PKG0107

Written evidence submitted by Costa Coffee

As the nation’s favourite coffee shop[1], Costa welcomes the opportunity to provide written evidence to the Environmental Audit Committee inquiry on this important and complex issue. Please be aware that this submission focuses solely on the issue of coffee cups and does not make reference to plastic bottles.

1. About Costa Coffee

With over 2,000 coffee shops in the UK and 4,200 Costa Express self–serve units, Costa is the UK’s favourite coffee shop.

Corporate sustainability sits at the core of our business. We were the first retailer to develop a zero-energy retail unit, which won multiple accolades including the Business in the Community Environmental Leadership Award 2016. Our new roastery in Basildon was the first industrial processing site to reach BREEAM “Outstanding” accreditation under the new 2014 standard. Our Energy Management Programme recently won Programme of the Year at the 2017 Edie.net Sustainable Leaders’ Award. We divert 93% of our waste from landfill and recycle in excess of 60% of our operational waste. Our ongoing relationship with green-tech company Bio-bean has led to 3,000 tonnes of coffee grounds being turned into advanced bio fuels.

We constantly strive to reduce our impact on the environment, by sourcing sustainable materials and working towards ensuring that our packaging is disposed of responsibly and recycled where possible. Our cups are made from card made of sustainable wood pulp from PEFC certified forests in northern Europe, and each lid is 100% recyclable.

We sell 190 million (hot) drinks in our stores every year, 40% of which are sold in takeaway cups (60% are sold in crockery). We continue to work towards improving the recycling rates of our cups through significant investment in research, cup innovation, consumer education and cup recovery schemes and below is a list of the activity we have undertaken to date.

• In February 2017 we launched a nationwide in-store recycling scheme to take back paper coffee cups in over 2,000 stores, thereby ensuring that more can and are being recycled – including competitors cups. Since February we have recycled 28 tonnes of paper cups (over 2 million) and will soon be able to track per store and therefore town, city and region who are recycling and where further education/ marketing may be required.
• Between July 2016 and February 2017 we donated 25p to litter charities (Keep Britain Tidy, Keep Scotland Beautiful and Keep Wales Tidy) each time a customer used a reusable cup in store.
• Since February we have redirected that financial incentive directly to our customers who now get 25p off their drink when using a reusable cup in store. The change came following a survey of 5,000 customers that showed that 64% were more likely to use a reusable cup if a donation was made to charity. However, this number rose to 82% when the incentive was given to the customer directly.[2]
• This month we have launched a new multi-purpose reusable cup and premium travel cup.
• We continue to trial new innovation in paper cups to identify more easily recyclable cup materials.
• We were the first signatory to the Paper Cup Recycling Manifesto and are a board member of the Paper Cup and Recycling Recovery Group (PCRRG) whereby we seek to share knowledge and best practice; collaborate between research organisations, companies, government, local authorities and third parties; review standardisation across industry and improve communications and signage around recycling and proper waste disposal.
• In April 2017 Hubbub’s Square Mile Challenge launched in London, which we have contributed to and will continue to support online throughout the month long campaign.
  

2. Coffee cup recyclability– what are the issues?

Currently, it is estimated that 2.5 billion single use coffee cups are being thrown away in the UK every year - around 6 million of which are recycled.

Costa takeaway cups are recyclable when recovered and recycled via appropriate recycling plants such as ACE UK, Veolia’s Profibre Facility and James Cropper. Cups are being recovered through a number of schemes including Veolia’s Cup Care scheme, Simply Cup and the various projects run by charity Hubbub, as well as via our in-store recycling scheme in over 2,000 stores.

Cup material:

Like many other forms of packaging waste, paper coffee cups are made from polyethylene-coated board. The polyethylene lining, which ensures that the inside of a cup remains sealed for customer safety, can cause issues for some reprocessors, with many arguing it makes it more difficult to recover the valuable paper fibres used in the cup. As a result, cups are often rejected as a contaminant in paper recycling schemes due to this perceived barrier to recyclability. Some reprocessors also believe that cups are waxed, coated on both sides of the board or that the plastic is fully fused with the fibres, which leads them to be rejected at the point of processing.

Change in regulation:

Between 2010 and late 2014, paper cups were accepted into mixed recycling streams across the country. Following the introduction of so-called ‘TEEP’ regulations in the UK on 1 January 2015, some recyclers have claimed that paper cups pose contamination risks to their recycling streams. This allowed recyclers to place bans on paper cups in mixed recycling streams on the basis that recycling them would not be “technically, environmentally or economically practicable.”

Waste facilities infrastructure:

Takeaway coffee cups are dispersed after the point of use, making it very difficult to collate large volumes for recycling. Therefore in the UK, it is often not economically viable to recover and recycle cups. The main cost of recycling any material is in its collection rather than its reprocessing, and efficient collection relies on there being a coherent, national waste facilities infrastructure. There is a cost to single segregating cups from other waste be it specialist cup bins or separating them at a mixed recycling facility by hand.

The location of a store will also affect the likelihood of a cup being recovered and recycled. For example, cups used in offices, universities and transport hubs are far easier to recover than those sold along the high street and deposited in curb side bins.

Cups also need to be collected in bulk i.e.12 tonnes (1 million cups) at a time to offset the cost of transporting them from the collection facility to the reprocessing facility, which might be miles apart.

Finally, there is a lack of consistency between National and Local Authority waste streams as to what packaging, including coffee cups, can and cannot be recycled within household recycle.

Consumer behaviour and wider education

Educating both consumers and the waste industry will be key in increasing the amount of coffee cups being recycled. In line with the Government’s upcoming National Litter Strategy, both the benefits of how and where cups should be recycled as well as the implication of what happens if they are not, should be communicated and measured by government and the wider industry.

3. Addressing this complex issue

We believe there are three main areas to focus on by which we, as an industry, working in partnership with Government, local councils and waste processors, can help to increase coffee cup recyclability:

1. Addressing the perceived barriers to recyclability within the waste facilities infrastructure

The industry must do more to communicate with and educate the various commercial and non-commercial entities operating across the waste collection chain - ensuring that processing facilities across the UK have a comprehensive understanding of the makeup of the paper cup and all PE coated boards and their ability to be recycled.

The Government needs to lead local authorities and waste companies to implement a consistent approach to recycling of all materials across the country. This will ensure more co-operations between retailers, packaging manufacturers, paper re-processors and local authorities and ensure the infrastructure exists to recycle coffee cups and other packaging.

2. Changing consumer behaviour

Research shows that consumers are often confused or unaware of what, how and where they can recycle and of the difficulty of recycling contaminated packaging waste.

There is work to be done by industry, local councils and Government to educate consumers about how and why to recycle their used coffee cups, along with other packaging, as well as providing them with the facilities within their homes, communities and places of work to enable them to do so.

In line with the PCRRG and the BRC, we do not agree with taxing the coffee cup in order to drive consumer behaviour. Unlike plastic bags coffee on the go is an impulsive purchase. Taxation of cups would only add an additional unwelcome tax burden on UK consumers. Currently there is no clear evidence as to how taxing single-use paper cups will improve the recycling infrastructure or affect behaviour of those who litter.

3. Cup Innovation

Innovation sits within the heart of the Costa business. We will continue to invest in new cup innovation and technology to ensure that we are sourcing, buying and trialling the most innovative and environmentally friendly material available.

RESPONSE TO THE EAC SPECIFIC QUESTIONS

What is the environmental impact of waste from coffee cups and plastic bottles?

As stated above, currently, it is estimated that 2.5 billion single use coffee cups are being thrown away in the UK every year - around 6 million of which are recycled.

In addition, coffee cups make up less than 1%[3] of overall paper-based packaging waste, and there is more to be done to address the recycling of PE coated board packaging products more generally.

The specific impact on the environment from coffee cups is dependent on how they are manufactured and disposed of.

There are four different ways in which the cup can be disposed of, each of which has a different environmental impact. Our lifecycle analysis showed that each has a different impact in relation to carbon emissions, water and land use.[4]

1. Energy from Waste – The paper and plastic in the cup has a high calorific value and is therefore a good feedstock for energy from waste facilities. The heat generated can be used for district heating systems and low carbon electricity is produced. This is widely recognised as a highly efficient and environmentally sound route for many materials. In some areas of the UK there is strong evidence to suggest this is the most environmentally sustainable way of disposing of cups.

2. Composting – Some products are identified as compostable. However it should be noted that compostable packaging is tested for decomposition over a 12 week period. The majority of UK composters work to a 6-8 week processing period. It is therefore possible that the residual packaging would be sent to landfill or energy from waste. Also once composted, the valuable fibres are lost which is less environmentally efficient.

It is also important to note that the majority of food waste in the UK (the suggested waste stream for packaging) is now sent to Anerobic Digestion (AD). This process will not cope with compostable packaging and the poly lactic acid used in the compostable coating can affect the chemical balance of the AD facility.

3. Recycling – Four facilities are openly accepting cups for recycling (ACE UK, James Cropper, NEXTEX and Veolia’s profibre). The fact that cups were admissible to recycling facilities between 2010 and 2014 indicated that cups could be accepted in more general paper recycling sites. When recycling you need to consider the environmental impact of collection transportation and reprocessing of the material. Paper reprocessing is a relatively energy and water-intensive process, however when recycled the fibres recovered can be recycled up to seven further times due to the use of sustainable sourced virgin paper fibres.

4. Landfill – This has been identified as the least environmental route for cup disposal and the number of landfill sites in the UK is declining steadily. However it should be noted that landfill efficiency has increased significantly over the years and landfill gas is now recognised as a positive producer of low carbon gas.

Our lifecycle analysis[5] showed that the environmental impact of the manufacture of the cups plays a far greater role in its impact than how it is disposed of (80% vs 20%). Our Costa cup is very good in this regard as it is made in a plant in Gosport, UK which is highly energy efficient and uses renewable energy. The paper is sourced from PEFC certified forests and processed in Scandinavian factories which are known for reducing their environmental impact. Other cups are produced in other less efficient countries, such as China with less environmentally sound supply chains. Currently, the decision over where to source cups has a greater environmental impact than how to dispose of them.

Are the rates of use, collection levels and recycling levels of these products increasing or decreasing over time?

We know that coffee consumption is increasing and more consumers want their food and drink ‘to go’. The Allegra World Coffee Portal[6] report from December 2016 notes that “after 18 years of considerable continued growth, the coffee shop market is one of the most successful in the UK economy and is set to outnumber pubs by 2030 as coffee shops become the new local.”

In order to increase our levels of recycling, we recently introduced a nationwide initiative to take back any paper cups brought in to one of our 2,000+ stores and ensure they are sent to appropriate recycling facilities. In our initial trials, we found 14% of takeaway cups sold could be recovered in a single store, allowing us to make a significant contribution towards reducing the number of cups sent to landfill.

Through accepting all paper coffee cups – including those from our competitors – we currently project to recycle millions of takeaway cups a year. To date we have already recycled over 2 million cups. As our initiative continues and other brands such as McDonald’s and Starbuck’s join us, the volume of material recovered will continue to increase.

We are also aware of recent efforts by some of our own corporate partners that will see an increased number of paper cups recovered in offices and recycled through schemes such as Simply Cup and Veolia’s Cup Care system.

In addition, there have been a number of recent initiatives to recover more cups on the street such as Hubbub’s Neat Streets Cup Campaign in Manchester and the Square Mile Challenge in London. These will allow the industry to better understand consumer behaviour and how more cups can be recovered in the future.

Finally, as noted above, only 40% of coffee sales from Costa are served in paper cups. 60% of our drinks are served in china cups and we are looking at ways to further encourage reuse through initiatives like our 25p discount, which we offer to customers who use a travel cup.

What are the challenges of recycling these products? What obstacles have prevented greater progress in increasing recycling rates?

Please see section 2 above.

Are consumers aware of the complexities of recycling these products? How could we increase awareness amongst the public and what impact would this have?

Please see section 3 above.

Additionally, Costa internal data suggests that only 46% of customers say they always put cups in recycling. We have also observed, during the trial period of our current cup recycling scheme, that customers frequently contaminate recycling bins with food waste, suggesting that they are unaware that this affects the recyclability of cups. Our survey and experience in cup recycling trials suggests that improving consumer behaviour could significantly increase the number of paper cups which are recycled. If this approach was extended to other common types of litter, which are often similar in composition and associated contamination issues, the wider industry could make an even greater contribution towards overall recycling levels. This polling took place before the launch of our national recycling scheme, and we are now taking steps to inform customers of our new in-store recycling.

What actions are being untaken by industry to reduce waste generated by coffee cups and plastic bottles? How effective have these initiatives been? How could the Government better support these initiatives?

At Costa we have a long-standing commitment to cup recyclability. We were the first signatory to the Paper Cup Recycling Manifesto and are a board member of the Paper Cup and Recycling Recovery Group (PCRRG).

Furthermore, in July 2014, we set up a trial cup recycling scheme with Veolia to prove that cups recovered through mixed recycling streams could and would be recycled. Veolia reprocessing clients were interested in accepting paper cups as part of a mixed paper stream, but the trial was stopped in late 2014, due to the mandated TEEP requirements coming into effect. Since then we have been exploring alternative solutions to the issue of cup recyclability.

We have trialled and continue to trial a range of new barrier coatings which are easier to recycle and would ensure that reprocessors can recover the high value paper fibres. We remain open to any solution that meets our strict health, safety, quality, taste, and environmental standards.

As we experiment with new materials for takeaway cups, we intend to support further comparative research to provide a strong evidence base for the wider industry.

Our in-store cup recycling scheme encourages customers to drop their used takeaway cups—whether from our stores or from our competitors—back to any of our 2,000+ Costa stores across the UK. In our initial trial, we tried both front and back-of-house cup collection. We found customers often used the cup bins we provided for other rubbish and so decided to keep the responsibility with our teams to ensure that cups were free of contamination. Cups collected through our scheme are taken to our chosen waste partner, Veolia, who turn them back into moulded fibre products.

We keep our customers informed and educated via targeted campaigns. As part of our call for cups, we have distributed point-of-sale information materials to all Costa stores, and have prominently advertised the issue on the Costa website as well as across our social media channels.

We also encourage responsible disposal through the use of the “Tidy Man” symbol on our cups.

How effective, to date, have Government and local government led initiatives (such as #1MoreShot) been at reducing waste an increasing the recycling of coffee cups and plastic bottles? What progress has been made to develop a viable, recyclable alternative to the polyethylene coated paper cup? What are the pros and cons of the use of such cups?

The #1moreshot initiative showed that there is no one single solution to this problem. Whilst cups were recovered through the scheme, customers were often not in the right place with their cup to dispose of them in the #1moreshot bins. Consumers also used the cup bins for other waste, which led to contamination of the paper cup recycling stream.

Our takeaway cups are recyclable already and if disposed of in the appropriate recycling streams they can and will be recycled. We recognise, however, that currently only a small proportion of them are successfully recycled. We continue to trial a variety of innovative cup solutions from third parties to drive the recovery and recycling of cups.

As an example of these trials, our work with Smart Planet Technologies, producer of the reCUP, has recently been featured in the packaging trade media[7]. This is only one of several products undergoing comprehensive evaluation to improve the recyclability and acceptance of paper cups by standard recycling facilities across the UK.

What initiatives could be utilised to reduce coffee cup and plastic bottle waste or to lessen the impact of this waste? In particular, what are the opportunities and risks associated with:

• Incentives to encourage the use of re-usable alternatives for these products.
• Charge, taxes, deposits or levies on the use of these products.

As outlined above we are taking a number of steps to lessen the impact of coffee cup waste. We offer a 25p financial incentive for customers that use a re-usable cup in store. This is supported by in-store marketing and social media content. We have also released a new reusable cup and premium travel mug to provide more re-usable options for our customers. This incentive is only part of the solution and more consumer education needs to be communicated in order to drive up-take, which currently sits at c. 1%.

In line with the PCRRG and the BRC, we do not agree with taxing the coffee cup in order to drive consumer behaviour. Unlike plastic bags coffee on the go is an impulsive purchase. Taxation of cups would only add an additional unwelcome tax burden on UK consumers.  Currently there is no clear evidence as to how taxing single-use paper cups will increase the recycling infrastructure or affect behaviour of those who litter.

It is important that any initiative is evidence-based and involves wider industry stakeholders, waste companies, local authorities and consumers. In particular, we hope to see improvement through initiatives like the PCRRG and the Paper Cup Manifesto to share knowledge and best practice; collaboration between research organisations, companies, government, local authorities and third parties; standardisation across industry, including the collection of cups for recycling in store; and improved communications and signage around recycling and proper waste disposal.

How can we encourage households, businesses, food and drink outlets, and offices to change behaviours or introduce policies to reduce their coffee cup and plastic bottle waste?

We believe that working together with the wider industry and collaborating with central and local government across the waste collection chain can create meaningful change. As the main cost of recycling any material is in its collection rather than its reprocessing we believe efficient collection and scalable consumer behavioural change relies on there being a consistent and coherent national waste facilities infrastructure.

The industry needs to provide clear guidance to consumers as to where their cups can be recycled. This would ideally be done through a scheme such as On-Pack Recycling Label (OPRL). We also need to improve infrastructure by making more businesses offer in-store cup recycling and providing a consistent discount, across the sector, for reuse.

The industry needs to work towards raising customer awareness of contamination issues. If fewer cups were contaminated or disposed of with other waste, the number of potentially recyclable paper cups would increase.

Businesses, more generally, could contribute to reducing paper cup waste by encouraging employees to use reusable cups in work environments.      

April 2017

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