Where Do Uncollected Bottle Deposits Go?

BARRY ASKED THE QUESTION: While I was drinking a bottle of water, I noticed it said “CA, MI, OR, HI, 5 cents.” I know this means that the price includes a 5-cent return deposit, but there’s no chance I’ll return it to that store (it will go in the recycle bin). So, what happens to that 5 cents the store collected? Since it’s only in certain states, is there a fund that is used to collect and recycle? Or is this just extra profit for the bottler, distributor or store?

WE FOUND THE ANSWER: Before diving into where the money goes, let’s review what a bottle bill (also known as  beverage container deposit legislation) actually is.

Bottle bills allow consumers to pay an extra charge when purchasing beverage containers. This charge is then totally or partially refunded when the container is recycled at a certified redemption center. Since recycling is mandated on a state level, bottles bills can be used as an incentive for recycling.

But do they work? According to the Container Recycling Institute, they’re highly successful as states with bottle bills have a beverage container recycling rate of around 60 percent, while non-deposit states only reach about 24 percent.

READ: Does Your State Have a Bottle Bill?

Now, to answer Barry’s question on where those uncollected deposits go. It actually depends on where you live as each state has a different “formula.” In some states, that money goes into the local recycling programs, while other states share the funds with the distributors.

We contacted the Container Recycling Institute, which advocates in favor of bottle bills, to get a better state-by-state explanation. According to Executive Director Susan Collins:

“In California and Hawaii, there is a special fund that is maintained by the state that pays for all beverage container recycling, so “unredeemed” or “abandoned” deposits are used to pay for recycling of all of the containers that do get turned in. And in California, a great deal of that money — over $100 million per year — funds the curbside recycling programs in the State. In Iowa, Vermont, Maine and Oregon, the unclaimed deposits are retained by the beverage distributors, but those distributors pay for the recycling of the bottles and cans that are redeemed. And in New York, Connecticut, Massachusetts, and Michigan, the unclaimed deposits are either retained by the state governments or shared between the states and the distributors.”

Currently, 10 states (and Guam) have bottles bills, and more are in the works. While bottle bills are often touted as saviors of recycling rates, they come with their own batch of criticism. In fact, Delaware dropped its bottle bill last year. The 5-cent deposit was replaced with a 4-cent fee that the state says will help expand recycling programs.

Question by Barry Monheit, Earth911’s CEO

Written by Amanda Wills, Managing Editor

From Earth911