Who Will Pay to Recycle Product Packaging? You

Bill designed to reduce packaging waste and to encourage repeated use of packaging materials will probably have manufacturers pass the increase in costs on to the consumer.

Manufacturers and importers are not yet fully aware of the impact of a proposed packaging recycling law, but there is one thing of which the people can rest assured: The cost will be passed on to consumers.

recycle bins

A senior executive in the food and beverage industry acknowledged as much to TheMarker. "Every increase in costs is always passed on to the consumer," he said.

But he added that in this case, the cost is not that significant, so he does not foresee major increases in retail prices as a result.

The proposed law makes manufacturers and importers responsible for collecting and recycling packaging, whose full cost they will have to bear. The measure was approved by the Knesset Economic Affairs Committee this week and will be put to a vote by the full Knesset at the beginning of next year.

The bill is designed to reduce packaging waste and to encourage repeated use of packaging materials. The Environmental Protection Ministry estimates that about a million tons of packaging waste is produced in Israel every year, which is a shame: it could be used as a raw material for more production.

The legislative proposal also would obligate local authorities to handle wet and dry garbage separately. The Environmental Protection Ministry will fund infrastructure for the switch at local authorities and invest NIS 400 million in waste separation.

Of the 6 million tons of garbage produced in Israel annually, most is produced by households. Only about one-quarter of the garbage produced currently undergoes recycling.

Under the proposed law, manufacturers and importers will by 2015 be required to recycle 60% of product packaging by weight. The bill also provides for annual recycling targets based on the type of material contained in the packaging.

Violators will be slapped with fines of NIS 2,500 per ton of packaging waste that is not dealt with as required by law.

"From our experience, after a law is passed, manufacturers and importers form a single entity to address the issue," said Nehama Ronen, chairman of the ELA recycling corporation, which is responsible for recycling drink bottles in Israel.

"In practice, the manufacturers pay that corporation a fee per package they sell, and the companies will also have to pay no small amount and ensure that someone representing them sends reports to the corporation," she said.

Some manufacturers have already begun gearing up for the change in the law.

"We have come out with new packaging and seen to it that it is recyclable, meaning that it doesn't have adhesive labels and the writing is printed directly on the packaging," said Gil Segev, vice president for marketing at Gad Dairy.

He said it wasn't clear if the cost of meeting the new standards would be passed on to consumers, but said this is what happened concerning drink bottle recycling.