Lithuania Exceeds Container Return Rate Expectations as TOMRA Supports New State-Of-The-Art Deposit System - Case Study
LITHUANIA: TOMRA supported in implementing Lithuania's new container deposit system, launched in 2016 with a tight ramp-up timeframe. The roll-out represented the first time TOMRA worked with a “throughput” model in Europe. Lithuania's program has exceeded expectations, with 91.9% of all beverage containers returned for recycling by the end of 2017.
Container deposit system snapshot:
- Country population: 2.88 million
- Container deposit: €0.10
- Eligible containers: Glass, and non-refillable
plastic and metal beverage containers, 0.1-3 liters
- Container return rates: 34% (PET) prior to container deposit
scheme, 74.3% at end of first year, 91.9% at end of second year
Designing the deposit system
Kęstutis Trečiokas, former Minister of the Environment of the Republic of Lithuania
In February 2016, the government of Lithuania implemented a “deposit return system”, to give consumers an incentive to return used beverage containers for recycling. To combat litter and increase collection and recycling rates, consumers would pay a deposit amount of €0.10 when purchasing eligible drink containers, to be refunded when the empty container is returned for recycling.
The Lithuanian Ministry of Environment initiated the deposit process in April 2013, passing amendments to the packaging law through parliament a year later. The legislation would apply to non-refillable glass, plastic and metal beverage containers, 0.1 to 3 liters in size.
In March 2015, the Ministry of Environment named non-profit Užstato Sistemos Administratorius (USAD) as operator of the new deposit system. USAD was established by the Lithuanian Association of Brewers, Association of Lithuanian Trade Enterprises and Lithuanian Natural Mineral Water Manufacturers’ Association, in a case of extended producer responsibility. The system operator is responsible for a transparent flow of data, money, material and service steams within the system. Data management, deposit clearing, reporting, the operations of the logistics system, marketing collected materials, and educating stakeholders and consumers are also responsibilities held by USAD. Its sources of income include unredeemed deposits, revenue from the sale of collected materials and administration fees paid by beverage producers.
To guarantee convenient return possibilities for consumers, the government chose a “return-to-retail” collection model – meaning stores selling beverage containers must also receive used containers back for recycling. In Lithuania this applied to stores larger than 300m2 and all stores in rural areas, with optional participation from other stores. Retailers were provided reverse vending machines (RVMs), either inside the store or as outdoor kiosk installations, depending on retailers’ size. Consumers are refunded their deposit as vouchers that can be redeemed in store as cash or credit toward their shopping bill, bringing additional foot traffic into stores.
TOMRA supports roll-out in a tight timeframe by partnering with USAD
After a public tender process, USAD selected TOMRA to provide reverse vending solutions for the deposit system, to automate the return of containers and increase efficiency. TOMRA’s international experience in other markets with successful deposit systems, the diversity of products for both industry and consumers, and the need to roll out these solutions with a short deadline of 100 days, enabled TOMRA to uniquely contribute to establishing a state-of-the art deposit system.
“We have a strong partner TOMRA who can do this very big job in advising us, sharing know-how and also providing solutions for automated collection points,” said Gintaras Varnas, CEO, Užstato Sistemos Administratorius (Lithuanian deposit system operator).
What makes the cooperation between TOMRA and USAD unique is the financing model. In Lithuania, the investment in the RVM infrastructure was taken by TOMRA itself. Eligible stores receive an RVM free of charge. USAD pays a handling fee per collected container to the store, to cover RVM-related costs like space, setup, maintenance, data exchange, etc1. TOMRA recuperates its investment via a “throughput” fee that USAD pays for each container collected through an RVM.
The roll-out commenced in Lithuania in October 2015, just 2.5 years after the government initiated the deposit process, and one month after TOMRA was selected as the technology provider. TOMRA was tasked with providing 1000 RVMs, with a mix of low, medium and high-volume machines to suit different locations. TOMRA partnered with three Baltic construction companies to manufacture and deliver 350 RVM kiosks, which had to be warm, waterproof, easily transportable, and plug-and-play ready for electricity and internet connectivity.
Industry satisfaction, high return rates
Gintaras Varnas, Managing Director of USAD in Lithuania, tries out the new reverse vending machine
Brewers and retail stakeholders have been pleased with the implementation of the Lithuanian container deposit scheme. Laurynas Vilimas, Managing Director, Lithuanian Retailers Association, said, “I can say with absolute confidence the deposit return scheme was the right thing to do.”
National supermarket chain Maxima installed approximately 200 TOMRA RVMs across their stores. “For business, I think that is also quite good, because people then come to our shop with their deposit; they will come back and they will buy some new products. It’s a big benefit for our business,” explained Diemante Mitkuviene, then Director of Processes and Quality Management Department, Maxima. “We are a market leader, so for us it is good to work with a market leader like TOMRA.”
By the end of 2016, 99.8% of the Lithuanian public were aware of the deposit system, with 89% having used it at least once. 58% of consumers reported recycling more, and 78% believed the deposit system is good and necessary. Prior to the scheme, only one-third of all beverage containers in Lithuania were returned. USAD had a goal of a 55% return rate in 2016, and far exceeded that mark with 74.3% of all beverage containers returned for recycling. The return rate reached a huge 91.9% by the end of 20172. The container deposit scheme was voted the third-best improvement to the country during that year.
“We feel an obligation to take care of our country, society and nature. That is why we wanted to design a deposit return system that would work as well as possible for citizens, producers, importers and traders,” stated Saulius Galadauskas, head of the Lithuanian Brewers Association and chairman USAD. “We can be proud of our deposit return system, which brings us closer to the Lithuania we want to see – a cleaner, more beautiful and more modern country.”
1 A lower handling fee is also paid to stores that do not have an RVM.
2 Glass 83% / PET 92% / cans 93%.