California’s struggling Bottle Bill system is a mess. Here’s why

Some of us might have missed it.

But while we weren’t looking, the infrastructure that supports California’s 35-year-old Bottle Bill began to collapse, putting almost half its 2,448 certified beverage container redemption sites out of business over the past decade.

And that makes it harder for people to redeem the 5- and 10-cent deposits they pay on the bottles and cans they purchase.

Though legislators and state officials are trying to repair the system, wildly fluctuating values for aluminum and plastic have meant operators couldn’t sustain the cost of running buyback centers.

The Bay Area was particularly affected. By 2017 eight of the state’s 10 worst-served counties — including Sonoma County — were in the Bay Area.

Sonoma County once had 24 redemption centers. Until the launch of a new Sebastopol site last month, it was down to four. In some more rural Northern California counties, there are none.

“We’re all paying that 5 cents, but none of it is getting redeemed at the level it should,” Zero Waste Sonoma Executive Director Leslie Lukacs said.

Recyclable PET plastic values have rebounded to record highs in the past year, but the industry’s yearslong decline helped drag down California’s recycling rate from a peak of 85% in 2013 to around 70%, according to the California Department of Resources Recycling and Recovery, or CalRecycle.

And that has left hundreds of millions of dollars in refundable 5- and 10-cent deposits unclaimed. By June the amount is expected to exceed $635 million, CalRecycle said, an amount that has more than doubled over the past two years.

Rachel Machi Wagoner, a Healdsburg High alumna who was appointed CalRecycle director in December 2020, said some of the problem can be attributed to soaring consumption of bottled and canned drinks during the COVID pandemic.

When restaurants, bars and breweries closed, people at home began consuming drinks that once came from beer taps and fountains. At the same time, the few redemption sites that were open were less available, and public interactions were limited.

“We’re at 27½ billion containers being sold in California every year,” said Mark Murray, executive director of Californians Against Waste. “The number of containers recycled as of January 2022 was 19 billion containers (over the previous 12 months). That’s a record high number. We’ve never been at 19 billion before, but the recycling rate is still about 70%.”

Industry ‘death spiral’

Hundreds of redemption sites closed in 2019 and 2020, due in part to softened demand for aluminum cans because of a single company’s decision to transition from producing can sheet to auto body sheets, said Susan Collins, executive director of the Container Recycling Institute.

When the COVID shutdowns hit and people stopped driving, plummeting oil prices made it cheaper for producers to use virgin plastic than recycled PET plastic for most water and drink containers, Collins said.

The state CRV system includes a formula to offset market shifts and help redemption sites stay afloat. But material values are averaged over 12 months, so it takes a year for state subsidies to catch up with the lower prices center operators get for the bottles and cans they redeem and sell.

In addition, operators faced other costs, like rising rents and mandatory minimum wage increases.

State certification also requires redemption centers to be open at least 30 hours a week, including one weekend day, which means owners can’t cut costs by reducing hours.

The chronic underpayment and cumulative losses, Collins said, resulted in “a death spiral” that took out a whole chunk of the industry, including a company called rePlanet, which had hundreds of redemption sites at one point.

Many of the return center operators who went under were “small mom and pop businesses” who had no way to make it through, said Murray, with Californians Against Waste.

rePlanet shuttered 191 sites in 2016 and its remaining 284 last August. At one point it ran 19 centers in Sonoma County alone.

“We’re fortunate that there were a thousand businesses in California that stayed in the recycling game, because we could have lost even more,” Murray said.

Lawmakers, CalRecycle and recycling watchdogs have turned their attention to what Collins’ organization calls “the California Crisis” in recent years, leading to a series of developments designed to improve access to redemption services.

Nursing a failed system

And materials prices have been rising.

State law now requires plastic beverage containers to include at least 15% recycled material. The law, which took effect Jan. 1, has helped triple the price of clean Grade A PET plastics, Collins said.

Aluminum prices also rose during the pandemic, as brewers who usually delivered their product to restaurants and bars in kegs were forced to can their products instead, Collins said.

The number of certified redemption sites has bounced up slightly, as well. Thirty-nine new ones added over the last year makes 1,272 as of April 1, CalRecycle said.

But fixing the system remains a challenge. Solutions have to account for consumer behavior, a volatile recycled materials market, wage concerns and real estate costs — with enough structural flexibility to be truly responsive to changing conditions.

At least one elected leader, State Sen. Bob Wieckowski, D-Fremont, thinks nothing short of a complete overhaul will do — one that makes beverage producers responsible for the container redemption and recycling program, as they are in other states. A bill he authored, SB-38, would do that. It was approved in the Senate last year and awaits action in the Assembly this summer.

“People in the state of California have this perception that we really are cooler than cool,” Wieckowski said. “We care about recycling. We care about climate.”

Instead, officials are trying to nurse a failed system back to health with bandages — “throwing everything at the wall and hoping something sticks” — when successful models that put the burden on beverage producers are observable around the nation and the world, Wieckowski said.

Lessons from other states

“Other than Hawaii, they’ve all allowed private industry or some nonprofit to run the program. They’re not in the business of running recycling programs,” he said.

Oregon, which adopted a bottle bill in 1971 requiring beer and soda containers to be redeemable, has always made it the responsibility of distributors to manage how that happens.

Most now are part of the Oregon Beverage Recycling Cooperative, which has an 84% redemption rate at present, after falling from 90% during the pandemic, External Relations Director Eric Chambers said. The cooperative had $38.2 million in unclaimed deposits in 2021.

A key component, he said, was the state’s decision to raise the redemption value from 5 to 10 cents in 2017. (Wieckowski said raising California’s rate to 10 cents would require a two-thirds vote of both houses, making it too high a hill to climb.)

Oregon consumers also have multiple avenues for returning containers, including reverse vending machines and bag drop-off sites that can apply redeemed deposits to a selected charity or college fund, among other things.

Since the industry is required to take a stewardship role, make sure materials are repurposed and convenient public access points available, there’s no need to subsidize or calculate operational costs for redemption centers, Chambers said. All materials are reused domestically for container manufacturing.

“There is no market volatility that affects consumer return options,” he said.

California legislators have displayed an interest in greater flexibility, including allowing pilot program participants like San Francisco, Culver City, Irvine and San Mateo and Sonoma counties to take a stab at a bag-drop collection program, mobile redemption centers and other innovations used successfully in Oregon and elsewhere.

CalRecycle this month also put forward a $330 million budget proposal to expand redemption opportunities around the state.

It included $100 million to install about 2,000 reverse vending machines through grants to high school and college campuses and retailers, as well $55 million to expand access through mobile recycling programs in rural and underserved communities.

Another $50 million is being considered to maximize the quality of recycled containers to help get more recycled materials into their production, and $25 million for new infrastructure and technology.

One key provision put $100 million toward a temporary doubling of the refund people get in return for bottles and cans — which Oregon and other states have done with great success.

All proposals are subject to legislative approval and already are generating questions and concerns, given the scale of the proposed appropriations when the pilot projects have just begun to be established.

But Wagoner said the money is intended to be spent over three to five years, targeting underserved areas and “weak” spots in the system.

“Our statute for this was cutting edge in 1986, but we have learned a lot in 35 years,” she said.

“We’re trying to take our recycling system and turn it into a circular economy,” she said. “The push and pull at all points needs to be balanced, and it needs to be the right tension points.”

You can reach Staff Writer Mary Callahan at 707-521-5249 or mary.callahan@pressdemocrat.com. On Twitter @MaryCallahanB.