Reverse Vending Machine: A goldmine in the future economy
Aijie Li, market research analyst at We Grow Green Tech
“Every single second, 1,000 people open a bottle of water in the U.S.
Each day, people in the U.S. throw away more than 60 million plastic water bottles, most of which end up in landfills or as litter in America’s streets, parks and waterways.
Americans throw away 35 billion empty water bottles a year. Of those, only 12 percent are recycled.” — — Healthy Human
In the last 50 years, plastic production has increased twenty-fold. However, among 78 million tonnes of plastic production, there is only 14% collected for recycling.[1] Compared to the other materials like steel and paper which has around 80% and 50% recycling rates correspondingly, there is significant untapped potential to reuse the plastic resource.
Actually the government has taken actions to reduce the waste of the plastic bottles. A container deposit return scheme(DRS) requires a minimum refundable deposit on beer, soft drink and other beverage containers. When the consumers return the bottle to the store or collection center, the bottle bills will be returned. There are currently 10 states in the United States with the DRS legislation, whose deposit ranges from $0.1-$0.05.
Reverse vending machine acts like the collecting spots bridging the consumers with the recycling center. It would identify the types of the packaging with scanning sensors, sort the containers into different types thus preventing further pollution and then give the consumers correct deposit refund.
How big is the reverse vending machine market?
The application of reverse vending machines succeeds most in the European market.
Two years after Lithuania implemented the scheme using RVMs in 2016, its plastic bottle recycling rate jumped from 33 per cent to 92 per cent. Germany, which put in place the scheme back in 2003, now has a return rate of 96 per cent.
In 2019 the European Parliament passed the Single Use Plastics Directive. The legislation mandates a 90 percent plastic bottle collection target for all member states by 2029, furthermore, all plastic bottles by 2025 must contain at least 25 per cent recycled plastic (rPET)[2]
This indicates that there is a large market opportunity for reverse vending machines. Furthermore, with the increasing awareness of the importance of circular cycling, more and more states claim to launch DRS in the near future.
Since October, DRS has been launched across Western Australia. The “Containers for Change” program allows Western Australians to claim a 10-cent refund when they return eligible beverage containers. Scotland plans to start the DRS with 20p deposit each bottle on 1 July 2022. Meanwhile England and Wales intend to start the scheme no later than 2023.
According to the ABG Sundal Collier calculated it last year, there are around 88.58 million dollars operating profit in the European market alone for Tomra, the industry leader. Considering that Tomra takes up 70% market share in RVMs, therefore, we can assume that the European RVM market would reach 126 million dollars.
Alongside the European market, let’s take a look at the U.S. market. Even though the container deposit law has been launched in the middle of the last century, the overall performance of the bottle recycling rate isn’t that satisfactory when compared to European countries. However, there is a huge gap between the states issued DRS and those states not, which indicates the success of the bottle bill policy. Imagining in the future that the U.S. passes the deposit return policy and sets the target to be 65% recycling rate nationwide. According to 2017 United States National Postconsumer Plastic Bottle Report, the average pounds of plastic bottles per person per year is around 30, in other words, around 600 plastic bottles. The potential of the U.S. RVM market would reach 3.4 billion dollars.
This is a salivating number not only for the RVM companies but also for companies aiming to create a circular model around our plastic bottles consumption and recycling. Cycle Technology Inc [3] is a recycling software solution that utilizes RVMs (Reverse Vending Machines) in order to streamline and optimize the waste collection process through a mobile application that rewards users for recycling.
“Cycle Technology enables and innovates mobile solutions that provide users with social and financial rewards for utilizing Reverse Vending Machines. Cycle is focused on developing versatile rewards solutions for RVMs in both DRS and EPR recycling markets.”, Anwar Khan, CEO and Co-founder.
However, there are a lot of the obstacles in the way of passing deposit return policy in the other states. For example, the resistance from the manufacturers. As RVM market is highly correlated with the support from DRS, the U.S. market is promising but uncertain.
In the end
In a nutshell, the opportunities for the RVM market relies on the deposit return scheme. With the increasing awareness of the importance of circular economy, there might be more countries to take part in the contribution of container recycling.
China implemented its first regulation on domestic waste management on July 1st 2019. The policy ushered in an era of compulsory garbage classification to enhance waste recycling. Full implementation of the new garbage sorting system, focussed primarily on individual household waste, is set to extend to 46 key cities by the end of 2020 with the help of a state investment of 21.3 billion yuan (3.1 billion USD) (China Daily 2019).
Furthermore, RVM market isn’t just limited with the containers sorting and recycling. RVM companies have already take place in the food sorting market, the pesticide package recycling market and so on.
[1] Ellen McArthur Foundation
[3]https://cycletechnology.com/
[4] http://www.bottlebill.org/index.php/current-and-proposed-laws/usa/additional-links
