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Pay as you throw
02-MAR-2005

Options, economics and prospects across Europe

¿Pay as you throw¿ has been
implemented in Europe for over a decade now, but how successful and economical
is its implementation? Several European trials suggest that PAYT does pay off.

Driven by legislative, environmental and economic concerns, an increasing number
of countries are working to reduce the amount of solid waste they send to landfills
and to increase diversion and recycling. This new strategy generally requires
support from a broad base of stakeholders. It also prompts municipalities to
review their traditional financing mechanisms for waste management and consider
differentiated fee systems for the services involved. At the same time, many
municipalities are keen to attain a higher degree of sensitivity for individual
waste generation and to lower the total amounts of waste they need to handle.

PAYT aims to increase recycling and lower waste generation

Within this context, one strategy that is receiving growing international interest
is ¿pay as you throw¿ (PAYT), in which citizens reduce their individual waste
production because of financial incentives. By facing a direct form of unit
pricing for the different discards they produce, households are motivated to
divert an increased portion of their wastes away from the conventional routes
of waste disposal. This aims to increase the amount of recycling activity and,
ideally, lower overall waste generation. In this way, waste collection more
closely resembles other utilities, where the customer directly pays for services
received.

ORIGINS AND DEVELOPMENT OF PAYT

The use of prepaid sacks or labelled bins were the first steps taken to relate
payment for waste services directly to the collected unit (sack) or to identify
the actual waste generator. In the early 1990s, transponders became affordable
for use in identifying waste bins or their users. Since then, significant advances
have been made both in developing efficient, tamper-proof PAYT solutions, and
in accommodating them in densely populated urban areas, which often do not have
individually assigned waste containers. A large spectrum of technical approaches
for unit pricing in different settings is now available (see Figure 1), and
PAYT has become a practical reality in an increasing number of countries in
Europe, such as Germany, the Netherlands, Sweden, Denmark, Austria and Finland.

PAYT PRINCIPLES: IDENTIFICATION BY BIN OR USER

Implementing a PAYT system depends on identifying the producer, and measuring
the waste generated and/or the associated services as well as the unit pricing
for individualized charges.

Bin identification

From the spectrum of systems available, bin identification is by far the most
popular option for municipalities and waste management associations in Europe.
For this approach to work, it is vital to have a good system for bin allocation,
particularly in densely inhabited, multi-family areas, to ensure accountability
for the waste generated. Possible solutions include individually locked bins,
locked container boxes and wire cages set up for a known circle of users.

However, reduced accessibility will affect not only users but also collection.
The hauling time for each container site can increase by 12%¿40% as a result
of installing such measures. Furthermore, additional investment will be required
to set up new sites: in Germany, for example, this involves between ¿7
to ¿45 per tonne of waste.

User identification

An alternative to bin identification is user identification through the chamber
system (¿Müllschleusen¿), which can be operated in various environments
and allow PAYT principles to be applied in full. Advertised under the technical
synonym ¿waste lock¿ or ¿lockhopper¿ by their producers, chamber systems are
waste storage installations that require users to pass their waste through a
special feeding chamber. Access to this chamber is provided after the user has
registered, such as by means of a smart card or electronic key. The amount of
waste deposited is then recorded, and the responsible authority then either
bills the user or the system deducts a corresponding amount from prepaid credits.
Devices on the market range from simple and completely mechanical systems to
fully automated, even solar-powered electro-mechanical systems.

WEIGHT-BASED AND VOLUME-BASED CHARGING Ident-weighing systems provide the technical solution for weight-based charges. The weight of the collected waste is measured with the help of a weighing device integrated into the lifter, which empties the waste bin into the collection vehicle. Systems operated for volume-based accounting either establish the actual filling level of the collection receptacle with the help of ultrasound or optical sensors, or work on the basis of the different volumes of standard-sized receptacles assigned to collection. These receptacles will then be identified during pickup whereby the size (i.e. filling capacity) determines the volume that will be taken into account. Another way is for households to buy one-way receptacles (such as plastic sacks) of a certain size which will be completely retained during the collection. Weight-based accounting is believed by many as the more accurate way for charging, as only the exact mass of the waste, instead of the volume or even maximum content of the waste bin, are considered. However, volume-based schemes are often easier to implement, give less opportunities for failure, and make little difference for those who operate conventional thermal treatment systems and thus often have heavier ashes in their waste.

The most sophisticated chamber solutions include remote-control sensing, where
radio messages are sent automatically when operational failures occur or when
the storage units need to be emptied. Both volume- and weight-based accounting
can be carried out, and various types of standardized waste containers can accommodate
these installations, including large containers up to 30 m³,
which can be directly loaded on to pickup trucks.

An example of a larger solution can be found in the German city of Sindelfingen,
where a total of 18 chamber installations with a container capacity of 8 m³
each were set up in 2003 to replace standard-sized, 1100-litre waste containers
for residual waste in 16 residential areas. One of these installations now replaces
the pickup operations for 29 containers of the former type.

Considerable logistical advantages, including waste collection from a small
number of locations and the arrangement of pickup operations on demand, compensate
for the relatively high investments that these solutions require. Thus a chamber
solution is an interesting option for a very broad range of applications, including
commercial centres and even single-family houses.

EXAMPLES OF PAYT SYSTEMS IN EUROPE

In Germany, an electronic system for bin identification and differentiated
billing system was first introduced in Dresden, Saxony in 1994. Since then,
many German districts and cities have reformulated their waste statutes and
collection plans, enabling PAYT to be a viable option when planning new waste
management strategies. For Germany as a whole, company figures indicate that
in 2000, more than 4.5 million waste bins carried an identification device,¹
corresponding to approximately 9.2 million households. Following further subsequent
expansion and development, it is likely that waste services and billing using
PAYT principles now operate in about one quarter of German households (see Table
1).² Combinations of basic
fees and variable, service-dependent fees make up 24%, while fully variable,
one-tiered charging models are applied in 2% of cases only.

In Germany and the Netherlands, chamber systems for some time have been considered
an instrument to address citizens¿ concerns and their demands for fair treatment
in response to ever increasing taxes or levies for waste services. Transparency
in the cost of waste services may also play a crucial role in prompting more
widespread uptake of this approach in the future.

In Italy and Austria, interesting pilot schemes are reported where door-to-door
collection in some small and medium-sized tourist towns has been replaced by
a centralized collection service, arranged on demand via the chamber system
approach. Aside from the large cost savings from optimized transportation and
shrinking amounts of waste for disposal, there are also noticeable positive
effects to traffic, living quality and city appearance. Integrating such a system
with central collection points for the collection of recyclables offers citizens
the ability to dispose of their recyclable discards and residual waste at the
same time. Such a system places less emphasis on households to be responsible
for their own waste bins and releases landlords of multi-family dwellings from
their obligation to organize billing for each tenant.

Table 1. Distribution of charging models for residual waste collection in Germany
Scheme		Distribution (%)
PAYT-related charging schemes: 26%	Basic fee + variable service fee (ident)	15
	Basic fee + token system	7
	Basic fee + tag system	2
	Entirely service-dependent (ident, fully variable)	2
Non-PAYT waste charging: 69%	Entirely service-determined (fixed service)	40
	Basic fee + service fee (conditionally variable)	22
	Fixed charge (flat rate)	7
Miscellaneous	¿	5

In Italy and Ireland, the application of PAYT systems is evolving rapidly due
to the revision of national policy programmes. The Minister for the Environment
in Ireland declared January 2005 as a target for national completion of the
changeover to pay-by-use waste charges for all households. Italy abolished the
flat-rate tax (TARSU) and has set a target to complete the shift ¿from tax to
tariff¿ by 2007. In both of these countries, there have been significant moves
towards realizing these goals, such as the preparation of new waste fee ordinances
and establishment of additional collection schemes for recyclables. However,
there is still some way to go before PAYT is fully implemented.

THE IMPLICATIONS OF PAYT

Experiences to date suggest that chamber systems provide the most effective
solution, particularly in terms of fair allocation of waste charges and waste
diversion goals. Numerous cases in Europe have shown that the source separation
of certain material fractions can rise by over 100% after the introduction of
PAYT, even when the respective collection systems for source-separated waste
are already in place. In particular, this applies to lightweight packaging material,
organic waste and waste paper, which have conventionally been found in large
quantities in residual waste. Chamber systems are often linked to areas where
the reduction in residual waste and increase in source separation reach the
highest rates, well above the reasonable average change of 30%¿50%.³

Source separation can rise by over 100% after the introduction of PAYT

However, in many instances a reduction in residual waste has occurred at a
higher rate than source separation alone could explain. The ¿missing¿ amounts
of waste may be due to unfavourable waste disposal activities, such as illegal
dumping. Such concerns have formed a significant stigma for PAYT solutions.
Occasional examples of increased waste export to outside areas or of more pollutants
found in the recyclable waste streams have indeed been found (see Figure 2).

A recent survey conducted among municipal authorities in Germany explored the
issue of the ¿disappearing waste¿, which is frequently put before advocates
of PAYT as a counter-argument to its introduction. Nearly three quarters of
the respondents named fly-tipping and waste export as an almost inevitable consequence
of the application of chamber installations.⁴
However, it is notable that the concerned responses included feedback from areas
that had not operated such systems and were thus an expression of fears rather
than proven facts. A recent European research project (PAYT-project) confirmed
that hard facts in support of such allegations are difficult to find and are
very seldom directly supplied by those sceptical of PAYT. In contrast, most
reports about PAYT applications speak of few unfavourable consequences in relation
to the manifold positive effects and improvements that can be attained. This
reflects enhanced knowledge about proper implementation of PAYT systems, which
has materialized in a more careful selection of the applicable technology, appropriate
waste charge designs and other important measures such as public education during
recent years.

High investment and maintenance costs remain as a potential obstacle to the
introduction of PAYT. Taking German examples, additional investment for installing
chamber solutions on standard waste bins can range from ¿15 to ¿90
per tonne of waste disposed and operating expenses range from ¿4 to ¿15
per tonne. According to representative calculations made for different types
of chamber systems (using a depreciation of eight years and the common range
of waste charges in Germany), break-even was reached after a 9%¿19% reduction
in residual waste for simple chamber systems with a top-lock, and after 23%¿38%
for more sophisticated systems.⁵

These results, combined with the reduction in residual waste when using these
systems, should help to diminish fears that chamber solutions might not be economical.
In fact, chamber solutions are not the most cost-intensive solution; this can
be proved by replacing a large number of bins with a chamber system with a high
container capacity. Bin identification systems, with total additional expenses
ranging ¿4¿7 per tonne of collected residual waste or ¿1.5¿2.5
per capita per year,⁶ can indeed
be less expensive; however, the potential to apply such a system at full scale
in dense residential areas is limited and requires additional investment for
suitable container settings. In addition, the waste reduction and waste diversion
effects using this strategy were generally lower, although one can optimize
collection by permanent monitoring of bins and pickup operations.

Simple chamber systems reached break-even after a 9%¿19% waste reduction

The cost of invoicing is approximately the same for most PAYT systems; however,
chamber systems can reduce it. Here the direct identification of the waste generator
¿ as opposed to the more circumstantial way of identifying waste generators
via their receptacles ¿ has a positive effect.

The core challenge for PAYT is to introduce the associated technical components
and provisions in such a way that local environmental concerns are addressed
and waste streams are influenced in the manner desired. Often this requires
an iterative approach, whereby many different aspects need to be considered,
which would prompt several adjustments over time. Improved performances going
far beyond current expectations for individual behaviour of waste disposal may
pay off, not only for the incremental costs of introducing PAYT but also for
the painstaking adaptation processes that have to take place.

Dipl.-Ing. Jan Reichenbach, MSc, is Senior
Researcher and Head of the International Project Unit at INTECUS GmbH, Waste
Management and Environment-Integrating Management, and has co-ordinated an EU-funded
research project on PAYT, from which a handbook has been produced.

Fax: +49 351 31823 33

e-mail: intecus.dresden@intecus.de

NOTES

1. Potthast, H. (BDE e.V.) Entwicklung und Standards für Sammlung und
   Transport von Abfällen. Fachtagung Informations- und Kommunikationsmanagement
   in Umwelt und Abfallwirtschaft, 2002.


2. Einzmann, U., Turk, Th., Fricke, K., Lenkungsfunktion der Abfall- und Abfallgebührensatzung.
   In: Müll und Abfall 8/01.


3. European Research Co-operation ¿PAYT¿, Project findings, 2001¿2003,
   www.payt.net.


4. Verband kommunale Abfallwirtschaft und Stadtreinigung e.V. (VKS): VKS ¿
   Information 61, 2004.


5. Verband kommunale Abfallwirtschaft und Stadtreinigung e.V. (VKS): VKS ¿
   Information 39, 1999.


6. INTECUS: Multi-client study ¿Die Erfolgsfaktoren der Zukunft ¿ Chancen
   und Risiken von Ident-Systemen bei der Abfallsammlung¿, 2004.

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