NEA to closely monitor beverage prices after bottle return scheme starts in April: Janil Puthucheary

SINGAPORE: Beverage prices will be closely monitored by the National Environment Agency (NEA) after the Beverage Container Return Scheme (BCRS) for plastic bottles and cans begins in April, Senior Minister of State for Sustainability and the Environment Janil Puthucheary told Parliament on 3 February.

He was responding to concerns raised by several MPs over how the scheme could affect drink prices, as well as its impact on smaller producers and importers.

Janil noted that the BCRS had already been debated during the second reading of the Resource Sustainability (Amendment) Bill three years ago and had received support from members.

“I thank members for their interest in the upcoming beverage container return scheme, or BCRS, which will commence on 1 April this year,” he said.

The scheme was first proposed in 2019 by a Recycle Right Citizens Work Group to improve household recycling rates and reduce contamination, he added, noting that those objectives “remain relevant today”.

Packaging waste accounts for about one-third of Singapore’s domestic waste, while overall recycling rates remain low, Janil said.

The BCRS aims to raise recycling rates through an extended producer responsibility (EPR) model and is the second such scheme introduced in Singapore, following the e-waste recycling programme.

Deposit system and industry-led model

Under the scheme, consumers will pay a deposit at the point of purchase to encourage the return of used beverage containers.

“The scheme features a deposit paid at the point of purchase to incentivise customers to return their containers,” Janil said, adding that the goal was to “spark a change in our recycling habits”.

He said Singapore had studied overseas models when designing the scheme, citing Norway, Denmark and Lithuania, where industry-led, not-for-profit systems achieved high collection rates.

As a result, Singapore adopted a similar approach, with BCRS Ltd formed and run by industry stakeholders.

“They are best placed to determine the most effective way to recover used beverage containers, and they are incentivised to operate the scheme efficiently so that the cost impact on producers is manageable,” Janil said.

All regulated containers to carry 10-cent deposit

Addressing cost concerns, Janil said all regulated beverage containers supplied in Singapore would attract a fully refundable 10-cent deposit.

“Consumers will pay this 10 cents at the point of purchase and obtain their refund when they return the containers for recycling,” he said.

Producers will also pay a fee of between three and four cents per container to the scheme operator, which covers collection and recycling logistics and is comparable to charges in other jurisdictions.

Based on NEA’s engagements, producers accounting for about 80 per cent of beverage containers can incorporate the deposit mark and barcode directly into their packaging.

“Beyond the once-off implementation costs, these producers should see costs per container close to the producer fee of three to four cents,” Janil said.

He acknowledged that smaller producers who rely on stickering rather than redesigning packaging may face higher costs, adding: “We appreciate that some producers may find the transition more challenging.”

Support for smaller producers

Janil said NEA and BCRS Ltd have been engaging both large and small producers regularly and have extended the transition period from three to six months following feedback.

“We have also introduced a transition grant of $2,500 to help smaller businesses,” he said, adding that NEA would remain flexible and supportive.

Over time, producers are expected to optimise their processes, he said, noting that beverage pricing remains a commercial decision influenced by demand and competition.

He added that international experience showed deposit return schemes did not have a significant direct impact on beverage prices or sales.

Return points and accessibility

At launch, consumers will be able to return empty plastic and metal beverage containers at more than 1,000 reverse vending machines (RVMs) across Singapore.

These will be located at larger supermarkets and other publicly accessible, high-footfall areas such as HDB void decks and some hawker centres.

“Ninety per cent of residents in HDB housing estates will live within a five-minute walk to one of these return points,” Janil said.

The number of return points is expected to double to 2,000 within the first year. During the initial rollout, return patterns and community feedback will be closely monitored to guide further deployment.

Manpower and consumer protection

Responding to PAP MP Poh Li San’s follow-up on manpower requirements, Janil said RVM operations and reverse logistics are handled by existing waste collection and town council contractors.

“These are not new companies being set up just for this purpose,” he said, adding that collection frequency would be adjusted based on usage.

On consumer protection, Janil said there were “several reasons to have some degree of confidence”, including the experience of more than 50 jurisdictions that have implemented similar schemes.

Competition within the beverage industry would also serve as a check on excessive price increases, he said, noting that producers responsible for 80 per cent of containers have indicated compliance costs of about three to four cents per unit.

“Nevertheless, NEA will be watching the beverage prices after we introduce this scheme and through the transition very, very closely,” he said.

Concerns over queues and machine reliability

Addressing PAP MP Foo Cexiang’s concerns over queues and machine reliability, Janil said the phased rollout was deliberate.

“We are deploying 1,000 in the first instance to learn how best to deploy them, where best to deploy them, and how best to support users,” he said, noting that ambassadors would be stationed at selected locations to assist seniors and other users.

He added that Singapore’s approach also draws on a four-year pilot involving about 50 RVMs, which collected roughly 16 million containers.

Based on these lessons, the Government assessed that far fewer than 15,000 machines would be needed to operate the scheme cost-effectively.

Machine reliability is governed by licensing and contractual requirements, Janil said, with operators required to maintain at least 90 per cent uptime.

Deposit mark, reviews and recycling targets

Responding to PAP MP Joan Pereira, Janil said the $2,500 transition grant was sized to fully cover first-year compliance costs for small producers placing fewer than 50,000 containers on the market annually.

“We are prepared to exercise flexibility and look at further support,” he said, while stressing that the scheme aims to shift part of the recycling responsibility from consumers to producers.

On whether deposit marks could be waived after the transition period, Janil said they would remain necessary as not all beverage containers fall under the scheme.

“A consumer will need to know whether the container they are holding is eligible for the deposit,” he said, adding that non-regulated containers should still be recycled via existing blue bins.

Responding to PAP MP Valerie Lee, Janil said the 10-cent deposit amount could be reviewed over time.

“The quantum of the deposit varies across jurisdictions, and some are significantly higher than what we are starting with,” he said.

He added that Singapore aims to achieve beverage container recycling rates of around 70 to 80 per cent, in line with well-performing overseas schemes.

Affordability concerns and refunds

Addressing WP MP Kenneth Tiong’s questions, Janil said projections of price increases between 25 and 60 cents were based on media reports from a small number of producers.

“Our assessment is that 80 per cent of the market will see an increase of about three to four cents,” he said, while acknowledging that smaller producers may face higher challenges.

On refunds, Janil confirmed that digital options such as EZ-Link and SimplyGo will be available, with more methods to be announced, but said there are currently no plans for cash or cash-voucher refunds.

If prices rise beyond expected levels, he said NEA would monitor market behaviour closely.

“If there is evidence of collusion or profiteering, there are mechanisms for that to be reported and dealt with,” Janil said.

Responding to WP MP Abdul Muhaimin Abdul Malik, Janil said competition and consumer choice would be the main safeguards against excessive price increases.

“We will be monitoring the transition and how this process plays out,” he added.