scheme design version 3 consultation webinar
TRANSCRIPT
SCHEME DESIGN Version 3
CONSULTATION WEBINAR
August 1st, 2019
Welcome & IntroductionsGerry Morvell, BSC Chair
Purpose of the webinar
▪ To work together to solve a real-world problem
▪ To update stakeholder about the proposed design
▪ To apprise new battery stewards about the
proposed design of the scheme
▪ To discuss key design issues/questions and explore
pros and cons
▪ To identify challenges and opportunities for
improvement
Recording
Meeting is being recorded for the purposes of notetaking and will
be deleted once notes are completed
Agenda
Time Topic Lead
10:00 – 10:15 Welcome, introductions, purpose,& agenda GM
10:15 – 10:20 Webinar process and ground rules LC
10:20 – 10:25 ACCC Authorisation process GM
10:25 – 10:30 Review of journey to date and the path forward LC
10:30-10:35 Discussion time: Questions about the journey / process LC & GM & All
10:35 –10:40 Review of research inputs LC
10:40 – 10:45 Discussion time: Questions about research inputs LC & GM & All
10:45 – 11:30
Review of proposed core elements of the scheme design including
structured question time
▪ Levy
▪ Membership fees
▪ Rebate
▪ Integration with other schemes and take bock programs
LC & GM & All
11:30 – 11:45 Discussion: Challenges and opportunities LC & GM & All
11:45 – 12:00 Next steps GM
ACCC: Australian Competition & Consumer Commission
Format
▪ Presentation – general introduction
▪ INPUT – General Discussion
▪ Presentation – specific topics
▪ Pose key questions & capture ideas & input
Slides will be distributed immediately after the webinar
Webinar controls
▪ Keep your self on mute unless speaking
▪ Please raise questions during question time only
▪ Microphone
Ground rules
▪ Stick to the agenda
▪ Be mindful of those new to the discussion
▪ Constructive contributions
▪ How do we make this better?
▪ Solutions orientation
▪ Practice generous listening
▪ Avoid us and them positions
▪ Think outside the box
▪ Imagine the possibilities
Ministers have decided scope
▪ All state and federal environment ministers have:
▪ Endorsed the approach
▪ Agreed that all batteries subject to market failure are in scope
▪ Used Lead Acid Batteries currently not subject
to market failure
▪ Those not covered by other schemes (NTCRS -
embedded batteries)
▪ Industry has identified the primary market failure is
the cost of collection and sorting
▪ Clean sorted material to recyclers gate will
facilitate success
What does ACCC authorisation enable?
▪ Levy on imports
▪ Authorisation allows a levy which would ordinarily
be considered anti-competitive behavior
▪ Member to member agreements
▪ A method of reducing the free rider issue
▪ Passing the levy on to consumers
▪ Importers
▪ Distributers
▪ Retailers
OPTIONS FOR ADDRESSING FREE RIDERS
▪ ACCC Authorised model
▪ Member to member agreements
▪ Regulated scheme
▪ Expensive and difficult to adapt to changing
market realities
▪ Light regulation – e.g. update of the product
stewardship act where industry would:
▪ Implement their own stewardship scheme
▪ Join the BSC scheme
▪ Pay a fee of 4x levy amount if a scheme
exists
Free riders - Key industry concern
ACCC Authorisation process
Consultation Phase1 Refine Design2
Initiators
Commitment3Application to
ACCC4
ACCC Public Consultation Phase5 ACCC
Determination6
ACCC: Australian Competition & Consumer Commission
Why is a scheme needed?
▪ Current recycling rates very low in Australia
▪ 97% of batteries hoarded, dumped or landfilled
▪ Relatively embarrassing level compared to other
OECD countries
OECD: Organisation of Economic Co-operation & Development
Why is a scheme needed?
▪ Projected exponential rise in generation of waste batteries
Myriad of risks
Cost of collection outweighs
value of commodities
Exponential increases in generation of
waste batteries
Precarious nature of
export options
Risks to community health and safety, &
environmental impacts of emissions,
contamination, & loss of resources
Insurance industry increasingly
reluctant to cover recycling
Increasing incidents of fires in
waste disposal infrastructure
Local government not resourced to properly manage EOL batteries
Rapid onset of local and state
regulations will add to cost burden
Product Stewardship Act – current process
Priority Listing
Voluntary
schemes
Co-regulatory
schemes
Mandatory
schemes
Government identifies
problem wastes and adds
them to the priority list
Government sets minimum
outcomes, industry has
some discretion about
approach
Industry encouraged to
establish voluntary
product stewardship
scheme
Government establishes a
mandatory scheme
Government has identified
batteries as a problem waste by
listing it as a priority product
MEMs (all state & federal
environment ministers) have
called for fast-tracking of
battery stewardship
Current Options:
Industry led scheme such as
ACCC model or regulated
option such as NTCRS or similar
Increasing cost and complexity
20
14
–
20
15
Product Stewardship Act - Priority Listing
2014 – 2015 2016 – 2017
20
15
–
20
16
2013 – 2014 2015 – 2016
End of Life
Batteries < 2kgAdded to the priority list
End-of-life
batteries < 5kgAdded to the list
Large Storage
BatteriesAdded to the priority list
End-of-life
batteries < 5kgNo change
The journey to date
2016 - 2017
Financial options studyPacific Environment assessment
of market realities
Pilot projectsPower tool & handheld battery collection
pilots to investigate the feasibility of
collecting handheld/ power tool batteries
for recycling
Stewardship case studiesReview of international and Australian
stewardship approaches for batteries and
other products to identify options
Preliminary regulatory
assessmentTo identify, compare and
prioritise options for battery
stewardship schemes in
Australia
The journey to date
2018
Industry Briefing Agreed to pursue
ACCC model in first
instance or NTCRS as
a last resort
Meeting of Environment
Ministers Focus on batteriesAll state and Federal Environment
Ministers call for fast tracking of
battery stewardship
Battery Stewardship
Council (BSC)Established as an informal
consultation group
Proposed scheme design
Versions 1 & 2 ReleasedConsultation with BSC members
and feedback incorporated
BSC Consultation to understand drivers & identify options for scheme design
Meeting of Environment
Ministers All state and Federal Environment
Ministers endorse approach and a
scope of all batteries not covered
by other schemes, and provides
funding for consultation
The journey to date
Battery Stewardship
Council (BSC)Incorporated as a not for
profit
InitiatorsFormalize support for
ACCC application
Proposed scheme design
Version 3 releasedConsultation with
broader community initiated
Proposed scheme
design finalisedIncorporating
consultation outcomes
2019
We
are
here
BSC Consultation to understand industry reality & identify options for scheme design
Application for
authorisation
submitted to the ACCCACCC evaluation, public
consultation, &
determination
ACCC: Australian Competition & Consumer Commission
Moving from planning to action
2020
Battery Stewardship
Scheme launchManagement system
development & operational
design, accreditation process
established
Members formally
join the BSCAccreditation process
initiated
Collections take off!Member implementation
of collection and sorting
systems
Systems evolutionAdaptation & improvement
in response to on the
ground experience
DISCUSSION TIME:
KEY QUESTIONS
• Are there other people, similar companies to LG chem,
• Clean Energy Council
• Electric Vehicle Council
• Energy storage – will require different collection channels
• What is the intended timing for collections to begin?
• Second half of next year
5 minutes
▪ Questions about the journey to date
Key research inputs to the journey to date
Key outcomes
▪ Scheme Costings
▪ Operational (admin, marketing accreditation)
▪ Collection
▪ Sorting
▪ Identified costs of regulated vs non regulated
schemes
ScenarioNPV of cost to
govt * ($m)
NPV of cost to
industry ($m)
Total
($m)
Option 1.
Shared responsibility$2.7 $14.4 $17.1
Option 2.
Free rider regulation$6.4 $16.5 $22.9
Option 3.
Government
Regulated Program
$17.0 $37.6 $54.6
NVP: Net Present Value
Pilot conclusions
▪ High level of consumer support for power tool recycling programs
▪ Design collection container to ensure weights are below 20kg
▪ Supervise collection bins
▪ Use reverse logistics where possible
▪ Provide an adequate budget for marketing and communications
▪ Education key to avoid contamination issues
▪ Design targeted communications for professional power tool users
Pilot conclusions
▪ Consumers willing to recycle if options are provided
▪ Marketing essential
▪ Consumers are unwilling to tape or bag batteries
prior to drop-off
▪ Importance of selecting collection sites to maximise
recovery rates
▪ Importance of streamlining collection and transport
logistics
▪ Also provided some indication of costings for
collection, sorting & recycling
Pollinate Planet Ark Recycling behaviour consumer survey ( 2016)
▪ “most Australians don’t mind paying a little more
for rechargeable batteries to cover recycling
▪ “Only about 10% of Australians wouldn’t pay
extra”
▪ While willingness to pay drops slightly when talking
about more expensive laptop batteries
▪ 63% of those that are extremely concerned
about the environment would be completely
willing to pay $0.50
Benchmarking
▪ Assessment of Stewardship Case Studies
▪ Preliminary assessment of regulatory options
▪ Industry Briefing with strong interest in ACCC model
▪ Recognition that if ACCC model not successful,
regulated approach using NTCRS would be Plan B
NTCRS: National Television & Computer Recycling SchemeACCC: Australian Competition & Consumer Commission
Channel Characterisation
Conducted by ISF, UTS
▪ Diverse collection points should be pursued
▪ Recommendations for dangerous goods
standards and training
▪ Processing capacity stronger than collection
capacity
▪ A wide range of cost estimates ($2 - $9/kg)
were offered by stakeholders
▪ Need to resolve inconsistent licencing
requirements limiting the use of existing
collection networks in some jurisdictions and
dangerous goods certification
Stocks & Flows - underwayEnvisageWorks in partnership with REC Randell Environmental Consulting, Sustainable Resource Use (SRU) & Marsden Jacob Associates
▪ Market data – projections and value
▪ Imports / usage / end-of-life
▪ Collection rate
▪ Characteristics of the battery recycling sector
▪ Number and location of recyclers by chemistry
▪ Number of employees
▪ Estimated income
▪ Other economic indicators as appropriate
▪ Cost estimate validation
▪ Evaluation of who bears the cost
▪ Current cost to state & local governments
▪ Environmental and health costs to community / government
Call2Recycle Container
▪ PET lined, nested set of 3
▪ Reusable - 3 uses at a minimum
▪ Demonstrated experience of managing risk
▪ BSC entered into a contract with Call2Recycle
▪ Redesign with BSC scheme branding
▪ Identification of Australian manufacturer
▪ Exclusivity agreement for use in Australia
DISCUSSION TIME:
Questions about research to date
5 minutes
Overview of the scheme design
Scheme principles
Circular Economy
Increased competition,
innovation, & efficiency
Transparency &
accountability
Shared responsibility Environmental benefit Fair & Equitable
Focus on
behavioural change
Battery Stewardship – A Shared Responsibility
▪ Support for scaling up e.g. infrastructure funding
▪ Support for research – stocks and flows, best practices
▪ Procurement policies to support scheme
▪ Provision of collection points (if appropriate)
▪ Government regulation, enforcement and harmonization for the recycling sector
▪ Permits & licensing
▪ Import & exports
▪ Health & safety regulations
GOVERNMENT
Essential foundations
BOARD / GOVERNANCE / MONITORING & REVIEW
ACCREDITATION/VERIFICATION
Member 2 Member
Agreements
Not for profit based
on cost recovery
Environmental
benefit
INCREASED COLLECTION & RECYCLING
Proposed initially as
4c/Equivalent Battery
Unit EBU (24 grams)
Proposed initially as $2.50/kg Metro collections
$3.50/kg regionalSORTING $2.00/kg
Leveraging Model
Levy on imports Rebate
The leveraging model is unique and a game changer
▪ Collection and sorting rebates accessible by accredited members
▪ Leverage existing networks
▪ Collectors and sorters self select by becoming accredited members
▪ Graphic provides examples
NTRCS
collections
ULAB
Collections
Local
government
collections
ULAB = Used Lead Acid Batteries (car batteries)
NTCRS = National Television & Computer Recycling Scheme
Mobile Muster
collections
Existing
take-back
programs Schools and
Institutions
Existing retailer
take back
programs
Scrap metal
collectionsProduct stewardship
collections e.g.
Agsafe
Sorting
facility
Schematic – players in the collection process
Collection
point
Logistics
providerProcessorImporter
▪ Power Tools
▪ Handheld batteries
▪ Products with
batteries not
covered by other
schemes
▪ Energy storage
▪ NGOs
▪ Retailers
▪ Government
▪ Schools
▪ Installers
▪ Brands
▪ Institutions
▪ Retailers
▪ Logistics operators
▪ Take back
programs
▪ Partner schemes
▪ Local councils
▪ Retailer depots
▪ Community groups
▪ Private companies
(recyclers)
▪ Onshore processors
Levy Membership fee Membership fee Membership fee
Implement general member & importer specific obligations
Rebate Rebate Infrastructure grantsPotentially rebate via
downstream
Potentially rebate via
downstream
Implement general member & retailer
&/or drop-off facility obligations
Implement general member & logistics provider obligations
Implement general member & sorting
provider obligations
Implement general member & recycler
obligations
Summary Schematic – Battery collection process
Online training
Records of shipments
Health Check
QEH&S control
Collection
pointsImporters
Report imports to independent agency*
Implement import standards (TBD)
Pay levy based on imports
Use scheme branding or co-branding
Provide drop-off service
Audit of import data/obligations
QEH&S: quality, environmental, health, and safety* Sales data / market intel protection
Use scheme branding or co-branding
Pass levy on to the consumer
Use accredited service providersUse accredited service providers
Use approved containers
Summary Schematic – Battery collection process
Deliver to approved downstream
Shipment records/tracking system
Participate in audits
Mass balance
Use approved containers
Participate in audits Participate in audits
Mass balance
Report recovery ratesReport collection rates Report collection rates
Sorting
facility
Logistics
providerProcessor
Provide collection/pick-up service Sort/aggregate batteries Process batteries onshore
QEH&S systems/control
Maintain chain of custody
Use scheme branding / co-branding
Quarterly invoicesQuarterly invoices
GOVERNANCE
Board Inhouse activities
Battery Stewardship – A Shared Responsibility
Branding & marketing
Education & incentives
Accreditation & Audit process
Monitoring & review of performance
Industry Development
Levy, fee, & rebate management
Outsourced activities
Annual Independent Import Reporting
Container design & distribution
Annual Independent Financial audit
Standards development
Research: e.g stocks & flows
BATTERY
STEWARDSHIP COUNCIL
✓ OPERATION OF THE BATTERY
STEWARDSHIP SCHEME
2
Importer
directors
Independent
Chair2
Retail
directors
2
Recycling
chain
directors
2
Emerging
markets
directors
2
independent
directors
BSC members1. ACT Government
2. Adeal
3. Advanced Resources Recycling
4. Australia Post
5. Aust. Battery Recycling Initiative
6. Aust. Industry Group
7. Aust. Information Industry Ass. (Mobile Muster)
8. Aust. Mobile Telecommunications Ass.
9. Aust. Toy Association
10. Aust. NZ Recycling Program (ANZRP)
11. ALDI
12. BatteryRescue
13. BatteryWorld
14. Bicycle Industries Australia
15. Bosch
16. Bunnings
17. Call2Recycle
18. Canon
19. CISCO
20. CESA
21. Clean Energy Council
22. Close the Loop
23. CMA Ecocycle
24. CO2 View
25. Energizer
26. Dodd & Dodd Group
27. Department of Energy & Environment
28. QLD Dept of Environment & Science
29. Enirgi
30. Envirostream
31. Equilibrium
32. Global Renewables
33. Infoactiv
34. Institute for Sustainable Futures
35. Kidsafe
36. Lex Enviro Services
37. Makita
38. MRI
39. MRI E-Cycle Solutions
40. National Retailers Association
41. National Waste and Recycling Industry Council
42. NSW EPA
43. Ocean Batteries
44. Panasonic
45. Officeworks
46. Outdoor Power Equipment Association
47. R&J Batteries
48. RF Industries
49. Positec (Rockwell, Worx)
50. Resourc
51. Stanley Black & Decker (Dewalt)
52. Sims E-Recycling
53. SA EPA
54. Sustainability Victoria
55. Super Retail Group (BCF, Supercheap …)
56. Supercharge Batteries
57. Sydney Harbours Federation Trust
58. Techtronic Industries (Ryobi, Milwaukee, …)
59. Tes-amm
60. TradeTools
61. Visy
62. Western Australian Local Government Association (WALGA)
63. Woolworths
64. Electric Vehicle Council
Integration with other schemes
▪ No double charging of batteries covered by other schemes
▪ Process may vary by scheme
▪ Procedures for the PSO would be negotiated with each PSO
▪ Report of imports – could be reported by importer or PSO
▪ Obligation for imports not covered by the PSO could be
payed by importer or possibly through a PSO
▪ Schemes could be eligible for rebate for batteries not in their
scheme scope
Integration with existing take-back programs
▪ Intent is to recognise not penalize importers who are showing leadership through existing collection programs
▪ Procedures would be negotiated for reporting:
▪ Imports / Collections / Paying levy on the difference
▪ Eligible for rebate via their downstream
▪ For batteries not in their scheme scope
▪ To maintain the integrity of the program and avoid an perception of greenwashing, BSC will still verify
▪ Reported imports
▪ Scheme obligations are consistent
▪ Environment, health and safety▪ Downstream▪ Collection and recovery rates
Costs
55%
23%
2%
3%
3%
2%
6%
7%
Proposed levy
▪ Levy in imports
▪ 4 cents / Equivalent battery Unit (EBU)
▪ EBU - 24 grams
▪ Need to confirm application of the EBU
concept to Energy Storage and EV
▪ Initial discussions indicate it can work well
▪ Question remains as to how to integrate
repurposing in an equitable manner
DISCUSSION TIME:
KEY QUESTIONS
15 minutes
▪ Is the proposed initial rate of the levy of 4c / Equivalent Battery Unit appropriate?
▪ Would there be any advantages or disadvantages to the BSC Board considering a move to two classes of levy based on chemistry type, for example a lower levy for alkaline batteries?
Proposed membership fees
▪ Based on the principle of shared responsibility
▪ Membership fees for non importers
DISCUSSION TIME:
KEY QUESTIONS
10 minutes
▪ Is the proposed membership structure appropriate?
▪ Are the proposed fee levels appropriate?
Proposed rebate▪ Rate of the rebate based on
▪ Financial Options Study
▪ BSC Consultation
▪ Channel Characterisation
▪ Stocks & Flows
▪ BSC cost recovery modeling
▪ Recognition of economies of scale
▪ Subject to annual adjustment by the board
▪ Designed to encourage regional collections
▪ Proposed initial rebate
▪ Collection
▪ Metropolitan - $2.50/kg
▪ Regional - $3.50/kg
▪ Sorting
▪ $2.00/kg
DISCUSSION TIME:
KEY QUESTIONS
15 minutes
▪ Are the initial rebate amounts appropriate?
DISCUSSION TIME:
KEY QUESTIONS
5 minutes
▪ How could the BSC manage the $/kg cap to ensure competition
and innovation? ($2.50 metro and $3.50 regional)
DISCUSSION TIME:
KEY QUESTIONS
5 minutes
▪ How should the BSC respond if collection rates exceed initial
projections?
DISCUSSION TIME:
KEY QUESTIONS
10 minutes
▪ Is metro/ regional rebate differential on target and adequate for
addressing regional divide?
DISCUSSION TIME:
KEY QUESTIONS
5 minutes
▪ Does the proposed funding model provide a good starting point?
DISCUSSION TIME:
KEY QUESTIONS
5 minutes
▪ Have questions about the integration process been resolved?
DISCUSSION TIME:
KEY QUESTIONS
15 minutes
▪ What opportunities & challenges does the scheme present to the
your sector?
Melbourne
▪ August 14th
Upcoming state forums
Sydney
▪ August 15th
Become an initiator
▪ Initiators will become part of the
ACCC application
▪ Demonstrate support for the
proposed scheme design
▪ Initiator form can be
downloaded from the BSC
website resources pageBe part of the solution
Take a deeper dive - resources are available online
▪ Give us a call or provide written feedback
Thank you for your time and generous contributions
Contacts
▪ Libby Chaplin
▪ 0467 515 260
▪ Gerry Morvell
▪ 0408 990 825