Investigating a Packaging Return System for E-Commerce

Feb 01, 2022 | 5 min read

At NØIE, we embrace circular thinking. We want to ensure that the value of our packaging is retrieved after end-of-use of the products. This includes eliminating waste, avoiding the use of new resources and lowering CO2 emissions. That’s why we set out to investigate whether a return system for our plastic packaging would be feasible and sustainable.

And as we will show, a return system can leave a positive impact on our products' carbon footprint when customers return two or more items per shipment. Shipping makes up a significant part of our products' carbon footprint, so more items per shipment, the better. And if customers use a local drop-off point it’s even better.

About the footprint of plastics

Production of plastic emits greenhouse gas (GHG) throughout its lifecycle, from extraction of raw materials, through refining and processing into plastic, conversion into products and finally their end-of-life treatment. 

On top of the climate impact, as plastics are derived from a non-renewable fossil source, the world’s natural capital is also impacted. And throughout its life it can also negatively impact the environment such as soil, land, air, water and living organisms.

The total GHG emissions for the plastics volume converted in the European Union (EU) in 2018 was estimated at 208 million tonnes CO2e by a report published by the European Topic Centre on Waste and Materials in the Green Economy. 

One of the key take-aways in the report is that the majority - 63% - of plastics' GHG emissions is caused during the production phase which includes the extraction of raw materials and its refining and processing into virgin plastic. Converting these polymers into products amounts to 22% of total emissions and plastic waste treatment at end-of-life is around 15%. This is mainly because a huge share of plastics is not recycled but burned at the end of its life. 

What happens to plastic in Denmark?

Denmark is a forerunner when it comes to sorting different waste items. Unfortunately, this doesn’t mean that all plastic is being recycled. In 2016, only 13% of all plastics in Denmark was recycled, 28% was exported for recycling, while 57% was incinerated and 2% went to landfill. 

In 2018, 14% of plastic packaging was recycled and Denmark is already working on increasing recycling rates as the action plan for circular economy illustrates. The target is to recycle 50 percent of plastic packaging waste in 2025.

We wanted to evaluate what our contribution as a company could look like. Hence, we analysed whether a return programme for our empty NØIE packaging could (on paper) help to solve these things.

Here’s what we did.

What do the numbers say?

We first sketched a simple process for a return system. In between the three main steps, is transportation, e.g. from our warehouse to the recycler. In order to calculate the footprint of the overall programme we estimated for each step the CO2 equivalents of 1 kg of plastic.

Based on our assumptions, we estimated that the total CO2e per kg plastics for a return programme in Denmark would be 5.30.

To arrive at the figure of 5.30 CO2e per kg plastics, we used emission factors readily available for some of the steps but also had to work with a few assumptions. See below.

Collection

We're an e-commerce business, so our customers will need to ship back their empty packaging. To calculate the emissions of collection, we multiplied the emission factor per shipment with the average amount of empty products needed to obtain one kilo of plastic. We calculated that the average amount of empty NØIE products we would require to get 1 kg of plastic is 41.1 units. The average emissions per shipment were retrieved via our partner Vaayu.

Our logistics partner will store the collected plastic in their warehouse. We made an assumption for our share in the storage room and how much energy that space will require.

Recycling

The emission factor for mechanical recycling was taken from the ETC/WMGE 2021 report.

Conversion

We took the material processing emission factor for Polypropylene (PP) for conversion of plastic pellets into new packaging or into furniture from Ecoinvent.

Transport

We made a rough estimation of distances based on the assumption that all the actors in our return system are located in Denmark. The emission factor was retrieved from DEFRA conversion factors 2020.

Limitations in our calculations

One limitation that we are aware of but did not include in our calculations is that the collection of 1 kg of plastic packaging will most likely not result in 1 kg of recycled pellets that can be used for new items. For instance, due to empty packaging being contaminated.

Result

To assess whether a return programme would have a positive impact from a carbon footprint perspective, we then compared the 5.30 CO2e per kg plastics from our return programme to the average footprint of the traditional municipal waste management stream, which is 2.27 CO2e/kg plastic and to buying new packaging, which is around 3.82 CO2e/kg plastic.

As you can see, the CO2 footprint of running the return system is higher than the average CO2 footprint of the traditional recycling stream and the option of buying new packaging.

So this means if we want to establish a return programme we would have to reduce the emissions to make it reasonable from a GHG footprint perspective. Luckily there's a way to do that.

What did we do next?

Based on the above calculations and thoughts, we have decided to test a return system in Denmark. In line with circular thinking, we aim to keep resources in the loop and want to ensure that the plastic from our packaging is being recycled and not incinerated.

To reduce the emissions in the collection step we will set a requirement of shipping a minimum of two empty products at a time. With that set up, we estimate the footprint of our return programme to be 3.65 CO2e per kg of plastic (which is lower than buying new plastics). And if customers send more items per shipment the footprint will be even lower. That’s why we encourage our customers to send as many items as possible per shipment. We will also test physical drop-off locations in the Copenhagen area to reduce emissions even further.

The test will run from February to June 2022 and we hope it will help verify the packaging return system as a meaningful way to minimise resource use and give us valuable learnings for a more circular business. Moreover, customers' willingness to return their packaging will also give an indication whether we could move towards reusable packaging in the future.

We're testing the return system in Denmark to begin with. Read all about it here in Danish.