Deposit Return Schemes | All you need to know

Deposit Return Scheme | All you need to know

Contents

What is a Deposit Return Scheme (DRS)?

Deposit return schemes are used worldwide to encourage more people to recycle drinks containers, such as bottles and cans. They work by charging anyone who buys a drink a small deposit for the bottle or can that it comes in. Consumers can then get this money back when they return the bottle or can to a collection point to be recycled.

Anyone who retails the materials confirmed in the scheme may have to act as a return point. Typically, retailers accept, and process returns automatically through a ‘reverse vending machine’ or manually using a collection bag in-store. The containers are then collected and recycled, supporting bottle-to-bottle use of materials.

What are the main objectives of DRS?

Plans for a Deposit Return Scheme (DRS) could transform how we collect and recycle our used drinks containers. The intended effect of introducing a DRS is to change the behaviour of consumers, producers and retailers to deliver a significant change in the capture for recycling of empty drinks containers and the incidence of litter.

Along with plans for Extended Producer Responsibility (EPR) reforms, it has enormous potential to address the litter crisis and create a more circular economy, meaning that valuable materials are retrieved and reused rather than ending up in a landfill.

The key objectives of introducing a DRS are to increase recycling of drinks containers in the scope of a DRS; collect higher quality recyclate; create greater domestic reprocessing capacity through providing a stable and high-quality supply of recyclable waste materials; and a reduce litter and associated litter disamenity.

Estimates suggest that over 8 billion drinks containers are wasted across the UK annually – meaning they are landfilled, incinerated or lost into our waterways.

When is DRS due to start in the UK? 

Already used worldwide in various forms, the UK government is planning the roll-out of their own DRS initiative.

One of the main challenges currently facing implementation in the UK is that England, Wales, Scotland, and Northern Ireland are moving at different speeds and appear to be taking different approaches.

Scotland is currently ahead of England, Wales, and Northern Ireland, having settled on a national ‘return-to-retail’ scheme for single-use containers made of PET, steel, aluminium or glass, with a deposit of 20p per container.

They have established the necessary legal framework in their Deposit and Return Scheme for Scotland Regulations 2020, which the Scottish Parliament passed in May 2020. They have appointed Circularity Scotland as their scheme’s administrator. As a result, Scotland will be the first of the four nations to launch a DRS, which is due to start on 16th August 2023. You can now start the producer registration process with Circularity Scotland here. Registration must be complete by 28th February 2023. Direct registration with the Scottish Environment Protection Agency (SEPA) is also permittable if producer arranges own collections and fufils their reporting requirements themselves to SEPA. Full details can be found here.

A DRS for beverage containers will start in England, Northern Ireland and Wales by October 2025 at the earliest. 

  1. Northern Ireland

The government is considering proposals to introduce a DRS by October 2025

  1. Scotland

The Scottish government has regulated for a DRS to start in August 2023 that includes PET plastic, cans and glass

  1. England

The government is planning to introduce a DRS by October 2025

  1. Wales

The government is planning to introduce a DRS by October 2025

  1. Republic of Ireland

The go-live date is February 2024 and includes PET beverages bottles and aluminium and steel beverage containers with a capacity of 150ml to 3 litres.

What does this mean for my business? 

The UK’s Deposit Return Schemes will affect the following:

  • UK-based beverage brand owners
  • Beverage container fillers
  • Importers of beverage containers owned by a non-UK brand
  • Retailers of single-use beverage containers

If your business falls into one or more of the above categories, it will be required to participate in the DRS. This will involve paying a producer fee to cover the costs of setting up and operating the DRS (excluding any material revenues and unredeemed deposits) and handling fees to cover the costs of those operating return points for DRS containers.

We understand the challenges involved for businesses operating a national estate in dealing with legislation changes implemented in one country of the UK before another. Scotland has confirmed that PET bottles, Steel and Aluminium cans and Glass drinks bottles will be included, and deposits will apply for drinks containers from 50ml to 3 litres. They have also opted for a flat 20p deposit for each container. 

Following the recent EPR consultation release, it is defined that glass will fall under EPR, not DRS, in England and Northern Ireland and that glass will fall into DRS in Wales. All countries are also opting for an all-in scheme (50ml – 3 litre).

How will the scheme be managed?

Materials which are part of the scheme belong to the scheme administrator, and a separate collection system will be implemented for these materials by the Scheme Administrator. A preferred logistics partner will collect these from your site should you be obligated to operate a return point.

The operational management of the new recycling network will fall to a Scheme Administrator, which will likely be representative of producers.

For brands, it could be worth designating a DRS specialist within the team to stay abreast of developments, and connect with other drinks producers and retailers in a similar position.

How might direct-to-consumer sales channels change?

If the scheme comes into effect, brands will likely be expected to provide a means for returning drinks containers even where not sold via a third-party retailer.

For direct-to-consumer channels, this could mean setting up a takeback service that collects containers from a consumer’s doorstep. It’s worth considering how such a service could be integrated into your current supply chain.

The roll-out of a DRS scheme might be more than two years away, but with responsibility likely to fall to producers themselves, it is critical to start thinking about its potential impact now.

There’s a lot to think about in relation to the DRS, and Ecoveritas can offer advice on this new scheme and all aspects of your supply chain.

If you have any questions or would like to chat through any concerns, get in touch with our team today, and we can help you.

How will it operate in England, Wales, and Northern Ireland? 

The deposit return scheme has received strong support as outlined in the government response. Defra will work with industry, Welsh Government, and the Department of Agriculture, Environment and Rural Affairs in Northern Ireland, to now set up the scheme. The expected start date for the scheme is 1 October 2025.

For our customers who sell in-scope materials, this means:

  • The Deposit Return Scheme will be introduced from October 2025.  
  • Single-use drinks containers from 50ml to 3 litre containers will be in scope of the Deposit Return Scheme. 
  • Polyethylene terephthalate (PET) bottles, steel cans and aluminium cans will be included for England, Northern Ireland, and Wales. 
  • Glass bottles will be included for Wales only.  
  • A Deposit Management Organisation will be appointed to manage overall operation of the Deposit Return Scheme.    
  • Retailers selling in scope containers in store will be required to host a return point, where consumers can return the empty container and be given their deposit refund, subject to some specific exemptions that retailers can apply for. Where containers are sold online, we intend to require large grocery retailers to offer consumers a takeback service for those containers. 
  • The consultation response presents further detail that will be set out in legislation. This legislation will place obligations on producers of in scope drinks containers, retailers and the Deposit Management Organisation.  

What is the role of the Deposit Management Organisation?  

  • The Deposit Management Organisation (DMO) will be responsible for managing the overall operation of the Deposit Return Scheme. The DMO will be appointed by Government through an application process.  
  • The Deposit Management Organisation will be an industry-led organisation. The DMO will be made up of a consortium of industry representatives with membership of organisations which represent drinks producers, retailers, importers and logistics.  
  • The DMO will be required to ensure the collection targets are met. The collection targets will be introduced in a phased manner. In year one, at least 70% of in-scope containers that producers place on the market must be collected. In year two, this will increase to 80%, and then 90% from year three onwards.  
  • The DMO will be responsible for setting the deposit level.  

Size of container

On size of containers in scope of the scheme, the UK government and the Department of Agricultural, Environment and Rural Affairs in Northern Ireland consulted on either an all-in scheme (including drinks containers up to 3l in size) or an on-the-go scheme (drinks containers under 750ml in size and excluding those containers sold in multipacks), with the Welsh Government consulting on an all-in-scheme. Most consultation responses were strongly in favour of an all-in DRS with many respondents pointing to improved environmental outcomes and ease of understanding for consumers. Defra, Welsh Government and the Department of Agriculture, Environment and Rural Affairs in Northern Ireland have decided to implement an all-in DRS in relation to the size of containers in scope. Therefore, single-use drinks containers containing at least 50ml and up to 3l of liquid will be in-scope of the DRS across the three nations. This will include containers sold both individually and as part of a multipack.

Materials

On the types of materials to be included in the DRS, the consultation proposed that the scheme would include polyethylene terephthalate bottles, steel and aluminium cans, and glass bottles.

Consultation responses and engagement with stakeholders has been mixed regarding the inclusion of glass. Some cited the benefits of including glass, such as tackling a key source of litter, providing a key recyclable resource, covering as wide a range of materials as possible, and reflecting that most international DRS do include some drinks in glass bottles. Some stakeholders also suggested that the inclusion of glass in the DRS could reduce the likelihood of any material switching between packaging formats.

However, some consultation responses raised concerns over glass, including increased handling costs and equipment complexity. Reverse vending machines will need to be emptied more frequently and will carry additional safety risks associated with handling broken glass in retail environments. For retailers offering a manual take-back service, glass bottles will require more space to be stored safely which could disproportionately impact on small retailers. In addition, points were raised regarding the weight of glass and the potential for breakages posing increased inconvenience for consumers.

Having reflected on these points following the consultation, the materials captured in the DRS in England and Northern Ireland will be drinks containers made from polyethylene terephthalate plastic, steel, and aluminium. Glass bottles will not be captured by DRS in England and Northern Ireland as the respective governments believe the addition of glass will add additional complexity and challenges to delivery of DRS, in particular for the hospitality and retail sectors, as well as additional consumer inconvenience. Given concerns raised on managing glass in a DRS, delivery of the scheme will focus on plastic bottles and aluminium/steel cans in England and Northern Ireland.

Whilst not in scope of the DRS in England and Northern Ireland, glass drinks bottles will be covered by the Extended Producer Responsibility for packaging scheme in both nations, which will place targets on producers in relation to glass recycling. Northern Ireland will keep under review the inclusion of glass when the DRS is fully operational to ensure glass beverage containers are meeting the relevant recycling targets. England and Northern Ireland welcome continued engagement with the glass sector on how glass recycling rates can be improved through kerbside collections.

In assessing the range of materials to be included, the Welsh Government has considered the impact of a DRS against the baseline recycling rate in Wales, and the statutory requirements of the Well-being of Future Generations (Wales) Act 2015 alongside the overarching commitments to become a net zero carbon and zero-waste nation by 2050. Acknowledging the consultation responses advocating for the inclusion of as wide a range of materials as possible and also advances in digital DRS technology solutions that could allow bottle deposit return via existing kerbside collection infrastructure thereby reducing the reliance on return to retailer reverse vending machines, against a higher baseline recycling rate the inclusion of glass provides an overall better rate of return from the economic impact assessment of the scheme in Wales. Welsh Government is therefore progressing with the option as set out in the consultation to introduce an all-in DRS in Wales which includes polyethylene terephthalate plastic, steel and aluminium cans, and glass bottles.

For information, the materials in scope of the DRS in Scotland are polyethylene terephthalate plastic, steel and aluminium cans, and glass bottles.

Finally, the consultation explored the inclusion of the cap as part of the in-scope drinks container. When returning containers to a return point, consumers across all three nations will be required to keep containers intact. However, redemption of the deposit will not be dependent on the cap being returned with the container. Caps/lids are more likely to be removed or misplaced. An obligation to return the bottle with the cap could, therefore, result in less in-scope material being returned where the cap has been misplaced. Consumers will instead be encouraged to return the container with the cap/lid attached. This will increase the recycling rates of materials used in the cap and reduce littering.

Next Steps 

  • Regulations are being developing for the Deposit Return Scheme which reflect the policy outcomes set out in the consultation response. The Governments will take secondary legislation through the UK Parliament and the Senedd in Wales. 
  • Deposit management Organisation appointment: We intend to shortly begin engagement with prospective consortia interested in being the DMO. Later in the process, UK Government. Welsh Government and the Department of Agriculture, Environment and Rural Affairs in Northern Ireland will formally invite applications for the DMO as part of a fair and open process. 

How will it operate in Scotland? 

For our customers who sell in-scope materials (Scotland only), this means:

  • You will pay the deposit on stock falling in scope from suppliers when you purchase drinks containers made of PET, Steel and Aluminium and Glass
  • Charge the deposit when selling in-scope products
  • Display the deposit value separately from the product price
  • Clearly display information about how to redeem the deposit in-store
  • You will have to act as a return point either via a manual return or the use of a Reverse Vending Machine (RVM) (unless exemption is approved*) When operating as a return point, you will receive a handling fee from the scheme administrator**

*Exemptions are now open for Scotland: Full details can be found here

**All handling fees below are for Scotland only and applicable to businesses operating as a return point for the scheme.

  • Manual Takeback handling fee – 2.69 pence
  • Reverse Vending Machine handling fee – 3.70 pence (up to 8,000 units per week) 1.60 pence thereafter
  • Closed Loop Hospitality 0.13 pence
  • Online Takeback – to be determined

What data is required

Producer data includes:

  • The EAN/GTIN or barcode number
  • The type of drink it is, i.e. soft drink, wine, spirit
  • A long description for each product – as a suggestion this could be: • Brand_Product_Product Type_Volume e.g. CSL_Fizz_Can_330ml. The long product description must not be more than 50 characters long
  • A short product description for each product – this is for display on reverse vending machines and receipts and should be no more than 12 characters
  • The type of barcode for each product between EAN-13 format and EAN-8 format. Note that these must be GS1 compliant
  • The type of packaging for each product between bottle or can
  • Whether each product has a DRS logo, description or no DRS identifier
  • Whether you are the producer or importer for each product
  • The VAT rate of each product
  • Whether you as the producer are identified on the packaging either by name and address, a brand or trademark, or no identification. If by brand, the brand name will be required. If the address detailed on the packaging differs from those already provided, you will be asked to provide the address on the packaging
  • For each product you must provide the EAN category, this shows Circularity Scotland if each product will only be sold in Scotland, sold UK-wide, has a new barcode, or will retain the current barcode when the scheme goes live.
  • The material each product is made from; steel, aluminium, glass or polyethylene terephthalate (PET)
  • The colour of the packaging
  • Weight, height, width and volume of each container
  • The annual forecasted sale by product. The forecast is for the number of individual scheme articles that will be put on the market in Scotland, so multipack items should be reported by number of containers, not number of packs

Pack dimensions

The pack needs to be within certain size range for reverse vending machines. Circularity Scotland may require pack dimensions six weeks prior to launching, to ensure that packaging can be processed and that the product file is updated to allow returns to be processed. For existing products Circularity Scotland will focus on outlying products in terms of shape/sizing.

How will it operate in Republic of Ireland? 

For our customers who sell in-scope materials (ROI only), this means:

  • Go live date 1st Feb 2024
  • It will apply to PET beverages bottles and aluminium and steel beverage containers with a capacity of 150ml to 3 litres.
  • DRS CLG trading as Re-Turn are the scheme operator
  • DRS obligations apply to producers (including importers) and retailers (including online) of obligated single-use beverage containers.
  • Deposit rate and fees should be published end Nov 2022

Producer obligations

  • Register with scheme from Nov 2022
  • Submit product data Jan – March 2023
  • Ensure products are labelled and ROI bar code (details of this labelling to follow)
  • Add deposit to price of products
  • Submit data to scheme in formats tbc
  • Pay producer fees

Retailer obligations

  • Register with scheme from Nov 2022
  • Provide return option for in scope beverages – manual or RVM
  • Will be paid a handling fee to cover costs
  • Display certificate of registration
  • Charge deposit on in scope drinks
  • Display deposit value separately from product price
  • Clearly explain how to redeem deposit – must include option for cash refund
  • Scheme will arrange collections, all material owned by scheme
  • Data submission Jan each year

What data is required

  • Product brand and flavour
  • Pack size
  • Material
  • Number of individual scheme articles that will be put on the market

Pack dimensions

  • The pack needs to be within certain size range for Reverse Vending Machine. Any unusual shapes need to be sent to Re-Turn for approval
  • Barcode (including on individual multipack cans)
  • There are some design specifications that must be met by 2024, including no PVC sleeves, black or multilayers etc. to improve recyclability

*Full details on Ireland’s new Deposit Return Scheme can be found here

Partner with a specialist

Businesses should partner with a packaging data specialist who can consistently deliver a highly efficient and transparent service without the need to scale up to meet the requirements.

Ecoveritas offer global data collection and analysis services that can be combined with compliance, guidance and consultancy support. Our range of tools and expertise help businesses navigate the rules of the new legislation. With support, businesses can continue operating competently, competitively and with complete confidence.

What is Ecoveritas?

The easiest and most comprehensive way to manage environmental data and reporting needs.

What does Ecoveritas do?

Ecoveritas is an environmental compliance data specialist that provides a range of tools and expertise to brands, retailers, and supply chains to minimise the environmental impact of their packaging efficiently.

To meet the complex challenges of managing environmental compliance reporting, Ecoveritas offers a unique combination of consulting, data and software that helps companies around the globe take the next step in their sustainability journey.

Our team takes a fresh approach to the environmental compliance market by adding years of supply chain and technical development expertise to an experienced environmental data team to provide SaaS-based services.

Our mission is to make it easy for companies to understand their obligations, get compliant and respond appropriately through reduction, substitution, and recycling.

Ecoveritas’ services

  • Extended Producer Responsibility Data Management & Reporting
  • Plastic Tax Data Management & Reporting
  • EPR Horizon Scanning
  • EPR Consulting
  • Ecoveritas can help you prepare your packaging for EPR and get ready to record data from 1st January 2023.

Navigating environmental legislation is time-consuming. For businesses operating across numerous countries, the issue is even more complex.

If you are new to DRS, please speak to one of our advisors on +44 (0)1865 721375 to find out how we can help you take the complexity out of environmental compliance!

 

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