State Obscures Extent of a Half-Billion-Dollar Surplus of Unredeemed CRV Deposits As Redemption Rate Stays Stuck at 58%, Consumer Watchdog Says

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Feb 09, 2022, 13:39 ET

LOS ANGELES, Feb. 9, 2022 /PRNewswire/ -- The rate at which consumers take bottles and cans for direct deposit refunds stands at 58.8% as of November, keeping California in third to last place among ten bottle deposit states. Meanwhile unredeemed deposits in the state's main beverage fund have swollen well past $500 million, a fact not easily gleamed from reports filed by CalRecycle, the state's recycling regulator.

According to research by the Container Recycling Institute (CRI), in its semi-annual report to the legislature in September 2021, CalRecycle reported a balance in the beverage container fund of $428 million as of June 2021. But just one month later, it reported to the State Controller's Office a balance of $563 million. That statement is signed by the agency's chief accounting officer and certified under penalty of perjury to be true, accurate and complete. The difference of $135 million was unaccounted for.

The undercounting of CRV money hiding in the state's accounts continues in the Governor budget. Based on CalRecycle data, the Governor's budget forecasts $100 million structural deficits for the next two years when-- based on real-time data on beverage sales and container returns--CRI sees only surpluses of at least $100 million for each of those years. CalRecycle has often predicted structural deficits, delivering surpluses instead. The last time there was a structural deficit was in fiscal year 2015/2016.

"CalRecycle has been hiding the fact that its coffers are swelling because it has not done its job of getting consumers their nickel and dime CRV deposits back," said Consumer Watchdog energy project director Liza Tucker. "The state's recycling regulator appears not to want to draw attention to the fact that it now holds a giant surplus in unredeemed deposits because it has been unable to make redemption convenient. That is money that can and should be used to modernize the system and make redeeming bottle deposits as easy as buying beverages in the first place. This should make everyone's blood boil."

Consumers pay about $1.5 billion in nickel and dime deposits annually on bottled water, juices, soda and beer. The lack of redemption options has swollen unredeemed deposits by $254 million in just the last two fiscal years as the system continues to collapse, according to CRI's analysis of CalRecycle data.

The state's container recycling rate—which includes all the bottles and cans that curbside waste haulers scoop up together with the CRV deposits redeemed by consumers (the redemption rate)—stands at 68.6%. Since August 2019, the overall recycling rate has dropped eight percent and the redemption rate has plunged nine percent, a dismal showing, Consumer Watchdog said. Click here for analysis of CalRecycle data: https://consumerwatchdog.org/2021novbcrpmonthlyvolumereportcalrecycle

More than half the state's redemption centers have closed since 2013 due to state underpayments, rocky commodities markets, and later the pandemic. One major blow to the system was the closure of rePlanet, a network of redemption centers, in August 2019—months before COVID-19 struck. Established in 1984, the company operated 600 redemption centers at its height.

"The only way out is major reform in the form of passing SB 38 that forces the beverage industry to be responsible for a higher redemption rate," said Tucker. "We know this works based on the results in the most successful bottle deposit programs in eight other states that make the beverage industry responsible for recycling beverage containers."

SB 38 (D-Wieckowski), an Extended Producer Responsibility bill, would set a high redemption goal and task the beverage industry with reaching it via modernized technologies. Money in the fund now could be used to pay for machines in a transition. The bill passed the Senate and is now in the Assembly where it will be heard later this year.

SOURCE Consumer Watchdog