Britain's Costa promises to recycle half a billion coffee cups by 2020

LONDON (Reuters) - Britain's Costa Coffee pledged on Wednesday to recycling half a billion coffee cups a year by 2020 and said it seeks to become the first chain to guarantee it recycles the same number of cups as it puts onto the market.

Less than 1 percent of coffee cups are recycled in Britain, which has led to politicians calling for a "latte levy" on disposable cups. Britain has resisted those calls and instead encourages voluntary measures to limit cup use.

Costa said there was a misconception that coffee cups could not be recycled, and that while the process was more costly, it had reached agreements with five waste disposal firms to guarantee more cups would be recycled.

"We think it's a really neat solution, because it is effective immediately," Dominic Paul, managing director of Costa Coffee, told Reuters.

"It's not directly because of the conversations about the tax. It's something we've been working on for quite a while."

Veolia , Biffa , Suez , Grundon and First Mile are working with Costa on the scheme, which will start in offices, transport hubs and other locations.

Costa said it would pay waste management companies 70 pounds ($100) per tonne of cups collected. Combined with the 50 pounds per tonne they currently receive, it makes it economically viable for the firms to collect the cups.

An additional five pounds per tonne will go to an auditor.

Costa, which is owned by Whitbread , said the costs of the programme would not be material. For the target of 100 million cups for the next 12 months, the estimated cost is just under 100,000 pounds. The goal is for 500 million cups to be recycled by 2020.

The chain competes with companies like Starbucks , Pret a Manger, Caffee Nero and Greggs on the British high street, and Paul said that other firms should join the scheme.

"We think our competitors should join us on this ... It's the quickest way to get a material number of cups recycled," he said.

"If none of our competitors joined us on this, we would still do it ... ultimately that is going to be their decision."

(Reporting by Alistair Smout; editing by Stephen Addison)