SPECIAL REPORT: RecycleBank set for the UK?

Prior to London Mayor Boris Johnson name-checking the company soon after his election and shadow chancellor George Osborne espousing its virtues, few had heard of American recycling programme RecycleBank. Now the company, which rewards those that recycle rather than punishing those that don't, is being mentioned as the scheme that could aid the capital as it strives to increase recycling and diversion rates.

Across the Atlantic, the scheme is being praised as a success despite only being available to around 500 cities in nine, mainly East Coast, states, with figures on active participants varying from 130,000 -300,000. However, areas that have adopted the scheme have seen their recycling rates rise sharply, with RecycleBank claiming that participating municipalities are regularly registering healthy 40% recycling rates.

Although some cities started with very low rates, such as Wilmington having a paltry 9%, the fledgling company has achieved these leaps in figures by offering tangible incentives to participants. People who sign up to the scheme get rewarded with money off on products they will regularly buy, thanks to corporate participation from companies such as Coca-Cola, Ikea, Starbucks and supermarkets.

The theme is somewhat similar to loyalty or club cards, with residents' recycling being weighed by the collection truck and every pound of waste then rewarded with 2.5 RecycleBank ‘points'. At the end of the month, the participant receives their points in the form of coupons and discounts, which have a maximum total value of $40 (£25), and they can then use them with any of the participating companies.

UK

Having seen plans for incentive schemes touted for many years in the UK, the application of the RecycleBank model to Britain does not seem that unrealistic, however, questions remain over how a scheme trialled in smaller, suburban areas could work in a large urban environment such as London.

Speaking to letsrecycle.com, CEO and founder of RecycleBank, Ron Gonen, said: “I think that the UK and most EU countries possess great potential for RecycleBank because we built the business on diverting waste from landfill and there's not much space left for it in the UK and the EU.”

Despite only being tried in a select number of neighbourhoods in one part of America, Mr Gonen believes that the recycling incentive scheme could ‘absolutely' work in the UK and would be able to attract businesses to invest in the scheme.

 The Conservatives have been staunch in their support for the incentive scheme (see letsrecycle.com story) despite Joan Ruddock, minister for waste and recycling, labelling shadow chancellor George Osborne's endorsement of recycling incentive schemes as “Tory salesmanship with no substance behind it” (see letsrecycle.com story).

Both politicians' comments led to responses on the topic of incentive recycling schemes, with those in London boroughs being some of the most eager to voice their opinions following Mayor Boris Johnson's vocal support for an incentive scheme for the capital, and admission that discussions with RecycleBank had taken place.

Mr Johnson said: “I want to find innovative ways to encourage more recycling in London and reduce waste being condemned to landfill. My officers have held initial discussions with RecycleBank with a view to explore the potential for a pilot project in London in 2009.”

The Process

In America, the system works with RecycleBank distributing its own specifically branded 30-96 gallon (110-360 litre) bins depending on resident's preference. The bins possess an embedded Radio Frequency Identification (RFID) chip, which is scanned when the RecycleBank refuse truck collects the bin from the kerbside, and then the lifting arm weighs the bin to calculate the value of the recyclables.

Questions have been raised about the potential for people to cheat the system – such as putting deliberately heavy, non-recyclable objects into their bin to fool the weighing system or purposefully buying products with lots of packaging with the intention of recycling it.

However, RecycleBank claim similar fears that people may seek to get optimum reward by filling their bins with rubbish stolen from their neighbours have been averted in America thanks to the amount of points any resident can receive being capped at $40. With people unable to gain more than $400 of discounts in one calendar year it is believed that people will focus on continually hitting this number rather than trying to cheat to the system.

Customised

Aware that the UK would pose its own unique challenges, Mr Gonen was quick to assert that the RecycleBank scheme can be tailored to suit specific communities and operates in different ways across the various US authorities currently utilising the scheme.

He said: “We know exactly how RecycleBank is doing in the US but we will not know exactly how to work it in the UK. We will have to make adjustments for it, maybe in every community in the UK as well.”

One community the US, in the pilot city of Philadelphia, recently removed the RecycleBank scheme due to the increased time and manpower it demanded. Chestnut Hill, which had 1,100 residents participating in the reward scheme, reported that RecycleBank collections added two hours to pick-up days because bins had to be weighed to calculate the value of their contents. Scott McGrath, the recycling coordinator for the authority, also said refuse trucks were finding it difficult to collect bins the size of those used by RecycleBank.

None of the recyclables are sorted at the kerbside as it is collected commingled – or ‘single stream' as the Americans term it – and it is then compacted in the truck before being sent to a sorting plant. How it will fit into Britain's system, with some authorities opting for source segregated collections, has yet to be addressed.

Cost

RecycleBank makes money to fund the incentive scheme through investment from companies, such as Coca-Cola which invested $2 million dollars into the scheme at the start of the year, and also through the money which the scheme will save municipalities in ‘tipping costs' for landfilling waste.

In the case of Wilmington, RecycleBank claims to have saved the authority $800,000 (£500,000) of which RecycleBank takes half to run the scheme. The company also received $13 million (£6.5 million) from venture capitalist firm RRE Ventures, where former American Express CEO James Robinson III is a partner.

They also received a total of $30 million (£15 million) in ‘Series B' funding from RRE, technology-focused venture firm Sigma Partners, the Westley Group and Kleiner, Caulfield, Perkins and Byers (KCPB) in an attempt to help the company expand across America and into Europe.

Business

Mr Gonen believes that implementing an initial scheme in the UK would be easier than it proved in America, especially when it comes to commercial business endorsements.

Getting large firms to offer discounts and money-off vouchers is a pivotal selling point of the RecycleBank remit, with these being the rewards given to residents. The company only managed to get bigger companies to help once Coca-Cola had come on board in the US but Mr Gonen sees British businesses as being receptive to the programme.

He said: “In the beginning it was very difficult. I think, even though there is some very complex technology involved in RecycleBank, the most difficult bit was getting business on board.”
“I think it will be easier because Europe has a history of implementing environmental initiatives and companies understand – ‘hey if we don't recycle we are going to be hit with a Government regulation'. In the US we really had to drive home the bottom-line rewards,” he added.

Rates

Mr Gonen is very proud of the rise in recycling rates experienced by participating cities in America, in fact he expected it. He said: “We weren't surprised that was what we planned. I would have been surprised if we hadn't achieved that. I knew how much was in the waste stream that was recyclable and it was just getting it so we could achieve the numbers we have achieved.”

The company is currently looking to expand beyond its East Coast base, having focused on Philadelphia, Delaware and New York, by introducing a scheme in the Mid-West state of Nebraska and plans to introduce pilot schemes to the West Coast soon.

It is also trialling an apartment block recycling scheme at New York's Columbia University, where Mr Gonen went to business school, which aims to use a kiosk facility to help combat the unique problem caused by recycling in flats and apartment complexes.

RecycleBank is even in the process of hiring a fulltime member of staff to work alongside companies and authorities in the UK and hopes to have a British scheme in place by the end of the year.
“We have a full-time person now working in the UK, who is working with municipalities and different companies [and] as soon as we can get something going with a municipality, I think we would like to get something going in the UK,” he said.