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Deposit Return Scheme (DRS)

Are you aware of how the Deposit Return Scheme (DRS) will impact your business? Act now to mitigate increased costs.

What is the Deposit Return Scheme (DRS)?

The DRS is one of the key measures outlined by government in the 2018 Resources and Waste Strategy and in England is scheduled to be implemented after other EPR measures, most likely in 2024. Scotland is due to implement a DRS earlier on 1 July 2022. The aim of the DRS it to increase capture of drinks containers for recycling. Consumers will pay a small deposit on PET plastic bottles, glass bottles and aluminium and steel cans. These can be refunded at a retailer return point or reverse vending machine. Under consultation is whether the DRS should include all containers under 3L in capacity, or only containers under 750ml in capacity.

Am I affected?

The exact detail for the England DRS is yet to be finalised, but all producers of in-scope drink containers will be required to meet a collection target set by government. This will include those who import items to be sold in the UK. Under consultation is a proposal that a 90% collection target for in-scope containers is set after three years, and that the Deposit Management Organisation (DMO) will be legally responsible for achieving it. Scotland meanwhile has clarified some details already.

England DRSEngland - 'All in' or 'on the go'?

The cohort of producers for the England DRS will depend on whether an ‘all in’ approach is taken that will include drinks containers of any size, or if an ‘on the go’ approach is favoured for containers that are under 750ml and sold as single items.

Within the latest consultation, government seeks views as to whether unredeemed deposits should part-fund the DMO, or whether funding should also come from annual producer fees. It’s also suggested that all retailers of in-scope materials will be obliged to host return points, with some exceptions based on proximity to other points and breaching of safety regulations.

Scotland DRSScotland - PET, metal and glass

The Scottish Government have confirmed that all drinks contained in polyethylene terephthalate (PET) bottles, metal and glass will be included, from 50ml to 3l. Mixed material pouches, cartons, HDPE and cups are excluded.

Online retailers will be included in the scheme but will not act as a return point, but they will have to offer a takeback service. Retailers meanwhile can choose to install reverse vending machines (RVMs) to collect the bottles and cans and return deposits. Alternatively, they will have the option to return deposits over the counter and collect the containers manually.

 

 

When is it taking place?

The DRS is planned to be implemented in England in 2024 following the second consultation that closed in June in 2021. The first DRS consultation and summary of responses was published in 2019. Scotland has proposed to implement their DRS in 2022, but are currently considering a delay. Wales and Northern Ireland plan to implement a DRS at the same time as England.
Find out more about the second DRS consultation

How much will the DRS cost?

For the DRS in England, the deposit amount and costs to producers have not yet been confirmed, but the second consultation in 2021 sought stakeholder opinion. The consultation stated that the legislation will ensure the deposit levels can be adjusted – and proposes a minimum of 10-20p, and a maximum of 30-50p.

Scotland meanwhile has already confirmed a deposit cost of 20p with retailers expected to collect a target percentage of DRS containers. The Scottish Government will confirm details soon.

Producer fees will be set to cover costs associated with the logistical, administrative and recycling activities surrounding the DRS. The second DRS consultation seeks views as to how broad these payments should be.

 

 

What do I need to do now?

In order to get the best possible outcome it was important for all stakeholders to respond to the government consultation that closed in June 2021. While we await the consultation response from government, it will be worth thinking about the following:

Product categorisation and tracing

In-scope containers will likely have to be earmarked for the deposit mechanism, for instance via their SKU codes. This will be especially important given the four devolved administrations may have different DRS structures.

Financial and administrative systems

If the deposit is set at 20p, this will have to be traceable to the scheme administrator or Deposit Management Organisation (DMO). It will also be necessary to organise a system whereby consumers are reimbursed for returned packaging, if you have retail premises.

Logistics

If you have a retail site that sells in-scope material, you will likely have to host consumer take back. This may involve installing a reverse vending machine or having a back of store area to keep empty containers. If you are a producer without physical retail sites, you may be obliged to collect scheme packaging from return points.

The DMO, if implemented, would be responsible for managing financial flows, including producer fees, logistics, and potentially infrastructural activities such as maintaining reverse vending machines. If this were the case, the logistical and administrative responsibilities above may be alleviated.

 

 

We are here to support you

If you think you could be affected by the Deposit Return Scheme, we can assist you through data assurance and analysis, including cost forecasting to model how your business will be impacted so that you can be fully prepared.
Request DRS support now

Future services and support

We are developing further services to support our members with the future requirements of the DRS and are working with government and industry to seek further clarification on the mechanics and requirements of the system. We will continue to offer guidance as legislation is updated and we will let our members know what further support we will provide in the future.

Find out more about packaging EPR

Discover if other Extended Producer Responsibility measures will impact you, including the Plastic Packaging Tax and modulated fees.
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