Is circularity being held back by risk-aversion and protectionism?


Digital DRS

Resource Conference Cymru speaker Duncan Midwood, Co-Founder of the DDRS Alliance and CEO of Circularity Solutions, explains how risk aversion and protectionism may be the biggest barriers to adopting more effective and efficient solutions to support circularity in packaging.

Deposit return schemes (DRS) have been largely unchanged for 40 years, however, technology advancements have created a new approach to DRS.

The very first drink DRS appeared in Sweden in 1984. The system formalised and scaled an incentive programme nationally to encourage consumers to return their used drink bottles for recycling.

Since those early days, DRS has been implemented in around 45 countries around the World – all using the same basic principle of consumers returning in-scope items to central locations using Reverse Vending Machines (RVMs) as the main mechanism for checking and accepting returns (manual returns are also used – operated by shop staff, for example).

Digital DRS
DRS has a huge opportunity to improve the collection of drink packaging for recycling, Midwood said.

DRS has a huge opportunity to improve the collection of drink packaging for recycling. However, as currently only relatively wealthy and developed countries due to the cost and infrastructure requirements of DRSs, their impact is limited when looking at the full scale of the problem.

Of all the containers put into the market each year across the globe, my educated estimate is that current DRS solutions are accessible to less than half. If we look wider than simply semi-rigid cylindrical drink containers (including other packaging forms and beyond drink packaging), the percentage of packaging accessible by RVM-based DRS solutions is a fraction of the global challenge.

Digital DRS: Progressing the circular economy through digital solutions

digital DRS

In 2018, I helped to pioneer a new concept by utilising the emerging trend of digitalisation. This new model for DRS has become widely known as Digital DRS – or DDRS. DDRS potentially offers a more efficient solution for DRS and enables more effective return and reuse systems compatible with almost any form of packaging.

A DDRS gives consumers the ability to scan a serialised code on a drinks container using a smartphone app to redeem a financial deposit.

This revolutionary approach could simplify return points and reduce costs significantly, which opens up the opportunity to provide low-cost return points in the community or even at home through kerbside collections.

In the truest sense of the word, DDRS was destined to be disruptive – disruptive to current DRS thinking, approaches to waste management, related legislation and, of course, to those organisations who had built strong businesses supporting the traditional model of DRS.

This approach has attracted many who seek to undermine, or disrupt, the disruptor.

In the finest traditions of those who wish to protect their current position, this approach has attracted many who seek to undermine, or disrupt, the disruptor.

However, one thing has become very clear: the vast majority of serious stakeholders of DRS do believe that DDRS can offer major advantages over the current model. The disagreements appear when discussing when it will be “proven” and how and where it should be implemented first. This is where the significant (perceived) issue of risk plays its role.

Governments and decision-makers in the modern world are generally not rewarded for taking risks. Governments and associated agents tread carefully in making changes to something that has “worked” for the past 40 years that are supported by powerful voices in the incumbent industry.

Industry too – even those that see the potential benefits clearly – are loathed to “add value” for fear of being first with something new and not delivering. Compliance to current thinking seems to be more highly rewarded than advancement in today’s politico-commercial environment.

With so many potential advantages, one might expect environmental groups and related NGO’s (non-governmental organisations) to be firmly behind DDRS. Some are of course. But some are buried deep in conspiracy thinking – believing that DDRS is merely a ploy being used by industry and legislators to delay a DRS implementation.

Digital DRS
Duncan Midwood is speaking on the Digital DRS, a glowing success or a one hit wonder? panel at Resource Conference Cymru.

In the context of this article, one might see how ridiculous that is! Indeed there is clear evidence here in the UK where that clearly isn’t true: the long-awaited DRS solution for Scotland was effectively ditched (sorry – postponed) because of concerns around the knock-on impact on kerbside collections, the UK internal market and drinks industry, cost of living, and online retailers.

Digital DRS was nowhere to be seen in this instance – and yet it is clear that the old one-size-fits-all DRS model clearly raises concerns for the UK. Sometimes those who care so deeply about a cause might benefit from standing back and looking at how to get the best long-term impact – rather than champion a short-term solution that will not stand the test of time and have to be replaced in 7 to 10 years’ time.

As one might expect for a business model that has remained broadly unchanged for 40 years, there are corporations that are entrenched in the existing business model and are performing very nicely as a result. Some of these corporations have built enormous influence over opinion-leaders and decision-makers and, understandably, their strong-aired views carry much weight.

“It’s not ready and it’s not proven” and “let’s just put in what has worked elsewhere since the eighties” are statements I hear all too often.

Proving DDRS will work at scale is a real challenge. A digital scheme is one of those things that cannot be fully piloted at a small scale. A recent full-town trial in Brecon, Wales has taken the proof as far as it can go without a much larger pilot.

Arguably the only way to truly pilot a digital DRS is to implement it nationally.

Arguably the only way to truly pilot a digital DRS is to implement it nationally. For example, the essence of a DRS is for all retailers to be compelled to charge a deposit – temporarily making their products more costly to consumers.

In today’s online world, no retailer will feel comfortable adding to the cost of their products if their competitors are not compelled to follow suit. And further, DDRS requires the products to be serialised (uniquely coded) – which is a challenge to trial in a small and regional way for large multinational companies that supply products to multiple countries.

So we find ourselves in the position where the powers that be do not feel the system is proven – so won’t back it for a national implementation nor a large enough “regional” pilot to be carried out to prove that it delivers what it promises. What to do?

Digital DRS requires all relevant drinks producers and retailers, and their associated supply chains, together with waste management organisations and local authorities to think and do things differently – an almost impossible task without strong leadership from government or industry (or both).

So what needs to happen? 

deposit return scheme DRS

We either need for a revolution to happen – and without a huge external influence that is unlikely – or courageous leadership from the leading brands/producers and retailers to support this evolution. We need a new approach to risk and a preparedness to challenge those who seek to protect what they already have.

What is now being presented by the DDRS Alliance, the leading authority on Digital DRS and the only not-for-profit organisation set on creating a global standard for DDRS, is a programme of pilots to demonstrate and validate every aspect of the system culminating in a regional pilot of the solution where a mainstream DRS runs alongside a Digital DRS. 

The technology leadership is clearly in place. But the DDRS Alliance only has the ability to show the horses where the water is. It’s down to industry and government to take a drink and support the needed development to happen in a timely and sufficiently large scale manner.

Our planet depends on it!

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