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In states that pay bottle deposits, private redemption centers are struggling

A person recycles a glass beverage bottle at an automated reclamation machine
Don Ryan
A person recycles a glass beverage bottle at an automated sorting machine. Many private recycling redemption centers are struggling with rising costs and stagnant reimbursement rates.

Legislation in Maine would mimic Oregon’s system of giving a recycling cooperative unclaimed deposits. California is mulling changes as well.

WEST BATH, Maine — On a recent morning, Tricia Rines, a redemption center worker in the small town of West Bath, Maine, expertly tossed dozens of different plastic returnable bottles into separate bins at her facility, seemingly flipping them into the correct containers by muscle memory. Soda here, sports drink there, water over to the side.

While Rines’ sorting work may look routine, maintaining a redemption center as a prosperous business is not. Ten states have redeemable bottle programs, allowing residents to collect coins in exchange for turning in plastic and glass bottles and cans to be recycled.

But redemption centers are private businesses and often have trouble making ends meet. Many states report that redemption centers are closing down, and legislatures are coming under pressure to help the struggling industry and programs, touted as a consumer-friendly inducement to recycling.

In the 10 states with programs, all consumers pay a small deposit on each item that comes in a redeemable bottle or can (the amount of the deposits and specific eligible containers vary by state). Then, they can get their deposit back by bringing them to a redemption center or automatic sorting machine. The redemption centers in turn get a premium set by the state for each bottle they hand over to distributors for recycling.

But in most of the states, the premiums paid to redemption centers haven’t kept up with costs, causing many centers to close. In Maine, at least 40 redemption centers have gone out of business since 2020, local media reported, and the situation is mirrored in the other states.

In response, Maine enacted a law that increased the current 4.5-cent deposit fee to 5.5 cents in May; it will go up to 6 cents in September of this year. That doesn’t solve all of the redemption problems — centers still have to fill up massive containers of specific types of bottles before distributors will collect them — but it helps.

“You sit on so many bottles because you can’t mix ’em with the others,” said Rines’ co-worker and husband, Stephen Rines, speaking from behind the small cash register from which he hands out payments to customers — a nickel for a soda or water bottle, 15 cents for wine and larger bottles.

In New York, the governor and legislature are under pressure to follow Maine’s lead and increase the processing fees, but so far have not acted.

Redemption centers have shut down there too. More than half of the redemption centers in New York state have closed since 2008, the Times Union in Albany has reported.

A bill is moving in California that would add some larger bottles, such as those containing juices, to the eligible list for recycling and recalculate the processing fee formula, which would likely increase payments to distributors.

Stephen Rines, manager of the West Bath Redemption Center in West Bath, Maine, holds up a bag of assorted bottles and cans before starting to sort them into bins.
Elaine S. Povich
Stephen Rines, manager of the West Bath Redemption Center in West Bath, Maine, holds up a bag of assorted bottles and cans before starting to sort them into bins.

Legislative action

Oregon's 1971 "Bottle Bill" was the first redemption law in the nation, seen as a way to get litter off the highways and vacant lots. There’s been just a trickle of other states that have adopted the laws since then. Bills in Congress to nationalize the redemption programs have gone nowhere over the years.

But in 2023 there has been “twice as much activity” as in the recent past, according to Susan Collins, president of the Container Recycling Institute, a research and advocacy group that promotes redemption and recycling. This year, bills have been considered in Illinois, Maryland, Minnesota, Pennsylvania, Rhode Island, Texas and Washington, in addition to the legislation such as that in Maine and California to modify existing programs. None of the new programs has been enacted, though Rhode Island lawmakers did approve a study.

Collins’ group has been deeply involved in the California legislation, hoping that changing the processing fee formula will help keep more redemption centers in business and keep more recycling going. Since the pandemic, redemption rates, which were upward of 80% in some states, have dropped. That’s partly due to fewer redemption centers, she said.

“When the redemption center goes out of business, it creates a ‘redemption desert,’” she said in an interview. And a lot of states paused their redemption programs during the COVID-19 pandemic; when they restarted, fewer consumers were in the habit of returning their bottles and cans.

What’s more, she said, some stores in states where they are allowed to redeem bottles and cans have shirked their responsibility to take redemptions, despite the fact that the law requires it.

In addition, inflation has made getting a nickel or a dime for a bottle oftentimes not worth it, she said. “Five cents isn’t what it used to be.”

Her group is calling for increasing all deposit rates to at least 10 cents, as it is in some states. Connecticut, for example is going to a dime in January, and Oregon and Michigan are already there. Like Maine, some have different deposits depending on the size of the container.

In California, the Assembly’s Natural Resources Committee unanimously voted for a bill late Monday that would add fruit juice containers of more than 46 ounces and vegetable juice containers larger than 16 ounces to the redemption program. The measure also would increase the potential profits for processors through a modified payment formula. It is awaiting action by the full Assembly.

“Our goal with this bill is to increase recycling in California,” said state Sen. Bill Dodd, the Democrat who sponsored the bill. “We estimate it will add approximately 200 million additional plastic, glass and metal containers to our recycling system.”

The largest trade group representing bottling companies, the American Beverage Association, has opposed some of the bills, has gone along with others, and in general calls for more streamlining of the redemption process to avoid multiple pickups of different bottles and cans.

In Maine, for example, the Maine Beverage Association is backing a new bill that would formulate a consortium of processing companies to handle the redemptions. The group also calls for funds from unclaimed deposits to go to the beverage distributors, rather than to the state.

Five cents isn’t what it used to be.
Susan Collins, Container Recycling Institute

In some states, the government gets to keep the unclaimed deposit funds, which vary widely but can be many millions of dollars annually. In other states, the unclaimed deposit funds are split, and in still other states, the distributors get the money, which they can use to fund the redemption system. Without the state money, the distributors either have to charge more for their products or take the profit hit.

In a statement emailed to Stateline, the American Beverage Association said it has opposed some of the state bills on the basis that they perpetuate existing “antiquated, inefficient systems.” The trade group favors centrally managed, modern redemption systems that coordinate the efforts of redemption centers and distributors.

In addition, the group favors dedicating unclaimed deposit money to the redemption system, rather than redirecting some or all of it for other state programs.

Newell Augur, head of the Maine chapter of the beverage group, said distributors have to adjust their prices to cover what the state reimbursement doesn’t.

“The people of the state of Maine are paying handling fees in excess of $50 million a year” either in higher prices or by not collecting their deposits, he said.

In California and Hawaii, 100% of the unclaimed deposits goes to the state, according to the Container Recycling Institute.

Augur is backing another piece of legislation in Maine that would mimic Oregon’s system.

“The system in Oregon is distributor run, and I think it reduces a lot of the inefficiencies that plague the system in Maine,” he said.

All of the controversy matters little to West Bath Redemption Center customers such as Linda Cunningham, 66, who lives in nearby Bath. On a recent day, she brought in a trash bag bulging with a variety of bottles, to do her part for the environment and get a little change in the bargain.

“They re-melt it and use it again,” Cunningham said. “It’s the right thing to do. We don’t need all those landfills fillin’ up.”

Stateline and Oregon Capital Chronicle are part of States Newsroom, a network of news bureaus supported by grants and a coalition of donors as a 501c(3) public charity. Stateline maintains editorial independence. Contact Editor Scott Greenberger for questions: info@stateline.org. Follow Stateline on Facebook and Twitter.