduction of the deposit return system and the loss of 80% of PET bottles and aluminum cans in the waste streams accepted for sorting, will reach approximately 120 zloty/Mg.
Case Study 3: a medium-sized facility with advanced sorting technology
This facility processes approximately 44,000 tons of waste annually, including mixed waste (about 89%) and selectively collected waste (about 11%).
The proportion of sorted PET bottles and aluminum cans in the waste delivered for sorting is approximately 1.6%.
The economic value of sorted PET bottles and aluminum cans, considering the market price of the raw material fraction, the price of DPRs (recycling certificates), and the “gate fee”, is approximately 2.25 million zloty.
The recovery level of raw material fractions directed for recycling, due to the loss of 80% of PET bottles and aluminum cans as a result of the introduction of the deposit return system, will be reduced by approximately 1.1 percentage points.
The estimated annual economic loss, amounting to approximately 1.8 million zloty, includes the loss of revenue from the sale of PET bottles and aluminum cans, the sale of DPRs, and the loss of revenue from the fee for accepting waste for processing. Over a 10-year perspective, it is estimated at approximately 18 million zloty.
The decrease in revenue from the sale of raw material fractions is estimated at approximately 36%.
The increase in unit processing costs of waste due to a decrease in the amount of waste delivered for processing is approximately 1.3%.
The estimated increase in the fee for processing municipal waste, per 1 Mg, necessary to compensate for the losses from the decrease in revenue from the sale of PET bottles and aluminum cans, the decrease in revenue from the sale of DPRs, the lost fee for accepting waste for processing, and the increase in unit processing costs of waste as a result of the introduction of the deposit return system and the loss of 80% of PET bottles and aluminum cans in the waste streams accepted for sorting is approximately 48 zloty/Mg.
Case Study 4: a medium-sized facility with semi-automated sorting technology
This facility processes approximately 84,000 Mg/year, primarily mixed waste (about 90%) and selectively collected waste (about 10%).
The share of sorted PET bottles and aluminum cans in the waste delivered for sorting is less than 0.5%.
The economic value of the sorted PET bottles and aluminum cans, considering the market price of the raw material fraction, DPRs (recycling certificates), and the gate fee, is approximately 1.25 million zloty.
The recovery level of raw material fractions directed for recycling will be reduced by approximately 0.3 percentage points due to the loss of 80% of PET bottles and aluminum cans following the introduction of the deposit return system.
The estimated annual economic loss from this is approximately 1 million zloty, which includes the loss of revenue from the sale of PET bottles and aluminum cans, the sale of DPRs, and the loss of revenue from the fee for accepting waste for processing (the “gate fee”). Over a 10-year perspective, this loss will amount to approximately 10 million zloty.
The decrease in revenue from the sale of raw material fractions is estimated at approximately 20%.
The increase in unit processing costs of waste due to a decrease in the amount of waste delivered for processing will be approximately 0.4%.
The estimated increase in the fee for processing municipal waste, per 1 Mg, necessary to compensate for the losses from the decrease in revenue from the sale of PET bottles and aluminum cans, the decrease in revenue from the sale of DPRs, the lost fee for accepting waste for processing, and the increase in unit processing costs of waste as a result of the introduction of the deposit return system and the loss of 80% of PET bottles and aluminum cans in the waste streams accepted for sorting is approximately 14 zloty/Mg.
Case Study 5: a small municipal facility with moderately advanced sorting technology
This facility processes approximately 24,000 Mg of waste annually, consisting primarily of mixed waste (about 85%) and a smaller portion of selectively collected waste (about 15%).
The proportion of sorted PET bottles and aluminum cans in the waste delivered for sorting is approximately 1.6%.
The economic value of the sorted PET bottles and aluminum cans, considering the market price of the raw material fraction, DPRs (recycling certificates), and the gate fee, is approximately 1 million zloty.
The recovery level of raw material fractions directed for recycling will be reduced by approximately 1.2 percentage points due to the loss of 80% of PET bottles and aluminum cans following the introduction of the deposit return system.
The estimated annual economic loss is approximately 0.8 million zloty, which includes the loss of revenue from the sale of PET bottles and aluminum cans, the sale of DPRs, and the loss of revenue from the fee for accepting waste for processing (gate fee). Over a 10-year perspective, this loss will amount to approximately 8 million zloty.
The decrease in revenue from the sale of raw material fractions will amount to approximately 52%.
The increase in unit processing costs of waste due to a decrease in the amount of waste delivered for processing will be approximately 1.3%.
The estimated increase in the fee for processing municipal waste, per 1 Mg, necessary to compensate for the losses from the decrease in revenue from the sale of PET bottles and aluminum cans, the decrease in revenue from the sale of DPRs, the lost fee for accepting waste for processing, and the increase in unit processing costs of waste as a result of the introduction of the deposit return system and the loss of 80% of PET bottles and aluminum cans in the waste streams accepted for sorting will be approximately 36 zloty/Mg.
Case Study 6: a medium-sized private facility with advanced sorting technology
Approximately 25,000 tons of waste are delivered to this facility for sorting annually. All of this waste is collected selectively.
The share of sorted PET bottles and aluminum cans in the waste delivered for sorting reaches approximately 11%.
The economic value of the sorted PET bottles and aluminum cans, considering the market price of the raw material fraction, the price of DPRs (recycling certificates), and the gate fee, is approximately 7 million zloty.
The recovery level of raw material fractions directed for recycling will be reduced by approximately 5.2 percentage points due to the loss of 80% of PET bottles and aluminum cans following the introduction of the deposit return system.
The estimated annual economic loss is approximately 5.6 million zloty, which includes the loss of revenue from the sale of PET bottles and aluminum cans, the sale of DPRs, and the loss of revenue from the fee for accepting waste for processing. Over a 10-year perspective, this loss will amount to approximately 56.3 million zloty.
The decrease in revenue from the sale of raw material fractions will reach approximately 47%.
The increase in unit processing costs of waste due to a decrease in the amount of waste delivered for processing will be approximately 9.6%.
The estimated increase in the unit processing costs, per 1 Mg, necessary to compensate for the losses from the decrease in revenue from the sale of PET bottles and aluminum cans, the decrease in revenue from the sale of DPRs, the lost fee for accepting waste for processing, and the increase in unit processing costs of waste as a result of the introduction of the deposit return system and the loss of 80% of PET bottles and aluminum cans in the waste streams accepted for sorting is approximately 290 zloty/Mg.
Case Study 7: a small private facility with manual sorting technology
This facility processes approximately 3,2 tons of waste annually, all of which is selectively collected.
The share of sorted PET bottles and aluminum cans in the waste delivered for sorting is approximately 19%.
The economic value of the sorted PET bottles and aluminum cans, considering the market price of the raw material fraction, the price of DPRs (recycling certificates), and the gate fee, reaches approximately 1.7 million zloty.
The recovery level of raw material fractions directed for recycling will decrease by approximately 6.7 percentage points due to the loss of 80% of PET bottles and aluminum cans following the introduction of the deposit return system. The estimated annual economic loss, reaching approximately 1.34 million zloty, includes the loss of revenue from the sale of PET bottles and aluminum cans, the sale of DPRs, and the loss of revenue from the gate fee. Over a 10-year perspective, the loss is estimated to be approximately 13.4 million zloty.
The decrease in revenue from the sale of raw material fractions is estimated at approximately 53%.
The increase in unit processing costs of waste due to a decrease in the amount of waste delivered for processing is estimated at approximately 18%.
The estimated increase in the fee for processing municipal waste, per 1 Mg, necessary to compensate for the losses from the decrease in revenue from the sale of PET bottles and aluminum cans, the decrease in revenue from the sale of DPRs, the lost fee for accepting waste for processing, and the increase in unit processing costs of waste as a result of the introduction of the deposit return system and the loss of 80% of PET bottles and aluminum cans in the waste streams accepted for sorting will be approximately 500 zloty/Mg.
A necessary mechanism to restore profitability and motivate recycling
The article’s aim was to determine the impact of introducing a deposit return system for PET bottles and aluminum cans on the operation and development potential of municipal waste sorting facilities. The analysis shows that such a system will have a significant and, at the same time, negative impact on the economic performance of these facilities. The annual cost to municipal waste sorting facilities in Poland, resulting from the introduction of the deposit return system, including the loss of revenue from the sale of PET bottles and aluminum cans and the corresponding DPRs (recycling certificates), as well as the loss of revenue due to the reduction in waste streams delivered to the facilities, will be approximately 576 million zloty annually. Over a 10-year period, this amounts to approximately 5.76 billion zloty. This represents a loss of the most valuable raw material fractions, accounting for about 2.1% of the mass of municipal waste directed to sorting in these facilities. These fractions are typically used to finance the ongoing operations of the facilities and future investments.
On the other hand, the effectiveness of the deposit return system is questionable. It is estimated that its introduction may increase recycling rates by only 0.2 to 0.7 percentage points. Meanwhile, the cost of implementing the deposit return system, according to Deloitte’s estimates, will be 14.2 billion zloty. This amount would be sufficient to build approximately 140 medium-sized, advanced municipal waste sorting facilities in Poland. Additionally, the operational costs of the deposit return system are estimated at 23.1 billion zloty over a 10-year period.
The impact of introducing the deposit return system on individual facilities depends on their specific circumstances and conditions. As a result of the system, facilities will lose several dozen percent of their revenue from the sale of raw material fractions. The estimated annual economic loss for each facility is calculated in millions of zloty. Over a 10-year period, this loss is calculated at tens of millions of zloty for each facility. Facilities that primarily process selectively collected plastics, including manual facilities where the technological process is focused mainly on separating PET bottles and aluminum cans, will experience the greatest impact. The higher the proportion of selectively collected waste in streams directed to sorting and the higher the sorting efficiency of a given facility, the greater the losses the facility will incur due to the introduction of the deposit return system.
Facilities are responsible for carrying out waste processing and preparing it for recycling. The deterioration of their economic conditions, a significant reduction in the efficiency of planned investments, and increased waste processing costs are factors that will certainly not facilitate the achievement of higher recycling levels. Therefore, to enable the achievement of growing waste management goals (higher and higher levels of recovery and preparation of waste for recycling), it is necessary to implement a mechanism that will restore profitability, ensure market-based financing of waste management goals, provide stability for facility operations, and motivate the recovery of every ton of raw material fraction.
What conditions must be met for facilities to remain on track to achieve waste management goals after the introduction of the deposit return system? What actions can municipal waste sorting facilities themselves take to improve their situation after the changes that will occur as a result of the introduction of the deposit return system? Is compensating facilities for losses caused by the introduction of the deposit return system, in the form of a subsidy for waste processing, a sufficient solution? These are questions that go beyond the scope of this article, and an attempt to answer them will be made in the next analysis.
The preparation of this article was made possible thanks to data and information obtained from many sources. I would like to thank everyone who provided such data. It was used in the prepared computational model, which allowed to estimate the economic effects of introducing the deposit return system for municipal waste sorting facilities. Despite our best efforts, errors may have occurred in the calculations and the article that were not intentional. Therefore, if any errors, outdated or incorrect data have been found in the article, please kindly inform me by sending an email to: info@wastetoeconomy.com. Thank you.
Marek Klimek
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