Norway DRS: Tax model and consumer education spur high collection rates

Norway’s DRS is propelled by a unique tax model that incentivizes producers and retailers to collect and recycle packaging, promoting material reuse. Infinitum, a private company that represents Norwegian retailers and packaging producers equally, collects the country’s packaging waste.

Packaging Insights speaks to Kjell Olav Maldum, managing director at Infinitum, about Norway’s DRS — which dates back to 1902 — and Infinitum’s role in the system, highlighting its latest innovations and challenges. Infinitum is the only company of its type in Norway.

Maldum states that as countries in the 1990s shifted to plastic bottles, many disbanded deposit schemes. “But in Norway, that never happened, because we had an environmental minister who was afraid of littering if the DRS system was shut down. He made a tax model that incentivized the industry so it would continue to run the DRS system.”

Infinitum operates with a board of six people: three from the retail industry and three from the producer industry. Maldum highlights how the board has the “same common goal,” which is to “collect as many empties as possible at the lowest cost per unit. That’s very simple.”

The EPR fees for producers are based on the recycling cost and material value of each container type available on the market. 

Norway has installed roughly 3,900 reverse vending machines at 3,500 collection points for the automated return of empty containers. 

Creating a tax incentive 

Norway’s DRS tax is calculated based on collection rate.Norway’s environmental tax is calculated based on packaging collection rate. The higher a producer or retailer’s collection rate, the less tax they must pay. If the collection rate is above 95%, the tax is zero. As companies switched from glass to PET and aluminum, the tax created an economic incentive to participate in the DRS. 

Maldum adds: “We have a closed-loop, circular model in Norway. Infinitum is responsible for collecting. Producers can become members of Infinitum, get a well-documented deposit and collection rate, and then don’t need to pay the environmental tax.”

Companies do not have to become members of Infinitum or participate in the DRS, but Maldum argues that it is “not possible” to sell a product with the high tax, which is roughly €0.4 (US$0.5) for PET bottles and €0.65 (US$0.76) for aluminum cans. 

“The beauty with this tax model is that it gives the industry the incentive, but then it’s up to the industry to develop the collection system,” explains Maldum. 

“This is why we have a very efficient system, because the producer and retailer are interested in ensuring that Infinitum is run as cost-efficiently as possible. When we run cost efficiently, we run environmentally efficiently.” 

As the industry is always looking into “the economics,” says Maldum, the polluter pays principle can spur innovation to create a functional system.

Plastic paradox 

Maldum addresses the idea that plastic can be a useful packaging material — “but you don’t throw it in nature,” arguing that collection and reuse are vital in ensuring plastic does not pollute the environment.  

“Plastic is very efficient. It’s the most efficient packaging material. That’s maybe the biggest paradox when people say we should stop using plastic.”

Maldum argues that collection is important to curb plastic pollution.In Norway, 5–6% of empty bottles and cans are not put into reverse vending machines but are disposed of in household waste streams. Maldum highlights the importance of education, informing consumers about the negative impact that plastic and aluminum can have on nature. 

“We have been campaigning for the last two or three years. If you throw a can into the ditch of a road and a farmer cuts the grass, the can gets into the [farming] machinery. Then, when the cows eat the grass with the can in it, they die,” says Maldum.  

Infinitum’s campaigns aim to inform people about the consequences of not using DRS. “People throw it on the ground, and then we know it will go into the ocean. A very small percentage of people we’re talking about — less than 1% — are doing this type of littering. But we focus and educate — our job is also to educate the inhabitants [of Norway].”

Beyond beverages

Maldum asserts that “there is no problem” with Norway’s DRS, explaining that the country “has had DRS all along” and that Infinitum has the full support of retailers, producers, consumers, and the state. 

However, he highlights how Infinitum is still developing and innovating to include more packaging types in its DRS. 

“We are testing to see if we can take other plastic bottles and cans that are not beverages. We have started with one product already, and now we will try to extend because we have the logistics,” says Maldum.

“How can we utilize the system and help to recycle more plastic? There is still a lot of other plastic packaging, bottle types that are not beverages, and foodstuffs that people consume.”

System expansions include beer kegs, as the industry switched from steel kegs to PET-based solutions. Moreover, Infinitum’s DRS operates at festivals, concerts, and football games to collect and recycle cups. 

Infinitum is innovating to include beer kegs in Norway’s DRS.Another example is wine packaging. “In Norway, we have this peculiar reality with a wine monopoly, where you must go to a state-owned shop to buy wine and spirits. They are also part of the DRS system,” explains Maldum. 

“The Norwegian authority is a very big customer regarding wine, since they buy wine on behalf of the Norwegian population. They asked the wine producer: “Can you please start using PET bottles instead of glass bottles to reduce CO2 emissions?” 

Accessible success

Maldum points out that Norway’s DRS legislation is clear. “It says that if you sell a product with a deposit mark, you must take back and pay out the cash deposit.”

The tax incentive, combined with consumer education, creates an effective collection and reuse system, according to Maldum.  

He concludes: “It gives consumers a very efficient system, because they know they can deliver back empty packages at the corner shop, the gasoline station, or to huts in the mountains.”

“Wherever you are, if you can buy a soft drink bottle or beer can, then you know that you can deliver it back, and we are obliged to pick it up from every outlet all around Norway.”