Q&A about fees 2020

The fee adjustments from January 2020 will naturally lead to questions about the background and reasons for the change and, not least, about the continued major fee increases for paper and plastic packaging. Answers to the questions we have identified so far are presented below. Please keep an eye on this page because we may publish more questions as they arise.

More questions or concerns? Contact your Account Manager if you require further information about the new fees.

The fees were raised in 2019, why do they have to be raised again?

As of January 1, 2021, producer responsibility will be subject to stricter requirements. These requirements are already demanding resources and they will continue to affect fees as we move forward (see the question about future increases below).

There are also other reasons, partly because the market situation has not recovered for either paper packaging or plastic packaging. Prices for collected materials have continued to fall, especially for mixed paper where revenues from material sold have declined. Moreover, the trend is that more and more material is being collected. The amount of packaging dropped-off at recycling stations is growing, not least in the wake of changing consumer habits with record-high levels of e-commerce. The more packaging collected, the greater the load on the collection system which, in turn, requires more emptying and cleaning and more frequent maintenance.

Has the price drop affected all types of material?

No. Waste cardboard has accounted for the greatest decline, but the prices for recycled plastic have also continued to fall because of the continued imbalance between supply and demand. However, Svensk Plaståtervinning’s new ultra-modern sorting facility in Motala has had a positive impact because revenues have risen as the quality of the sorted material has improved. A negative factor for plastic, however, is the rising costs for recovering energy from non-recyclable materials. While metal prices have remained generally stable, we are now seeing some differences between different types of metal.

How are the fees calculated, how are they set and who decides?

Every type of recyclable material has to bear its own costs, with no cross-subsidization between the categories. We take pride in our competitive-neutral handling of all types of material. If the revenues generated by efficiency improvements or successful material sales, for example, are not used during the year, they are included in the calculation of the packaging fees for the following year. The packaging fees are determined each year by the Boards of the materials companies (Returkartong, Svensk Plaståtervinning and Metallkretsen), on which both retailers and producers are represented.

How does FTI work to improve its operational efficiency?

We continuously monitor our logistics costs and change our routes, for example, to improve transport efficiency. Last year, we signed new emptying, transport and baling contracts. Together with our partners, we monitor and review the contracts. We have a model container and design program, enabling lower costs for procurement, new orders and so forth. In addition to maintaining low operating costs, we are continuously improving the efficiency of our recycling processes in order to increase the value of recycled materials and generate higher revenues.

Is the increase relative to a single packaging unit?

For a milk carton, the increase is about SEK 00.37. For a can of crushed tomatoes, the increase is about SEK 0.22, and for a plastic biscuit packet, the increase is about SEK 0.04.

What kind of trend can you see? Is there also a risk of major increases in coming years?

Yes. There may be more increases, especially when a new regulation comes into force with the aim of gradually expanding curbside collection services and making them available to all residential properties in Sweden. That will lead to mandatory investments that have already begun to affect the fees and will probably have an even greater impact in the coming years. As of January 1, 2021, anyone who wants to run a newspaper and packaging collection scheme must obtain a permit from the Swedish Environmental Protection Agency (EPA). Producers must either be affiliated with a similar scheme or organize their own. Efforts to prepare our application have begun and in autumn 2019, we will be holding consultations with Sweden’s 290 municipalities – a huge task that requires resources. But a change in the fee structure for plastics will make us better equipped. A high and low level is a far better reflection of the actual costs and revenues for each type of material. That is why we have also introduced differentiated fees for paper packaging from January 1.

Will the new fees apply from April 1?

No. We have decided to meet requests for full fiscal years, which means that the new fees will apply for a period of one year from January 1, 2020. The fees from April 1, 2019 will apply for a period of nine months.

Why does FTI have to collect and recycle more material?

Our goal is to achieve the Swedish government’s recycling targets. These targets have been gradually raised, which means that both producers and consumers will need to increase the amount of material they collect and recycle.

How does the value of the collected material affect the packaging fee?

The price we are paid for recycled materials has a direct impact on packaging fees, since both of these revenues cover the respective material’s costs for collection and recycling. The price paid for collected materials is determined by how well they are separated – whether they are high-quality and can be recycled – and by global market prices. Our goal is to account for both quality and the global market price when we sell the material in order to keep packaging fees as low as possible.

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