(P)SGR, face to face with European guarantee-return systems. Similarities, differences and challenges: Ireland and Slovakia vs Romania

• At this moment, Romanians return, daily, a quantity of SGR packaging equal to that consumed by the Irish (5 million SGR packaging);

• In the first two months of implementation the guarantee-return system in Ireland collected 21 million packages.

• Ireland’s returnable packaging market (PET and cans) is estimated at 1.9 billion units annually. 3.5 times lower than the one in Romania, which also includes glass packaging.

• Slovakia, which implemented a return guarantee system in January 2022, reached a return guarantee collection rate of 71% after the first year, exceeding the national target of 60%.

• In its second year of operation, Slovakia again exceeded its target, achieving a collection rate of 92%, compared to 80% when the target was set.

• In just two years of operation, the Slovakian guarantee-return system has succeeded in exceeding the European collection targets for the next six years (77% by 2025, 90% by 2029).

• Implementing the warranty-return system in other countries has not been without its challenges. Analyzing the experience of other countries, in the first months of operation the Warranty – Return System was not perfect, but could be perfected.

• The experience of other states that have implemented such a mechanism shows us similar results in the first months of operation and the same gradual evolution of the program. But all the states that adopted the guarantee-return mechanism reached a collection rate of 80-90% after 2-3 years of operation of the system.

In Romania, the Guarantee-Return System has been operating for 5 months (December 2023 – April 2024). Period during which approximately 1.5 billion SGR packages were placed on the market and approximately 250 million packages were returned (150 million SGR packages – estimated for April 2024). Which means, for Romania, a collection rate of almost 16%, after 5 months of operation of the SGR.

A delegation of the Association of Guarantee-Return Systems from Europe (DRS – The Association of Deposit and Return Systems) organized a working visit to Romania at the end of April, the host of this event being the administrator of the SGR in Romania, the company RetuRO. Representatives from countries such as Denmark, Latvia, the Netherlands, Austria, Hungary, Malta, Ireland and Slovakia shared experiences, discussed best practices and presented implementation strategies to improve warranty-return systems at European level. Although the national specificity gives them a certain uniqueness, all guarantee and return systems encountered challenges in the initial stage of implementation.

Ireland launched the Guarantee-Return System (DRS) in early February this year. The Irish system only includes plastic packaging and aluminum cans, for which consumers pay a guarantee of 15 euro cents (0.75 lei) for containers between 150 ml and 500 ml and 25 euro cents (1.25 lei) for containers between 500 ml and 3 liters.

In the first month of operation, the Irish returned two million packages, but after the second month they reached 21 million packages. The national holiday of St. Patrick, when 2.2 million packages were returned in a single weekend. But also the transition period, which was only 6 weeks for manufacturers (until March 15, 2024) and 4 months for retailers (stock exhaustion until May 31, 2024).

Basically, from 1 June 2024, there will only be guaranteed packaging on the Irish market. In Romania, the period of exhaustion of stocks of products in SGR packaging in stores can be extended from 7 months (June 30, 2024, as it is currently) to 13 months (December 31, 2024 – draft GD under debate).

“A long transition period increases the risk of fraud. It’s why in Ireland we’ve made the decision to have these short transition periods for manufacturers and out-of-stocks for retailers. Around 80% of Irish manufacturers use international barcodes. Re-turn (DRS Ireland administrator) asked manufacturers to switch to national bar codes for Ireland, which most have done. However, around 10% said they wanted to continue using international barcodes, which poses a risk of fraud for products coming from Northern Ireland, which is not part of the return guarantee system. Re-turn has decided to levy a fee on manufacturers “to reduce the impact of fraud” during the period when old stocks are used up during the transition period. A said Ciaran Foley, CEO of Re-turn, the company that runs DRS Ireland.

In Ireland, shops with a sales area of ​​less than 250 square meters may be exempted from organizing return points. But more than 90% of retailers, even many small shops, have already signed up to the system and are receiving packaging returns from consumers. HoReCa operators can choose not to participate in the system, since most packaging is purchased for on-premises consumption. However, there have been complaints that some HoReCa operators (restaurants, pubs, hotels) charge customers the guarantee on the packaging, but do not give them the packaging in order to be able to return it and then recover the paid guarantee.

In its 3 months of operation the Irish returns guarantee system has faced several challenges: consumers experiencing difficulties in using return packaging machines, RVMs not working or full, not printing vouchers due to lack of paper, machines inaccessible to people in wheelchairs, the long journeys to automatic machines or their absence in rural areas. However, many Irish people see the advantages of the system as more important than the disadvantages.

There are currently over 2,200 RVMs in Ireland and over 150 manual return points at approximately 1,400 return locations.

Slovakia introduced a guarantee-return system (DRS) from 1 January 2022 for PET packaging and metal cans. Already in the first year, the 60% target was exceeded, with Slovakia reaching a DRS packaging collection rate of 71%. In its second year of operation, the return guarantee system achieves a collection rate of 92%, compared to a target of 80%. Practically, in just two years, the Slovak DRS system exceeded the European collection targets for the next six years, but also improved the quality of separate waste collection. 70% of the recovered plastic was used to manufacture new packaging.

“The rapid implementation brought a number of challenges. First, retailers were required to purchase automatic return machines (RVMs), install them in stores and prepare them for use. Second, employees had to be trained in the use and maintenance of RVMs, as well as in changing collection accessories, which was not always enthusiastically received.

In addition, it was necessary to change the behavior of consumers regarding the return of packaging. In Slovakia, most people shopped on Friday and returned packaging at the same time, leading to congestion at vending machines and additional pressure on retailers and employees. We recommended that people break up their return schedule and we are now seeing in our statistics that they have changed their behavior and are no longer using the machines only on certain days or time slots.

The highly complex logistics were also a challenge. We have to be ready all the time, because retailers don’t always have enough space to store the packaging. Therefore, efficiency in packaging collection is essential. The more satisfied retailers are, the more willing they are to support DRS,” said Marian Ac CEO of SPRÁVCA ZÁLOHOVÉHO SYSTÉMU – administrator of DRS Slovakia.

There are 3,300 packaging return points in Slovakia, of which 2,400 are RVMs, and about 900 return points do manual collection. Small retailers have manual scanners for DRS packaging. After being collected from the return points, the packages are transported to 5 intermediate warehouses, distributed regionally, where they are compacted for transport and processing. There is only one DRS packaging counting and sorting center in Slovakia.

In Romania, there are currently 4 RetuRO regional centers: in Bonțida (Cluj county), Giarmata (Timiș county), Brașov and Otopeni (Ilfov), which will be inaugurated in mid-May. In the next 3 months, other RetuRO centers will be opened in Bacău, Ploiesti and Dolj. The processing capacity of SGR packaging in Romania is, at the moment, over 2.6 billion packages (including the center in Otopeni).

In Slovakia, approximately 1.16 billion PET bottles and metal cans are placed on the market annually. Romania has a potential of approximately six times greater (7 billion packages).

Analyzing the experience of other countries, in the first months of operation the Warranty – Return System was not perfect, but perfectable, taking on average 10-12 months until the system matures and operates at optimal parameters.

Also, the systems in other states that implemented such a mechanism recorded similar results in the first months of operation and the same gradual evolution of the program as Romania, where there is an exponential growth from month to month. In December 2023, 31,000 packages were collected, in January, 2.2 million, in February we reached over 20 million, and in March approximately 80 million SGR packages returned by consumers, In April, the amount estimated amount of SGR packaging returned by consumers is approximately 150 million.

But one thing is certain. All states that have adopted the guarantee-return mechanism have reached a collection rate of 80-90% after 2-3 years of operation of the system.