In a new exclusive interview, Business Review sat down with Julia Leferman, Beverages Producers Alliance representative and General Director for Brewers of Romania Association, to talk about the implementation of a functional Deposit Return System in Romania and everything there is to know about it, from the impact on Romania’s circular economy to the response of the consumers.
- The Romanian government approved the Deposit Return System. Please tell us more about what this government decision means for the beverage industry and our country’s circular economy.
For us, as representatives of the beverages producers, the Deposit Return System has been a priority from the beginning, constantly supporting its implementation and the adoption of a Government Decision establishing the operating conditions. The aim of the system is to introduce packaging in a circular economy, helping Romania to reach the recovery and recycling targets set at European level under the SUP Directive, which requires to collect 77% of PET placed on the market until 2025, and 90% of them until 2029. It will also help achieve the recycling targets for other types of materials: 75% for glass and 60% metal, until 2030.
The Deposit Return System implementation is essential both for Romania and for companies, being a measure that will help our country to become cleaner, but also to meet its recovery and recycling targets. At the same time, it helps to redirect packaging from the landfill or from nature to recyclers. As part of the beverages industry, we made a commitment to meet all requirements set by Romania’s and European Union’s legislations regarding the obligations we have as part of the Extended Producers’ Responsibility policy. These obligations require us to cover the costs of recovering packaging waste placed on the market, but also to implement measures to stimulate the recycling and reuse of packaging. Thus, DRS becomes a real solution for companies because it contributes to the more efficient recovery of packaging, an aspect that ensures our access to quality recycled material.
- What was the involvement of the Association you represent in supporting the adoption of DRS?
A proof of the importance of the Deposit Return System both for Romania and for companies is the involvement of the beverages industry from the very beginning in building and defining this complex system. The first step taken by the industry was to form the Beverages Producers Alliance. This brings together the Brewers of Romania Association and the Soft Drinks National Association, which together cover approximately 75% of all packaging for DRS purposes. As an alliance, we have been in constant dialogue with the authorities, but also with all involved stakeholders (retailers, recyclers, equipment manufacturers) to define the legislation and the implementation principles of DRS in Romania.
- How does the DRS work and what are its benefits and impact?
The Deposit Return System will operate in Romania according to a series of principles. The consumers will pay a guarantee of 0.50 RON for each drink they buy from a store. After emptying the package, in order to recover the guarantee, the consumers will have to bring it back to one of the return points organized by retailers. The system targets single-use primary packaging: glass, plastic or metal, with volumes between 0.1L and 3L, for both still and sparkling mineral water, soft drinks, beer, cider, wines and alcoholic drinks
In addition to reaching the recovery and recycling targets set at European level under the SUP Directive I’ve already went over earlier, the Deposit Return System will also contribute to environment protection by developing the recycling market so that recyclers have access to quality raw materials they will use further. This way, producers will have easier access to quality rPET, which will help reach the targets of 25% usage of rPET in packaging by 2025 and 30% by 2030.
- Are you satisfied with the recent government decision in its current form, or is there room for improvement?
The adoption of the Government Decision was necessary and was constantly requested by the beverages industry. This is the starting point for the establishment of DRS, an essential system that Romania needs to achieve the recovery and recycling targets I’ve mentioned earlier. The Government Decision comes to build the foundation of this system, it is the first puzzle piece in the operational implementation of DRS. However, there are needed some additional changes in the primary legislation and clarifications in the Government Decision to continue to work on the project.
Firstly, we need a series of supplementary modifications in the primary legislation as soon as possible because the implementation of the Deposit Return System in Romania needs a full legislative framework. This must include changes in the environmental legislation and clarifications in the tax legislation regarding the tax regime applicable to the deposit amount, as well as the definition of tertiary legislation (through an order of the Ministry), which will include the licensing conditions for the Deposit Return System’s operator and the methodology for calculating the tariff paid to retailers and the tariff charged to the beverages industry.
Secondly, we also need clarifications regarding the Government Decision recently adopted. The most important is the re-evaluation of the implementation timeframe. It is necessary to be extended from the current 6-months timing to minimum 18 months, estimated by the industry in all our proposals. Then, we need to clarify the roles in the model proposed by the Ministry for DRS administrator’s shareholding (maximum 75% shares held by producers’ representatives, maximum 25% shares held by retailers’ representatives and 20% shares held by Romanian state). Romania will have the first DRS hybrid model in Europe, and we need to understand, from the beginning, the role that the Romanian state will have within the system, which we hope to clarify in the following period with the authorities.
- How soon can Romania implement a fully-working Deposit Return System?
Currently, the Government Decision provides a period of 90 days to set the company that will operate the Deposit Return System. This time started at the beginning of October when the Decision was adopted. During this time, we need to set up the company, the business plan and all necessary documents in order to apply for the license that will be granted by Ministry of Environment. After these 3 months, the Ministry has another 2 months to evaluate all applications and decide which is the company that will receive the operational license. If there won’t be any appeals, the company that will operate the DRS system will receive the license in March 2022, the soonest. Only after this, the DRS administrator can start the operational activities to implement the infrastructure. Now, the Government Decision sets a 6-months timeframe which is not realistic considering all activities that must be set, at a national level. As mentioned before, we estimated a minimum of 18 months, up to 24 months. The DRS system is a very complex project, and we need to be sure that when is launched, the system is functional for every customer around the country.
Therefore, a fully working DRS system needs to take into consideration some very important and complex activities. Firstly, after the operating license is granted, the administrator will have to make a request of funding, we estimate it at approximately 100 million euro. Then, the company will have to implement its administrative procedure, sign around 80,000 contracts with retailers and over 4,000 with beverages producers and importers, develop and implement the IT system, a very important and complex piece, which will ensure the packaging register and its implementation, order and install the RVMs that have a delivery time which starts from a few months to even a year due to limited stocks, as well as the construction of counting centers, organized by the DRS administrator and return points where consumers will bring back the empty packaging, organized by retailers.
- How do you think consumers will react to the DRS and what is their awareness level towards this issue?
In a study conducted by the Beverages Alliance Producers through Kantar Romania, we had some important insights on this matter. Romanians consider that the implementation of the Deposit Return System in Romania will lead to more responsible habits regarding the recycling of plastic, glass, or metal packaging. 9 out of 10 consumers stated they agree with the system implementation as a solution for raising awareness of the fact that each person has a responsibility in protecting the environment and keeping it clean.