Cost-benefit analysis of two possible deposit-refund systems for reuse and recycling of plastic packaging in Sweden

Abstract

Plastic packaging is a major contributor to the environmental impacts associated with the linear plastic production and consumption system due to the prevalence of short-lived single-use plastic (SUP) packaging. Deposit-refund system (DRS), as an alternative policy instrument to Extended Producer Responsibility in waste management, is deemed as a potentially promising way to address the failure of the current plastic waste management and facilitate circular plastic packaging production and consumption for food contact use. In this paper, two DRS scenarios for recycling and reuse respectively are explored, with PET trays for food-grade use in Sweden in focus. Their costs and benefits are investigated relative to the business-as-usual scenario over a 25-year period. Results show that the costs are greater than the benefits for the recycling scenario but not for the reuse scenario and that the benefit-cost ratio (1,67) of the reuse scenario is 2.3 times as high as that (0,73) of the recycling scenario. The distributive analysis reveals major cost drivers such as deposit handling and recycling in the recycling case and deposit handling, dishwashing and packaging in the reuse case and major cost takers such as materials industry and hospitality/supermarkets in both scenarios. However, the results are uncertain, as is indicated by sensitivity analysis. Several parameters with high uncertainty are identified and highlighted for system development and innovation. • Deposit return schemes generate environmental benefits • Costs risk outweighing benefits • Need for system innovation