External costs saved through recycling of aluminum cans: Costs not reflected on the market price

The history of container deposit laws

Container deposit law—also referred to as ‘the bottle bill’—is a law that requires the payment of a minimum refundable deposit on soft drinks, beer and other beverage containers so as to ensure a high rate of recycling or reuse. Before 1930s, people drank soda, beer and other beverages from refillable glass bottles which were reused many times over before being discarded. Steel beverage cans were then introduced, revolutionizing the beverage market (Container Recycling Institute, 2009). Unbelievably, consumers were encouraged to discard their empty cans wherever they would be. It was after the World War II that cans began replacing bottles in the beer industry. The refillable glass bottles were replaced by the cans, boosting sales for their convenience and disposability (Container Recycling Institute, 2009).

This shift resulted in a sudden increase in beverage container litter, prompting environmentalists to propose container deposit laws in state legislatures. The first container deposit law was passed in Vermont in 1953 but did not, however, institute a deposit system. It simply put a ban on the sale of beer in non-refillable bottles. Four years later, the law died after strong lobbying from the beer industry.  By 1970, the first container deposit law in the United States was passed in Oregon. By 1986, ten states had passed some forms of beverage container deposit law. These laws were intended to reduce beverage container litter and to conserve natural resources through recycling and minimize the amount of solid waste being sent to landfills. They proved to be exceedingly successful in achieving the two objectives (Container Recycling Institute, 2009).

            Presently, eleven states have passed a container deposit law that requires refundable deposits on certain beverage containers. Despite bottle bills meeting with opposition from members of the beverage and grocery industry, state deposit law is yet to be repealed in any state. Actually, several states have expanded their laws to include beverages like sports drinks, tea, juice and bottled water which did not exist when most container laws were passed (Container Recycling Institute, 2009).

How container deposit laws work

            The container deposit law uses a deposit-refund system which was created by the beverage industry as a way of guaranteeing the return of their glass bottles to be washed, refilled and sold again. A retailer pays a deposit to the distributer for every can or bottle of beverage purchased and the consumer pays the deposit to the retailer when buying the beverage. If the consumer returns the empty beverage can or bottle to the retailer, a redemption centre or to a reverse vending machine, the deposit is refunded. The retailer then gets back the deposit from the distributor, and in most U.S. states, with an additional handling fee of between one to three cents to help cover the cost of handling the containers (Litherland, 2010).

The cost to distributors and bottlers is compensated by the sale of scrap bottles and cans as well as by short-term investments realized from deposits collected form retailers. They also make bonus profits on containers that consumers failed to return for the refund. The unredeemed or unclaimed deposits remain, in most states, the distributors’ and bottlers’ property and usually amount to millions of dollars a year (Container Deposit Institute, 2009). In Massachusetts and Michigan states, courts have ruled that the unclaimed deposits are ‘abandoned’ by the public therefore rightfully belong to the state. They are then used to fund environmental programs while in Hawaii and California, the state collects the unclaimed deposit for administering the deposit system (Container Deposit Institute, 2009).

Steps in producing aluminum can

The first step in the process of making aluminum cans is the mining and refining of aluminum. Aluminum is found naturally in a mineral known as bauxite. Crushing and grinding of the ore follows where the ore is sieved to sort its size and crushed to produce uniformly-sized material. Large grinding mills are used to grind and mix the ore with sodium hydroxide at high temperature and pressure. The final product at this stage is called slurry and contains sodium aluminate and un-dissolved bauxite residues containing silicon known as red mud which is removed after sinking to the bottom of the tank (Rock and Minerals, 1999).

The next step is called digesting and involves pumping the slurry to a digester where the chemical reaction to dissolve the alumina takes place under 50 pounds per square inch pressure and 145 degrees Celsius between 30 minutes to several hours. This process produces sodium aluminate solution which is pumped into a series of flash tanks to reduce pressure and heat and then transferred into settling tanks. Then the settling step follows which is achieved by use of gravity and addition of some chemicals. Impurities like sand and iron and other trace elements that do not dissolve eventually settle at the bottom (Litheralnd, 2010). A coffee-like substance surfaces at the top and is directed through a series of filters and washed to recover alumina and caustic soda. More filtering is performed and the resulting filter cake washed to remove alumina and caustic soda. The resulting liquor- a sodium aluminate solution- is cooled and pumped to the precipitators (Rock and Minerals, 1999).

            Precipitation is then performed in tall tanks called precipitators where the now clear sodium aluminate from the settling and filtering processes is pumped into these precipitators. As the liquor cools, seed crystals-fine alumina particles- are added to begin precipitation of pure alumina particles which begin to grow around the seeds and settle at the bottom of the tanks where they are transferred to thickening tanks. It is finally filtered and conveyed to the calcinations tanks (Rock and Minerals, 1999).

Calcination is a heating process used to remove the chemically combined water from the alumina hydrate to produce anhydrous alumina. It is then filtered and rinsed to remove impurities and moisture. The hydrate is carried by continuous conveyor system into a calcining kiln and gas-fired to temperatures of 1,100 degrees Celsius. This results to a white powder, the pure alumina. The next stage is to convert the alumina to aluminum and this is done by smelting through The Hall-Heroult process (Litherland, 2010). This process takes place in large graphite or carbon lined steel containers called reduction pots. Chemical reaction needed to convert the alumina to aluminum metal is done by running electrical current through the cryolite/aluminum mixture. The reaction produces metallic aluminum and carbon dioxide. The aluminum settles at the bottom of the pot where it is periodically tapped into crucibles. Finally, the metal is ready to be forged, turned into alloys and extruded to be used to make appliances such as cans, cars, electronics and other items (Litherland, 2010).

Cans are then taken to a label press where they are painted and given a clear coat to protect the paint. The can is then placed into an oven to bake the paint and coating so as to prevent damage. After cooling, the insides of the cans are sprayed with coating to prevent the materials from leeching into the contents and baked again to seal the second coating (Litherland, 2007). The can’s bottom is re-formed into a dome to increase its strength while the top part is narrowed so that the top may be put in place later. Testing for leaks is performed, and the cans shipped to beverage companies. The lids are then cut, molded and shipped separately and are put in place after the beverage is inside the cans hence sealing the beverage inside (Litherland, 2010).

Steps in producing a can from recycled aluminum

Aluminum recycling is a process by which discarded aluminum is collected, reprocessed and used again in products after its first production. The process begins with separating the cans from the waste usually using an eddy current separator. They are then cut into small equal pieces which are chemically and mechanically cleaned and blocked to reduce oxidization losses when melting. The blocks are then loaded into a furnace and heated to 400 degrees Celsius to produce molten aluminum (Rock And Minerals, 1999).

Dross is removed and the dissolved hydrogen degassed using chlorine and nitrogen gas and samples taken for spectroscopic analysis where depending on the type of product required, zinc, copper, manganese, silicon or magnesium is added to adjust the molten composition to the correct alloy specification. The top five aluminium alloys which are produced are 6061, 7075, 1100, 6063, and 2024. Finally, the molten, aluminium is tapped from the furnace and the process repeated again for the next batch. The aluminum is now ready to be cast into cans and other products (Rock And Minerals, 1999).

External costs that are saved through recycling of aluminum cans

Obtaining aluminum from bauxite means mining the ore from the ground since alumina does not occur naturally from the earth. This calls for extra cost of machinery, labor and land where mining is to be done unlike in recycling where land is needed only for the factories. The process of producing aluminum requires a lot of energy to run the machinery and the various steps in the production as well as vast amounts of raw materials. It is also more costly because measures have to be put in place to counter the excess carbon dioxide produced during the process as compared to recycling besides necessitating more landfills for waste disposal (Denne et al, 2007).

Additional external costs to the environment that are saved through recycling

Mining disrupts the land since aluminum is mined from bauxite, and despite measures being put in place to rebuild the land after mining, the changes as result of mining are detrimental to the surrounding environment. It also has health consequences for people living around the mines because the caustic soda used to extract alumina has been known to leech into the groundwater increasing sodium in domestic water supply which can cause hypertension (Denne et al, 2007).

 Dust clouds emitted from the factories also adversely affect the respiratory system of locals. Mining bauxite disrupts rain forests, causing the loss of habitat for plant and animal species, soil erosion and severely affects the capability of soil to retain water. Alumina spilling while ships are loading along is a cause of coral reefs degradation (Denne et al, 2007).


The container deposit law in support of aluminum recycling can be justified because container deposit systems are a proven and sustainable means of capturing beverage cans for recycling.  States with deposit programs turn up the highest rates of can recycling compared to the, non-deposits states. Can recycling is economically viable as can also be demonstrated by the fact that the 10 bottle bill states recycle 490 containers per capita annually, at an average cost of 1.53 cents per unit. The 40 non-bottle bill states recycle 191 containers per capita per year, at a cost of   1.24 cents per unit (Container Deposit Institute, 2009). With the goal being to capture the maximum quantity of materials possible, then deposits, curbside recycling and drop-off centers should constitute any states economic and environmental plans.

Societal and environmental costs are associated with the manufacturing, disposal, and recycling of beverage containers.  Container Deposit Laws reduce the uneven environmental effects of waste associated to beverage containers. Vast amounts of Greenhouse gases are emitted by the billions of beverage containers discarded as waste. This leads to enormous wastage of energy as more energy is required to replace the wasted containers. Studies have shown that the implementation of deposit laws produce a ripple effect in the reduction of litter since most litter collected consisted of beverage containers, bottle caps, pull tabs and carriers. Hence, for a little increase in price in the form of container deposit law, more than two and a half times as many containers are recovered for recycling.


Appendix I: The chart below illustrates how container deposit law results in higher beverage container rates

Average Beverage Container Recycling Rates(By Weight)

Source data: Container Recycling Institute (2009)

Appendix II: How the container deposit law works

Source data: Container Recycling Institute (2009)

q  Distributor collects deposit when he/she delivers containers to retailer

q  Retailer collects deposit from consumer at point of purchase

q  Deposit is  refunded to consumer when container is returned

q  Deposit is refunded to retailer when containers are returned to distributor

Appendix III: From the table below it is evident that container deposit law helps in reduction of litter

StateBeverage Container Litter ReducedTotal Litter ReducedNY70 – 80%30%OR83%47%VT76%35%ME69 – 77%35 – 56%MI80%38%IA77%38%Source data: Container Recycling Institute (2009)


Container Recycling Institute (2009). Container deposit legislation: past present and future.

     Retrieved from http://www.bottlebill.org/about/whatis.htm

Denne, T. Irvine, R. Atreya, N. & Robinson, M. (2007). Recycling: cost benefit analysis

     Retrieved from http://www.mfe.govt.nz/publications/waste/recycling-cost-benefit-


Litherland, N (2010). The process of making aluminum cans. Retrieved from


Rock and Minerals (1999). How aluminum is produced. Retrieved from