How often do you encounter discarded plastic bottles and aluminum beverage cans on the streets, beaches, or in the sea nowadays? Quite rarely, wouldn’t you agree? Even the once-ubiquitous water and soft drink bottles that used to be placed on pavements to deter cats and dogs from relieving themselves on the spot have now largely disappeared, replaced by fabric detergent containers.
This did not happen by waving a magic wand but is the positive impact of the introduction, last year, of a deposit refund system (DRS) aimed at reducing the environmental footprint of single-use beverage containers. DRS are systems where consumers pay a deposit on beverage containers at the point of sale, which they can then get back when they return the empty containers for recycling.
There’s no doubt about it: effective DRS systems can and do drive substantial improvements in the collection of packaging for the non-alcoholic beverage industry. The resulting higher recycling rates are helping to reduce the amount of plastic waste entering our environment and littering our public spaces.
Even though deposit systems have been around for quite some time, their application as a policy instrument to address litter and the mounting waste challenge has gained momentum in recent years. As a result of their success, DRS systems are becoming increasingly popular across the world. By the end of 2022, over 50 countries, states, and provinces worldwide had DRS systems for the recycling of single-use drink containers, and Reloop – an international nonprofit organisation leading the global transition to a circular economy with its vision of a world free of waste – predicts that, by the end of 2026, this number will grow to more than 70.
On this front, Malta, together with a number of other European Union Member States, is spearheading the change towards a more sustainable future. Currently, 12 out of the 27 EU countries – Malta included – have mandatory DRS in place, and another ten have DRS legislation on the books. A 2020 report by the European Court of Auditors found that countries with a DRS collect on average over 80% of Polyethylene terephthalate (PET) bottles, compared to the average 58% across the EU. After just one year – the Beverage Container Refund Scheme was launched in Malta on the 14th November 2022 – Malta has managed to reach a collection rate of 79% and a recycling rate of 72%.
The numbers leave no doubt that Malta’s national DRS has been a remarkable success story, proving highly effective in increasing recycling rates, reducing littering, and fostering a more environmentally conscious society. The entity in charge of the process is BCRS Malta Ltd, a Maltese not-for-profit company licensed by Circular Economy Malta to establish and operate the system on a national basis.
A point of reference
We sat with Pierre Fava, Chairman of BCRS Malta (formerly the President of the Malta Employers’ Association), and Alan Meilak, the newly appointed CEO, at the company’s 5,500m2 premises in Ħal Far.
Both are filled with immense satisfaction with the remarkable outcomes of the scheme and eagerly discuss Malta’s incredible success in exceeding the collection and recycling targets set for the first year. In fact, the set target of 65% for recycling has been surpassed by 8% while the set target of 70% for collection has been outdone by 9%.
“Our aim is to ensure that Malta reaches the ambitious targets set by the EU,” said Pierre Fava. “The people are thankfully eagerly participating in the scheme. We should feel proud of having become a point of reference for other EU Member States that are still in the process of introducing a DRS.”
For 2025, Malta has set itself a target that a minimum of 85% of all PET bottles should be collected whilst 80% of this should be recycled. The target for 2026 and thereafter is that of 90% of all single-use beverage containers should be collected and 85% recycled. In this light, one of the EU’s proposals is the introduction of DRS in all Member States.
How did it all begin?
Pierre Fava said that it was the consciousness raised by the 4th edition of the Our Ocean Conference, which was hosted by the EU in Malta in 2017, that pushed the local importers and producers of beverages in single-use containers to take further environmental action as part of their social corporate responsibility.
He recalled that he was approached by beverage producers to coordinate an initiative, and the first thing they did was meet with the Government to learn more about the policy and intentions in this regard. The Government’s backing was particularly encouraging given the lackluster performance of existing recycling programmes, with recycling rates struggling to exceed the 10% mark.
Work began for the necessary legislation to be drawn up. What emerged as of paramount importance, he said, was that all stakeholders – Government, importers, producers, retailers – were actively involved in the system to ensure its success. A decision was taken to avoid risking a situation where a private operator runs the scheme simply as a money-making machine. In fact, BCRS Malta’s business model is that of a not-for-profit company in which all stakeholders are represented by directors who are appointed by a number of associations representing their interests. This set-up ensures that the interests of all stakholders – large, medium-sized, or small – are taken into account.
Is the industry really so selfless?
At this juncture, we had to point out that several are those who cannot fathom how the industry which, in its very essence, exists to make a profit, could opt to run a national scheme through such a business entity that is organised and operated for a social purpose, rather than to generate financial profit for its shareholders. These skeptics believe that there must be a catch somewhere.
Pierre Fava explained that not-for-profit companies can generate revenue from their services, but the funds that remains after the operational costs and bills have been paid is reinvested back into the organisation to further its mission or to provide community services.
To illustrate this responsiveness, he highlighted the addition of bulkfeed machines in response to public demand. The company’s revenue was instrumental in financing ten such machines.
Mr Fava stated that the company’s initial capital was raised from bank loans secured by the directors and from exemption certifications issued by the government for certain eco-tax dues. These funds were then invested in BCRS Malta, demonstrating the company’s predominantly private-sector financing.
“Our directors put the environment and the country’s interest before their own,” said the company chairperson, “and I declare that very honestly. It is so much so that the response of the environmental NGOs has been phenomenal; they are our biggest supporters.”
He pointed out that the company’s commitment towards the environment is so steadfast that its large plant has one third the carbon footprint of similar buildings of comparable dimensions. Since the roof is made of – relatively light – timber, it allowed for the innovative use of aerated concrete for the rest of the building, marking a first-time use of this material in Malta.
Pierre Fava describes BCRS Malta as a company that’s very attentive not only to its shareholders’ needs but also to those of the pople. It has no qualms in spending money to tweak the system on the basis of feedback, even if it goes over budget, as was the case with the €2.5 million it spent on the bulkfeed machines. Because of that and other ad hoc investments, the €15 million capital expenditure that had been originally budgeted grew to €20 million.
Furthermore, the company has listened to people’s complaints about noises from public hubs installed in residential areas, and decided to adjust the opening hours of a selected number of them.
Asked about online comments by people who complain that they frequently find RVMs out of order or full, Mr Fava replied that machines are out of order usually because they would be full. “Our runners are passing by every machine on a regular basis to ensure that they are emptied in time,” he said. “We also have instances where machines are jammed, which is many a time due to the conveyer getting sticky as consumers are leaving too much beverage in the containers. In other instances, we would have a machine that develops a mechanical fault which is seen to either remotely or by a technician physically calling at the site. It is pertinent to explain to consumers that machines are monitored on a 24/7 duration and any faults are reported in real time. Obviously if a fault develops after working hours or during the night it is seen to the following day.”
Mr Fava added that, as part of its commitment towards the community, the company has also donated a number of electric cars for the Silver T service, that offers local transport for older persons to conduct their daily errands within the community. That way, the elderly can deposit their containers at the hub and get their vouchers.
Where does the company gets its revenue from?
Recycling facilities abroad purchase the material BCRS Malta exports at a price that is highly variable, influenced by a range of factors. Prior to commencing operations in 2022, the price for plastic was trading at very high prices to that it managed to procure last summer when the price plummeted to a mere €80 per tonne. Apart from the administrative fee paid by retailers and producers to be part of the scheme, this is BCRS Malta’s only income.
What happens with the containers deposited in the RVMs?
Once inserted in a reverse vending machine (RVM) as part of the DRS, beverage containers undergo a series of steps to ensure their proper collection, sorting, and recycling. Here’s a breakdown of the process:
Verification and Identification: The RVM scans the barcode or QR code on the beverage container to verify its eligibility for the deposit refund.
Sorting and Separation: The RVM automatically sorts the containers based on their material type (e.g. PET plastic, glass, aluminum, iron) to facilitate efficient recycling.
Crushing and Compacting: The sorted containers are automatically crushed or compacted to reduce their volume and facilitate transportation to recycling facilities. At the end of this stage, the customer receives a voucher consisting of a 10c refund on each container deposited.
Collection and Transportation: The crushed and compacted containers are collected from the RVMs once a day and transported to BCRS Malta’s plant in Ħal Far.
Packaging and exportation: At the Ħal Far plant, the containers are packaged into large cubes and transported by sea to export facilities abroad. The absence of economies of scale renders recycling these containers in Malta uneconomical.
Remanufacturing or Upcycling: In the recycling countries, the material is shredded or pelletised to be used to manufacture new beverage containers, packaging materials, or other beverage related products. The recycling companies provide BCRS Malta with a certificate that proves that the material has been used to manifacture new beverage containers as part of the circular economy. A PET bottle can be recycled from nine to 12 times.
How many RVMs have been installed?
There are 341 RVMs installed around Malta and Gozo. Of these, 52% are public hubs and the rest are installed on retailers’ premises. They can be located here.
Two types of vouchers
The vouchers issued by RVMs in public hubs can be redeemed at any supermarket or retail outlet selling groceries that is registered with the system. On the other hand, vouchers issued by RVMs installed on retailers’ premises can only be redeemed at that particular retail outlet. A handling fee is paid by BCRS Malta to the retail companies as compensation for its permission to place a machine on its property. In the case of public hubs, the company pays the Government an encroachment fee.
Almost 90% of vouchers issued by the RVMs are redeemed in real time.
Three retailer categories
In all, there are around 1,600 businesses the principal activity of which is classified as retail sale in non-specialised stores predominantly offering food, beverages, or tobacco and which are registered with BCRS. Of these, around 46% are redeeming vouchers. Pierre Fava explained that credit terms fall within industry standards and reflect the same conditions retailers have with their payments to suppliers and in some cases they are better than these. “In a nutshell, retailers are never out of pocket,” he pointed out. [AM1] Customers also have the right to return their empty containers to their grocer and ask for the refund amount to be deducted from their shopping bill.
When asked about retailers who refuse to redeem vouchers, Mr Fava stated that these numbers are very limited. He added that he sees no legitimate reason for this practice.
Children are our future
Given the encouraging public reception to Malta’s national DRS thus far, the future holds promise. BCRS Malta’s CEO, Alan Meilak, reaffirmed the company’s conviction that ensuring a sustainable future heavily relies on educating the younger generation. With this in mind, BCRS Malta has launched an initiative inviting school children to visit its plant and experience the recycling process firsthand. This initiative has generated considerable enthusiasm.
As the global movement towards sustainability continues to grow, we can expect to see more countries adopt DRS systems in the coming years. In Malta, the positive impact is likely to continue in the coming years as the scheme makes an ever-growing contribution to Malta’s waste management system and to the promotion of sustainable practices.