AmCham FMCG Committee SWM Meeting

DateFebruary 1, 2022
Event categoryAdvocacy
Venue Double Tree by Hilton, Yerevan
On 1st February 2022, AmCham held a hybrid (half offline, half online) Fast-Moving Consumer Goods (FMCG) Committee Sustainable Waste Management (SWM) Meeting in Chicago Hall, Double Tree by Hilton, Yerevan. Elina Markaryan, AmCham 1st Vice President and Chair of the FMCG Committee, Kyriakos Parpounas (onl.) and Anastasia Ellina (onl.) from Parpounas Sustainable Consultants Company, 6 FMCG Committee Members, and AmCham Executive Team were present at the meeting. The meeting was chaired by Elina Markaryan.
Kyriakos introduced the results of the studies PSC has done, presented the overall concept of Extended Producers Responsibility (EPR) and Deposit Refund System (DRS) – two collecting systems running in parallel, which were created in different periods and have a poor cooperation. He focused on the DRS tool, introduced the international practices of the DRS stating it is a solution of 30-40% of the packaging in the EU market and explaining the principle of the DRS model, its manual and automatic collection types. Kyriakos shared experiences of countries that use only EPR and countries that use both simultaneously, such as Norway and Iceland.
For a better understanding of the concept, the presenter introduced the DRS management in Lithuania taking into consideration that it is also a post-Soviet country having similarities with Armenia. He talked about the producer’s and retailer’s obligations and mentioned that if the DRS and the EPR systems could cooperate it would optimize their work and also decrease some of the industrial costs due to the distribution, which should be negotiated with the Government of the RA. Given the Lithuanian case of DRS model, Kyriakos presented the cost and benefit Analysis for the DRS options/models in Armenia. The Consultant Company suggested 3 Options of DRS in Armenia:
• Option 1 “All in” – PET bottles, beverage cans and glass bottles
• Option 2 “Plastic” – PET bottles
• Option 3 “Combined” – PET bottles, beverage cans (aluminum and steel), glass bottles (some size)
According to the countries market price acquisition of one Reverse Vending Machines (RVM) is approx. USD 24.000, depending on the manufacturer and the capacity. Therefore, the cost benefit analysis shows that preliminary investments for Option 1 for RVMs in Armenia can be approximately USD 28 million, while for the Option 2 can be approximately USD 22.000 and for Option 3 can be approximately USD 27 million. As a summary of cost and benefit analysis it turned that the most cost-efficient DRS model is the Option 1, where Net Present Value (NPV) is USD 13mln., Internal Rate of Return (IRR) is 37,97% and Equivalent Annual Net Direct Cost to Business (EANDCB) – USD 4.24 million.
Kyriakos also talked about the VRM points for collecting the packages, which is dependent on the population numbers. He confirmed in the end that in a months’ time, the industry will have the EPR report ready and will be in place to cooperate with the Government to clarify what are the options ahead. As immediate steps he proposed the following:
• The country can inquire support from EU programs (i.e., EU4Environment to help in the drafting of the legal framework). Also, the state should clearly communicate the strategic direction.
• The country needs to evaluate the options and whatever is the outcome to develop a strategy and an action plan, which should include the drafting of laws in 2022 (Waste Law and Packaging Law.)
• Industry should evaluate the alternative options in undertaking the producer responsibility and decide which is the preferred route (EPR, DRS, EPR and DRS together.)
After the presentation Q&A session was opened, during which further clarification on the topic was provided.