Implementation and Evaluation of an Incentivized Blockchain-Based Deposit-Refund System for Bottled Beverages in Germany

Plastic or aluminum packaging represents a lightweight and durable alternative when compared to glass. The impact of lightweight materials on shipping costs is non-negligible and has, therefore, been leveraged in the beverage industry for the past 30 years. Simultaneously, the portion of reusable bottles (Mehrwegflasche) has steadily fallen (from 72% in 1991 to 43% in 2015), which prompted German lawmakers to introduce a system of returnable one-way bottles (Einwegflasche) in 2003 on which a deposit is paid.

Contrary to expectations, this regulation has not stopped the influx of one-way bottles but has, rather, benefitted bottlers. Whenever consumers pollute by leaving behind one-way bottles, an instant 25 cent profit --- assuming that no one else has returned them --- is generated for the producer. This passive profit was estimated to have reached up to 192M€ in 2011 alone.

Ideally, this pollution of the environment should be penalized by splitting the resulting non-claimed deposits of one-way bottles between environmental agencies and those consumers who regularly purchase reusable bottles, an act which saves more resources. As a further consequence, those consumers who repeatedly neglect to return their one-ways should be required to pay a higher deposit. Such a revised approach can hopefully maximize the number of returned one-way bottles and effectively steer users towards reusable ones. Otherwise, a further decline may be inevitable, which has been shown to have had a direct negative impact on global warming, in addition to the excess amount of waste produced thus far.

When considered on a case-by-case basis, this problem inherently deals with deposits of very low extrinsic value. Moreover, such a system has to manage account balances and track the movement of value, increasing the appeal and likelihood for external attacks. Therefore, implementing the proposed approach by utilizing smart-contracts and micro-transactions on the blockchain may be considered when choosing the underlying infrastructure. Yet what would such an implementation look like, and are there any special considerations to be made?