Michigan bottle return rate fell after pandemic ban. Would price hike help?

• Michigan was a U.S. leader in bottle and can redemption in 2019, with a nearly 90 percent return rate 
• That rate dived to 73 percent in 2020, after the state temporarily banned bottle deposit returns in response to COVID  
• Proponents and critics of the 45-year-old bottle law say changes may be needed

A temporary ban on returning bottles and cans for deposits early in the pandemic may have caused long-lasting changes to the recycling habits of Michigan residents. 

Michigan’s return rate on bottles and cans, which stood at nearly 89 percent before the pandemic, has plummeted below 76 percent.

That’s worrying environmentalists and businesses, including recycling companies that rely on a steady stream of aluminum and glass. And it’s fueled a renewed debate about whether Michigan’s once-revered bottle bill is due for an update.

Related:

• Michigan may get through COVID-induced bottle backlog sooner than expected
• Beverage companies want cut of Michigan bottle bill windfall during COVID
• Michiganders passed up $108 million in bottle deposits amid COVID closures

Environmental proponents of Michigan’s 45-year-old bottle law say 10 cents may no longer be enough to encourage people to make store returns. It may be time for an increase, said Conan Smith, president and CEO of the  Michigan Environmental Council, though he called that “sort of a last resort.”

“I’d really like to put my faith in Michigan people first,” Smith told Bridge Michigan.

Officials with Schupan Recycling, Michigan’s largest independent beverage container recycler, said its machines are built to handle a high volume of cans and bottles, but with fewer recyclable goods it becomes more difficult to efficiently run the business.

“You’re really losing out, so it becomes very hard to make money out of it,” said Shayna Barry, Schupan’s director of governmental affairs & strategic partnerships. “When you have low volume, each can becomes exponentially more (expensive) to pick up from the grocery store, (put) in a truck and bring back to an expensive facility.”

Tom Emmerich, chief operating officer for Schupan, said the pandemic shutdown had “an unintended consequence” of permanently changing Michiganders’ recycling habits.

Once a bottle and can return leader in the country, Michigan’s return rate was already dropping before the pandemic. But it took a huge hit in March 2020, when COVID-19 first hit Michigan, when Gov. Gretchen Whitmer temporarily suspended the collection of returnable beverage containers to curb the spread of the virus. 

Other states gave retailers the option to accept or decline recyclables, said Susan Collins, president of the Container Recycling Institute, a California nonprofit that works to improve the country’s recycling practices.

Collins said Michigan was the only state where the available depositors were completely shut down.

According to Michigan’s Department of Environment, Great Lakes, and Energy (EGLE), that led to an immediate dip of 15.7 percentage points in container return rates between 2019 and 2020. The second closest was Oregon with a 9 percentage point drop, said Collins.

The unclaimed deposit money is split two ways: 75 percent to a state fund that cleans up environmental contamination, and 25 percent is kept by retailers

In 1990, Michigan’s redemption rate was at 98.2 percent, leaving $5.4 million in unclaimed deposits, said Jeff Johnston, an EGLE spokesperson. Last year’s redemption rate, which stood at 75.6 percent, left more than $97 million in unclaimed deposits, and meant far less material returned for recycling, the equivalent of 600 million cans, according to the environmental council. 

When voters approved Michigan’s 1978 bottle bill, the 10-cent deposit that was meant to encourage recycling of beverage containers was considered cutting edge. But today, both proponents and foes of the bill are calling for change.

That includes beverage distributors. They are responsible for collecting bottles and cans from retailers and cleaning and shipping recyclables to be processed into new goods. They say they have struggled to keep up the process and receive no funding to support those efforts.

Even though fewer people return bottles for deposits, beverage companies say they are still investing in the same amount of equipment, staff and trucks to process returns, said Spencer Nevins, president of Michigan Beer & Wine Wholesalers Association, an industry group.

Nevins said distributors deserve a cut of unclaimed deposits to cover their role in the recycling system.

Smith, of the environmental council, argues that distributors and retailers can build extra costs into the price of the beverages, so as bottle sales go up, the funding for distributors and retailers can increase as well.

Smith said he opposes giving businesses a portion of unclaimed deposits because as “government and industry get more money, the worse the system works.”

Recycling advocates say the biggest factor in Michigan’s lagging return rate may be the law’s restrictions on returns: the state only accepts aluminum cans and plastic soda bottles for redemption.

In states including Oregon, California and Hawaii, 88 percent of all beverages sold are covered by deposit, including water bottles, hard seltzers, kombucha and more, while Michigan’s law only covers 55 percent of beverages, said Collins of the Container Recycling Institute, forcing residents to put the remaining beverage containers in curbside recycling, or the trash.

It's unclear what percentage of unredeemed bottles and cans in Michigan end up in the trash, but statistics from California aren't promising. There, residents have broad access to curbside recycling, but very few of the beverage containers not redeemed for deposits end up in them. 

In Michigan, more than 4-in-10 people don’t even have curbside recycling access, making it far less likely they will recycle what isn’t returned to the store.

If there’s a bright side, the state’s redemption numbers have slowly crept up each year since 2020. Michigan is one of 10 states with so-called bottle bills, and they have an outsized influence on recycling efforts. The 10 states with bottle laws account for more than half the country’s recycled cans, said Emmerich, the Schupan COO. 

That, said Collins, means “the worst bottle bill is way better” than having no bill at all.