This presentation was given at IEEP's capacity building for environmental tax reform conference on 5 October 2017 in Brussels, Belgium. Speaker: Pasi Nurminen (PALPA)

1. 1,7 billion environmental
acts a year

2. The Finns are the best
beverage package
returners in the world
Return rate of beverage
packages is more than
90%

3. Return rates %
0
20
40
60
80
100
96 98 00 02 04 06 08 10 12 14 16
Can PET OWG
All packages in the DRS have quickly gained a high return rate

4. Factors of high return rates
Correct deposit
values
Wide
coverage
of deposit
packages
Learned return
habit
Environmental
awareness
Wide consumer
collection network
Location of consumer
collection points
Well functioning
RVMs

5. 1500New packages (SKUs)
inspected and approved
1.7 Bn
Returned deposit
packages
300 M
€ worth of deposits
credited
17 600Metric tons of UBC
aluminium recycled
PALPA in 2016
12 700Metric tons of PET-bottle
bales recycled
51 000Metric tons of glass
recycled
5000Retail collection
locations for consumers
9000Collection locations in
hotels, restaurants,
catering (HoReCa)
4 000Reverse vending
machines (RVM)

6. Operating network
• PALPA’s strategy is to run the
recycling system by a network
of companies
• Operating with a network allows
flexibility and scalability
• Most operations are outsourced

7. Majority of recycling system costs is
related to handling and logistics
Challenge:
• Wide consumer collection network is one of major factors
in reaching high return rates
• The low population density in Finland increases the cost
of transportation
Solutions:
• Baling and counting operations have been decentralized
to several locations in Finland
• Material is compacted and sorted as early as possible
after the collection
• Operations have been outsourced to waste management
companies

8. Taxation affects packaging choices
The change in package taxation during 2005-2008 caused considerable
growth of one-way packages in the Finnish market
0
200,000
400,000
600,000
800,000
1,000,000
1,200,000
1,400,000
1,600,000
1,800,000
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
Can PET-bottle One way glass bottle
PALPA: returned deposit packages
1996–2016 (1000 units)

9. Taxation as an incentive
• Packaging tax for certain beverages
– Importers and producers have to pay a packaging tax of 0.51 € / ltr
for packages in customs tariff group CN 22
– Importer or producer is allowed to a tax exempt if the company and
the products are registered in a deposit recycling system
• Deposit recycling systems are approved and controlled by
Environmental Authority under Ministry of Environment

10. Legislation
Finland
• Joining a deposit recycling system is not mandatory for
producers / importers
• Any retail outlet selling deposit packages is obliged to take
back empties
• The only exception is the volume in relation to sales

11. Legislation
Sweden
• Joining a deposit recycling system is mandatory for
producers / importers
• Retail outlets selling deposit packages are not obliged to
take back empties

12. Legislation
Norway
• Recycling rates
define the amount
of the package tax
• The higher the
return rate, the
lower the tax

13. 50%50%
Shareholders
PALPA
Beverage
industry
Retailers
Common decision making
between trade and industry
makes implementation easier

14. Financing the recycling systems
• Recycling system revenues come mainly from material
sales and recycling fees
• Recycling fees are paid by beverage producers and
importers
• All the fees and compensations are decided by PALPA
board of directors (representatives of trade and industry)
– All the fees are based on real costs.
– All the recycling systems have their separate P&Ls and their
own pricing. No cross subvention between the systems is
allowed.
– All the fees and compensations are the same for companies
selling, collecting or transporting similar packages
€

15. Stakeholders
Producers
and
importers
PALPA Consumers
Retailers HoReCa
Recyclers
Handling
plants
RVM
producers
Advertisement
agencies
Package
material
producers
Transport
companies
CustomsMinistry of
Environment
IT system
Service provider
Communication
agencies
Environmental
Authorities
Law offices
Wholesalers
Sticker
producers
Retailer and
producer
associations
EPR
organizations
Competition and
consumer
authority
Credit providers
Media
Environmental
register of
packages

16. Co-operation with Palpa
Producers and
importers
Retailers and
HoReCa
Baling / counting
operators
Transporting
companies
Recycling
companies
Bring packages to the market. Palpa charges the deposits and recycling fees
Act as collection points and receive a handling fee from Palpa
Transport the collected packages and receive a transportation fee from Palpa
Bale packages and count manual returns (no RVM). Palpa pays for this service
Recycle the material, of which Palpa receives revenues

17. Short summary of PALPA
Suomen Palautuspakkaus Oy (PALPA) administrates and
develops three deposit beverage package recycling systems
• PALPA does not own any part of the recycling system or does not have
any ownership within system operators. Most operations are outsourced.
By joining in a recycling system the beverage producers and
importers can get an exempt from package tax
• The Recycling system costs are covered with recycling fees paid by
producers and importers. PALPA is a non-profit company.
Recycling systems operated by PALPA collect annually
approximately 1.7 Billion packages and 80 000 tons of material
• Return rates are the best in the world, over 90 %
• All the packages are recycled into new packages or raw materials for
other industries
1
2
3

18. 1,7 billion environmental
acts a year

19. Support material

20. Material flow
Beverage
producer /
importer
Retailer /
Return location
Transport
operator
Baling and
counting
plant
Material
recycler
Consumer
7
New packages made of recycled
material are manufactured
6Baled material is
delivered to material
recycler
5
Packages are transported
to baling and counting plant
1
Products are sold to stores
2
Consumer buys
the product
3
Consumer returns
the package
4
Transport operator
collects the packages

21. Deposit flow
Beverage
producer /
importer
Retailer /
Return location
Transport
operator
Baling and
counting
plant
Material
recycler
Consumer
Importers and producers pay the
deposit to PALPA
Retailer pays the deposit
within the product price
Consumer pays the
deposit
The deposit is
returned to consumer
The deposit is credited to
the retailer by PALPAPALPA gets the
information of returned
packages from retail
location (RVM), transport
operator and counting
plant
€
€
€
€
€
Money (deposit)
Data
€
i
i
i
ii

22. Other fees and compensations
Beverage
producer /
importer
Retailer /
Return location
Transport
operator
Baling and
counting
plant
Material
recycler
Consumer
Beverage importers / producers
pay a recycling fee to cover the
rest of the recycling system costs
PALPA pays a transportation fee for
each transportation unit collected from
the return location
Material recycler
pays for the
recycled material
PALPA pays for
baling and
counting service
PALPA pays a handling fee to
the retailer for each package
collected from consumers
€ i€
€
€
€€
i
ii
€
€ €
€
Money (other
compensation)
Data
Money (deposit)€
i
€