Deposit Return Scheme Q&A

Questions relating to the delivery and operation of the Deposit Return Scheme (DRS) for drinks containers have been fielded by teams over the past four months via the Business Readiness Forums, Local Authority Engagement Forums, and the mailbox. 

This article and Q&A applies to England, Northern Ireland and Wales. 

The answers below cover the most recent responses to DRS queries. Earlier Q&As can be accessed here:

• CPR Newsletter 14 April 2023 covering deposits and finance, labelling, enforcement and fraud, local authorities, hospitality, return points and deposit management organisations. 
• CPR Newsletter 16 March 2023 covering alignment across the nations and digital. 
• CPR Newsletter 24 February 2023 covering VAT and nations working with industry.
• CPR Newsletter 6 February 2023 covering materials in scope, nation alignment, takeaway coffee cups, aluminium bottles and labelling.

Targets 

Question: How were the Deposit Return Scheme (DRS) collection target rates determined?   

Answer: We consulted on different options for collection targets, with most respondents supporting the collection target being phased in at 70% in Year 1, 80% in Year 2, and 90% in Year 3 onwards. This follows best practice with similar international schemes achieving collection rates of 90% or higher. 

Question: When will the year 1 collection target come into place?  

Answer: The reporting period for collection targets will be based on a calendar year, commencing on 1 January of a given year, ending on 31 December. 

Question: Will collection targets be determined by material or total containers on the market? 

Answer: The collection targets will be calculated based on total containers placed on the market, and a minimum amount must be collected for each material. 

Circular economy 

Question: Will there be a first right of refusal for producers? 

Answer: The regulations will provide for producers to have the right of first refusal on DRS material after collection in an equivalent proportion and in the same material to that which they supply.  

Question: How will DRS collected material be sold to recyclers? Will these be sold on a spot basis, or will a long-term contract be set up with recyclers? 

Answer: It will be for the Deposit Management Organisation (DMO) to arrange for the sale of collected materials. 

Question: How will you ensure material is recycled? 

Answer: We will specify in the regulations that the DMO must ensure that material collected via the scheme is passed on to a reprocessor for recycling and is able to evidence this upon request by the regulator. 

Question: What can the DMO do to ensure recycling rates don’t reduce after DRS is introduced?  

Answer: We want the DMO to have the flexibility and controls required to support it in meeting its statutory collection targets set out in regulations. A key lever to help the DMO meet its collection targets is setting the deposit level.  

The regulations enable the DMO to set the deposit level, which will consider environmental, social and economic factors and the impact on affordability for consumers. The DMO will be able to set either fixed rate or variable rate deposits (which could vary by drinks container size, format or material type).   

Other waste reforms 

Question: Why do we require a separate DRS scheme when most drinks containers are currently collected at the kerbside by household waste collectors? 

Answer: There are benefits from a DRS that you cannot get through kerbside collection alone. The DRS will create a high-quality stream of recyclable material, promoting a circular economy and reducing reliance on virgin material.  

Litter from drinks containers included in the DRS scheme is expected to substantially reduce while recycling rates significantly increase.

Most local authorities already collect the in-scope drink containers, but recycling rates for them in the UK are around 70%, leaving around four billion plastic bottles and 2.7 billion cans not recycled each year. A DRS in England, Wales and Northern Ireland is expected to increase these collection rates to more than 90%.

Question: How would DRS work alongside existing kerbside collections? 

Answer: Consumers can still return empty drinks containers in their kerbside recycling, but they would forego the deposit. For containers that end up in kerbside collections, local authorities, and where relevant, waste operators, will be able to separate out containers and redeem the deposit on them (provided they meet the criteria for return).  

We anticipate the DMO working closely with local authorities, to ensure as much material is returned as possible via return points, to help meet collection targets and keep material within the closed-loop model of the DRS.  

Question: Have you assessed the carbon impact of people driving to collection points compared to the impact of collecting them at the kerbside? 

Answer: As with many international examples of deposit return schemes, we would expect most people to return their DRS material (and redeem their deposit) at the same time they would be going shopping, so there would not be a significant difference to the number of journeys. 

Scope 

Question: Are corks in the DRS or to be reported under EPR for Wales or Scotland?  

Answer: A DRS item would include its lid or closure, so where corks are used to close a glass bottle in Wales, this would be included within DRS. 

Question: Does the Welsh Government have a plan to work with local authorities to avoid them removing glass from the kerbside as we have seen in from some councils in Scotland?  

Answer: The Welsh Government has an on-going dialogue with Welsh local authorities on the impact on the range of reforms it is progressing. This includes the Deposit Return Scheme, packaging under Extended Producer Responsibility, and new obligations for businesses to separate waste for recycling.   

Question: Will the scope of a DRS be expanding to include other materials in the future?  

Answer: Regular review of the DRS will provide the opportunity for Government to monitor and evaluate how the scheme is performing. 

Other 

Question: What happens to damaged or unsold containers which have not been sold to the public but where the producer will have paid deposits and producer fees  

Answer: We expect the DMO to provide guidance on how such containers will be managed in the scheme.   

Question: Will the DRS include products that are not drinks containers? 

Answer: No, the Deposit Return Scheme (DRS) is focused solely on drinks containers. Evidence suggests that a DRS is most appropriate for items that we regard as difficult to manage at end of life, are not typically recycled or are frequently littered or fly-tipped. EPR will capture other types of packaging. 

Question: EU Guidance calls for 12 months’ transition once the details are known, Industry needs 12 months minimum to correct transition to a DRS. What are the timelines for implementation?      

Answer: In the next phase of DRS, we will be finalising the legislation and taking steps to ensure it will work in practice. The legislation will go through clearances before it can be laid in UK Parliament and the Welsh Senedd. We aim to have the regulations in Parliament by the end of 2023.  

We will then appoint the Deposit Management Organisation (DMO) with the intention of announcing it by summer 2024. 

Once the DMO is appointed, they will then set up its governance, recruit staff and make any initial decisions.

Following this, industry can start to prepare for the DRS requirements which includes making labelling changes to products and rolling out reverse vending machines.  

Delivery of DRS is scheduled from 1 October 2025. 

Question: There are a lot more than retailers selling drinks such as train stations, airports, leisure centres etc. How will these industries be included in the schemes? 

Answer: As well as retailer return points, anyone wishing to host a return point will be able to apply to the DMO to become a voluntary return point operator through an application process set out by the DMO.