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Californians are losing hundreds of millions of dollars in recycling deposits

FILE - In this July 5, 2016 file photo, cans and plastic bottles brought in for recycling are seen a
It’s increasingly difficult to find places in California to recycle bottles and cans and recoup the 5-cent deposit.
(Rich Pedroncelli / Associated Press)

California consumers lost out on at least $308 million in 5-cent deposits on cans and bottles in 2018, largely because it’s increasingly difficult to find a place to recycle them, according to a new report.

In the last five years, about 40% of California’s recycling centers have closed, with more than 100 closing in Los Angeles County alone. The state says 1,600 centers remain open statewide, but the advocacy group Consumer Watchdog’s report, made public Thursday, said that there are still barriers to Californians finding a place to recycle, and many grocery stores won’t take back the empties.

The group’s report suggests several reforms to California’s 33-year-old recycling program, which has struggled to be profitable. State Sen. Henry Stern (D-Canoga Park) has also proposed changes to the program.

“Californians plunk down a nickel for their cans, but increasingly they’re only getting half that nickel back on average,” said Jamie Court, Consumer Watchdog’s president. “Consumers are losing. The environment is losing.”

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The organization faults state regulators for lax oversight, saying they should more aggressively fine major retailers that won’t redeem containers or that undercount the number of deposits they collect. It says the California Department of Resources Recycling and Recovery, known as CalRecycle, should spend more money to promote recycling centers and punish companies that hoard deposits.

“Overall, the program has been highly successful, but recent years have brought challenges,” CalRecycle spokesman Mark Oldfield responded, citing broader market conditions. He said the agency is looking for ways to help increase buyback locations but put the amount of unredeemed deposits at $272 million. The consumer group says that figure leaves out administrative fees required by law that bring the total to $308 million.

The consumer group’s report recommends doubling the deposits to 10 cents for each glass or plastic bottle or aluminum can to encourage more consumers to recycle, similar to the deposits required in Oregon and Michigan.

Consumers in those states recycle at least nine of every 10 containers. About three in four containers are recycled in California, but that includes those redeemed by bulk haulers as well as individual consumers. California currently charges a deposit of 5 cents for containers smaller than 24 ounces and 10 cents for larger containers.

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Beyond the $308 million in unclaimed deposits, the group alleges consumers are missing out on an additional hundreds of millions of dollars, including $200 million in deposits that go to commercial trash haulers and bulk collectors.

It also cites a 2014 report from the Container Recycling Institute that shows an undercount in bottle deposits paid by consumers. Oldfield said that number has never been substantiated.

On the legislative side, Stern’s bill would restrict which retailers must accept containers and allow about $3 million in annual incentives to low-volume recycling centers to try to keep them open. A similar bill passed last year, but then-Gov. Jerry Brown vetoed it.

Stern said he is trying to help smaller “mom-and-pop” grocery stores while restoring some incentives for recyclers.

“A lot more work has to be done in this area, and I’m hoping to work with consumer advocates to make sure people are getting a fair shake here,” Stern said.

Court said he hopes Stern’s bill is a starting point for negotiations.

“It’s not an overhaul of the system. It in fact creates more exemptions for the grocery stores, which is bad,” Court said. “It does a couple things, but it doesn’t go far enough.”

Stern said the system needs improvements before consumers are asked to make larger deposits. Although Democrats have two-thirds majorities in both legislative chambers, Stern said they are cautious about raising fees, even though in theory consumers would get their higher deposits back when they recycle.

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“But if we can make a case that there’s a good market rationale, I’m open,” he said.

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