Material Cost Differentiation Project Gets Green Light

At their May and June meetings, Recycle BC, MMSW, MMSM and Stewardship Ontario’s Board of Directors approved the Material Cost Differentiation (MCD) Project Charter. With their support, the project is now underway.

In Q4 of 2016, each of the four Boards were asked to assign a delegate to the Guiding Principle Working Group (GPWG). The selected include: Bob Chant, Loblaw (Recycle BC), Christine Bomé, Walmart (MMSW), Neil Antymis, PepsiCo (MMSM) and John Coyne, Unilever (Stewardship Ontario). The GPWG was formed to determine principles for the MCD Project to help the project team identify the relevant conditions to consider when measuring material specific cost impacts.  Eight guiding principles were established:

  • Relatively counts. The methodology must produce results that inform stewards about the relative cost impacts of the materials they supply into the marketplace.
  • All designated materials count. All designated materials of the packaging and printed paper program should be considered when measuring cost impacts even when those materials are supplied and/or managed in small quantities because all materials are constituents of the recycling system.
  • All material characteristics count. When differentiating the cost impacts of one material as compared to another, all of a material’s characteristics that can reasonably be measured should be measured because each material’s characteristics can impact costs in different ways.
  • All activities count. All activities necessary to prepare the material to be repurposed should be considered because the intention is that all materials supplied into the market should be repurposed.
  • Value counts. Commodity value attributed to a material must be consistent with the decisions applied when differentiating cost impacts.
  • System design and operations count. The MCD methodology should be rooted in measurable recycling system activities, resource usage and cost drivers.
  • Emerging trends count. The MCD methodology will consider evolving recycling technologies and practices to ensure that the most current material management techniques inform measurements of cost impacts.
  • The material mix counts. The composition within material categories may differ according to the scope of each program and needs to be considered because such differences may result in different impacts on cost.

The launch of the MCD Project was announced at the 2016 Annual Steward Meeting in October due largely to the decision made during the Fee Methodology Project that each material’s specific cost impact would continue to be a key input to calculating fees.  The primary objective of the MCD Project is to develop a methodology that can differentiate the cost to manage each material in the recycling system in a way that satisfies the eight guiding principles and that will work equally well for all four programs. To learn more about how steward fees are currently calculated and a brief introduction into the MCD Project, watch our video below:

We will continue to keep you informed of the progress made throughout the project.