NSW councils could save up to up to $62 million annually and cut their recycling costs by more than 40 per cent if the state introduces a container deposit scheme (CDS), argues Local Government NSW (LGNSW).

State Environment Minister Rob Stokes will take two proposals to cabinet today for a statewide CDS, where consumers get a 10 cent refund for every bottle or can they return.

One option involves situating ‘reverse vending machines’ at shopping centres and recycling depots and the other, to be funded by the beverage industry, would focus more on increasing recycling bins and running anti-littering campaigns.

If the CDS does go through it is understood that it would take two years to implement.

While the packaging and beverage industries vociferously oppose CDS, arguing it will make drinks more expensive and be too difficult to run, local councils and Local Government NSW have long been advocates of such a scheme, believing it would boost recycling rates, reduce littering and decrease the volume of kerbside recycling collections.

With bottles and cans making up one in three pieces of litter, they are a real pain for councils and can have a significant effect on their bottom lines.

A 2012 LGNSW-commissioned report, “The impacts (cost/benefits) of the introduction of a container deposit/refund system (CDS) on kerbside recycling and councils”, presented a strong case backing a CDS and outlining the potential benefits for councils.

The report found that NSW councils would cut their overall recycling costs by between 19 per cent and 47 per cent, saving between $23 to $62 million annually.

The report also claims that there would be 17 per cent less material in kerbside recycling, which is a relatively expensive service to run, once a scheme kicked in.

Of course, not all rubbish that can go into recycling would be eligible under the CDS – only bottles and cans, and these account for one-fifth of kerbside recyclables.

South Australia introduced a CDS scheme in 1975 and the Northern Territory introduced a similar scheme in December 2011. Recent moves to introduce a CDS into Tasmania and Western Australia failed while Victoria had a short-lived scheme which was rescinded.

The 2012 report said: “Under a CDS and based on South Australia CDS return rates, 82 per cent of NSW eligible CDS material generated at home would be diverted to depots, reducing kerbside recycling by 17 per cent.”

Unredeemed deposits would also be a boon to councils. The report estimates it would increase the commodity value of sorted materials by almost one-third, or $72 per tonne.

The City of Sydney Council began piloting its reverse vending machines in June this year, offering food truck vouchers, a 10 cent donation to charity or the chance to enter a draw to attend the Mayor’s New Year’s Eve celebrations rather than 10 cents.

The LGNSW was a founder member of the Boomerang Alliance in 2006, a  group pushing for a CDS which includes environment groups such as the Total Environment Centre and Clean Up Australia.

The scheme has been controversial within the environmental sector, as well as with industry. The national office of Keep Australia Beautiful (KAB) caused a major stir in February this year when it declared its opposition to a CDS scheme, a stance that its WA office has gone public about not sharing.

KAB, which gets around one-third of its funding from Coca-Cola, has said it backs ‘appropriate strategies to adopt that cover holistic litter reduction’ instead.