California Is Sitting On $350 Million In Unclaimed Bottle Deposit Funds, Thanks To ‘Recycling Deserts’


January 4, 2022

SACRAMENTO — Every time Californians purchase a bottle of beer or can of soda, they pay an extra nickel or dime — a deposit they can theoretically get back if the container is returned to a recycling center.

But, in practice, billions of containers are never recycled, so the money is forfeited. Currently, only about 68% of bottles and cans are recycled, including those tossed in curbside bins.

California’s bottle deposit program has about $350 million in unclaimed nickels and dimes as a result, a surplus that built up over the past several years as redemption rates tumbled due to upheaval in the recycling industry.

Consumers aren’t returning bottles and cans because, in large part, there are far fewer recycling centers where they can redeem empties than there were five years ago, creating what are essentially “recycling deserts.”

“It’s become a tax on consumers, and it’s not fair,” said Jamie Court, president of Consumer Watchdog, an advocacy group pushing to overhaul the bottle program. “It should be their money, and they should have an easy opportunity to get it back.”

The situation has prompted a fierce debate at the state Capitol about how to save the bottle program, which was the largest program of its kind in the U.S. when it was created in 1986.

San Francisco has been the poster child for the consequences of the ailing bottle-recycling program. Despite the city’s eco-friendly reputation, it has the lowest redemption rate per capita of any county in the state, according to Californians Against Waste.

On Wednesday, the city plans to launch a new recycling effort using mobile redemption trucks — a move designed to try to reverse the drop-off after most of the city’s recycling centers closed.

There are only about 1,200 recycling centers statewide today, compared with roughly 2,600 centers in 2013. That year saw 85% of bottles and cans recycled, the program’s single most successful before it began a downward spiral.

Recycling centers have closed in droves due to many factors, such as soaring real estate prices and tumult in the global market for scrap materials, such as shifting aluminum prices and a vanishing market for plastic.

California’s program is now at a crossroads, and the direction state lawmakers choose to take over the next year could determine whether the recycling program recovers or spirals further.

Legislators are divided over two starkly different approaches: On one hand, waste haulers and some advocates want to keep the existing system and make subtle changes to keep recycling centers open. On the other side, Consumer Watchdog and a host of environmental groups want to make the beverage industry take responsibility for providing enough centers.

Rachel Machi Wagoner, director of CalRecycle, the state agency that operates the redemption program, said it’s clear that the state’s existing program created in the late 1980s wasn’t flexible enough to adapt to the challenges of the past five years.

“There is an overwhelming interest in making the program work better but not enough agreement on what that should look like,” she said. “It’s just the ‘how’ that seems to be the sticky wicket.”

In 2020, the program recycled about 18 billion bottles and cans, but more than 8.2 billion recyclable containers still ended up in landfills or as litter. The program requires consumers to pay a 5-cent deposit for containers less than 24 ounces and 10 cents for containers larger than 24 ounces.

The program includes soda, beer, juice and water sold in aluminum, glass and plastic containers. It doesn’t include wine or distilled spirits.

Advocates on both sides of the debate say the situation isn’t tenable and overhaul is needed. But they largely disagree about what approach would be the fastest, most fail-proof way to boost recycling.

AB1454, the measure backed by waste haulers and Californians Against Waste, a recycling advocacy group, aims to make it easier to keep recycling centers open by increasing the payments CalRecycle makes to help subsidize the cost of processing some materials. It would also provide grants to help open new centers in underserved areas.

That measure, by Assembly Member Richard Bloom, D-Santa Monica, passed the Assembly last year, but remains in limbo in the Senate.

Mark Murray, director of Californians Against Waste, said he supports that approach to fixing the existing program because he said the state could more easily shore up recycling centers if it paid larger subsidies to cover their costs.

Currently, the state provides recycling centers “processing payments” to help offset their costs for handling materials that aren’t profitable. But the payments are calculated using data from two years ago. Murray said that “very specific flaw” could be fixed without handling the job over to beverage companies, as Consumer Watchdog and other environmental groups propose.

“Let’s give the recycling professionals a chance to do it before kicking it over to people whose job is to sell more beer, more sugar water and more bottled tap water,” Murray said. “It’s getting the funding mechanism right to support the infrastructure.”

A competing proposal, SB38 by Sen. Bob Wieckowski, D-Fremont, would dramatically overhaul the program by requiring beverage distributors to form a stewardship organization and create a system of easily accessible redemption centers. The companies would pay fees to help get centers up and running.

The bill, which passed the Senate last year but remains in limbo in the Assembly, would increase the number of redemption centers, including reverse vending machines that redeem bottles, and require large grocers to redeem empties; today, many grocers can opt out of that requirement by paying a $100 fee per day.

Court, of Consumer Watchdog, said this approach is modeled off recycling programs in other states, like Oregon, that have higher redemption rates and put the onus on industry. He said it’s clear the program won’t work unless consumers have many places to take their bottles and cans.

“The governor and CalRecycle have to own the problem and come up with a systemic solution and stop letting the Titanic go down,” Court said. “Without convenience, there isn’t going to be greater redemption.”

Consumer Watchdog has been critical San Francisco’s mobile redemption center program. The city has received $1 million for the program, but written into the pilot effort was an exemption the Legislature passed that allowed all retailers in the city to stop taking back empty containers last summer.

The city’s new program, dubbed Bottle Bank, launches this week and allows residents to download an app and take their bottles and cans to mobile redemption trucks around the city.

Charles Sheehan, chief policy officer at the city’s Department of the Environment, said the program is designed to make redeeming bottles and cans more convenient. Consumers can bring uncrushed bottles and cans to rotating redemption sites across the city, and place them in bags with scannable barcodes. Those barcodes will later be scanned while the containers inside are counted, and consumers can be reimbursed using digital payment sites like Venmo.

Sheehan said the city hopes the program, still in its infancy, could be a model for the creative ways that California can work to revive bottle recycling.

“Waiting in line has been replaced by dropping off your bag,” he said. “It’s more modern, more efficient. It will hopefully save people time and put some money in their pocket.”

Dustin Gardiner is a San Francisco Chronicle staff writer. Email: [email protected] Twitter: @dustingardiner 

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