Material Cost Differentiation (MCD) Methodology

If you haven't been a part of the Material Cost Differntiation(MCD) consultations conducted by CSSA, its time to get acquainted. MCD is a proposed new methodology to determine the cost of materials on the recycling system, a major factor in determing your fees as a steward.

CSSA has proposed to replace the current (and outdated) Activity Based Costing methodology with MCD. It sounds complicated, and it is, but stripped down things are simple to understand. The new Material Cost Index (MCI) is an index of the relative impacts of materials on the cost of the recycling system. It is an input to the CSSA 4 step fee setting methodology. The MCI is applied in step 1 of the Four Step Methodology:

Step 1: Allocate the gross cost of the recycling system (this is where the MCI will be applied)

Step 2: Allocate the commodity revenue earned by the recycling program (how much can they sell your recycled material for)

Step 3: Allocate the program management costs of the stewardship program (your share of the program cost)

Step 4: Allocate the promotion an educaton and/or market development costs (your share of the consumer education costs)

How Will MCD Impact My Fees?

CSSA has provided information about how the MCI is determined. You can review the information and a video that is quite succinct at the bottom of this page https://www.cssalliance.ca/mcd/(link is external). If you're wondering how this will impact your fees CSSA provides some guidance through excel calculators which can be downloaded here:

Recycle BC MMSW MMSM Stewadhsip Ontario

It's possible your fees could go up or down. This is because the measured cost impacts of your mix of materials may have changed. However, the MCI is just step 1 of of the 4 step fee setting process.

We understand you want to predict with a high degree of accuracy your fees in future years but it may be too time consuming to do so. Greenstreets, on the other hand, is doing this already. Through our purpose built software, GRIPs, we can analyze large volumes of data quickly to not only help you better manage increasing fees, but better understand your packaging from a sustainability perspective. If you'd like to take control of your fees please get in touch. We would be pleased to walk you through how our turn-key Stewardship Reporting Service can save you time, money and headaches.