The UK Government’s new Deposit Return Scheme

On Thursday 25 April 2024 the UK government, the Department of Agriculture, Environment and Rural Affairs (DAERA) in Northern Ireland, the Scottish Government, and the Welsh Government published a joint policy statement to update stakeholders on plans for each nation’s long-awaited Deposit Return Scheme (DRS) for drinks containers. 

All four nations have previously consulted on plans to implement a Deposit Return Scheme (DRS) for drinks containers. Initially, Scotland planned to launch its DRS in April 2021 however this was hit with a series of setbacks, and until this latest announcement, all four nations had intended to implement their DRSs in October 2025.   

Local Partnerships’ Resource Efficiency and Circular Economy (RECE) Team in Wales is supporting the Welsh Government to deliver its Circular Economy programme.

Here, Local Partnerships’ Director in Climate, Louise Cowan outlines what the latest DRS announcements mean for the public sector. 

What has been announced?

The 4 nation policy statement announces a revised go-live date of October 2027 across the whole of the UK. The timelines have been reset to allow business more time to prepare for DRS and to support industry to form Deposit Management Organisation (DMO) candidates.  

The statement outlines details of the commonalities (joint positions) between all four nation’s DRS which will make it more straight forward for consumers, retailers, and producers to participate whilst meeting the specific needs of each nation and recognising the devolved nature of waste and recycling policy. 

The joint policy statement describes that Polyethylene terephthalate (PET) plastic drinks bottles and metal drinks cans that are 150ml – 3L will be in scope across the whole of the UK. These containers will be excluded from disposal cost fees and labelling obligations under Extended Producer Responsibility for Packaging which is due to commence in October 2025. 

The position on glass drinks bottles has been set out in separate statements issued by each nation. At the time of writing Defra had confirmed that glass bottles will not be in scope of the DRS in England and the Welsh Government had restated that glass bottles will be in scope of the DRS in Wales, building on its status as an already high performing recycling nation. Announcements from DAERA and Scottish Government are expected imminently. 

Whilst the DRS will initially target only single use drinks containers, the statement announces that governments will work with industry to support voluntary trials for reusable and refillable drinks containers. 

How will the DRSs operate?

Deposit Management Organisations (DMOs) will be established to operate the DRSs on behalf of drinks packaging producers.   

Consumers will be charged a small deposit when they purchase a drink packaged in an in-scope container. The deposit will only be refunded when the consumer returns the empty container to a return point. The DMOs will collect the empty drinks containers for recycling into new drinks containers. 

The DRS will be funded by producer fees, unredeemed deposits, and revenue from the sale of recycling. 

What benefits will DRS deliver?

Local Partnerships’ Resource Efficiency and Circular Economy (RECE) Team is supporting the Welsh Government to analyse the costs and benefits of the DRS in Wales. This analysis will support the Welsh Government to bring forward legislation to the Senedd.  

Local Partnerships’ analysis and support to the Welsh Government means that we are exceptionally well versed in the expected costs and benefits of DRS. 

What is meant by “interoperability across the 4-nations”?

The 4 nation paper describes the commonalities between all 4 nation’s DRS which will make it more straight forward for consumers, retailers, and producers to participate.

These interoperability commonalities include:

• Consistent deposit levels across the UK
• Consistent drinks container labelling requirements across the UK
• Consistent sizes of drinks containers that are in scope across the UK, and consistent also with the Republic of Ireland.
• Reciprocal requirements which require each nation’s DRS to accept returned PET and metal drinks containers that were sold in another part of the UK and to refund the associated deposits.
• A single registration and reporting process for drinks producers (rather than a separate one for each nation).

What does this mean for the public sector?

Public sector landowners should expect to experience less drinks container litter and may therefore incur lower clean-up costs. 

Public sector retailers such as cafes and canteens will need to charge customers the deposit, display signage and establish themselves as a return point (urban retail premises that are 100m2 or less will not be required to operate a return point). In the lead up to the DRS, these retailers should ensure that their Standing Financial Instructions and their cash desk systems provide a mechanism for deposits to be refunded. 

Public sector estates such as hospitals and universities should support their onsite retailers and facilities management teams to establish return points. On estates with multiple small retailers, it may be more practical to establish centralised reverse vending machine (RVM) return points which operate on behalf of the small retailers. The 4 nation paper provides details of the permitted development rights for RVMs across the UK, with Welsh Government planning to undertake a consultation to inform infrastructure planning in Wales. 

We expect that the Deposit Management Organisations (DMOs) will create a mechanism which gives consumers the option to donate their deposits to charitable organisations; this could hugely benefit public sector charitable partners. We expect more detail to be provided when the DMOs are established. 

What does this mean for local council waste collections? 

From October 2027 the DRS will incentivise consumers to return their empty drinks containers to retailer return points, meaning that kerbside arisings will decline. We encourage councils to: 

1. Conduct a readiness and opportunities review 

Implications for councils will vary so it’s important to first assess your readiness for the changes.  

The readiness and opportunities review should be forward looking and consider the suite of policy reforms alongside DRS as there are nuanced and complex interdependencies. This includes extended producer responsibility (EPR), Simpler Recycling (England only), digital waste tracking and the emissions trading scheme (ETS).

Undertaking a mapping exercise of your existing services against forthcoming legislation allows you to identify the touch points across:  

• waste arisings and composition
• service design (materials, containment, vehicles and frequencies)  
• infrastructure  
• contracts 
• budgets / funding 

The readiness aspect of the review provides a clear understanding of which areas of your service will be impacted by forthcoming legislation and how they may be impacted. The opportunities aspect of the review identifies where there is the potential to make changes, for example to optimise collection efficiency (such as rerouting or reconfiguring collection vehicles).  

2. Develop your strategy

Many councils have been holding off their strategic forward planning, understandably waiting for more certainty around the legislative framework in which they will be delivering services. Now is the time to develop your long-term strategic vision to maximise reuse, minimise waste and drive-up recycling rates. Developing an evidenced-based and innovative strategy provides you with the framework for future decision making.

3. Consider the business case for change and procurement strategy  

With a clear vision for the future of your service the development of a business case provides the framework for structured thinking and assurance to identify the preferred way forward for delivery of service improvements and potential procurement strategies. It allows you to take account of legislative requirements, moving towards a more circular economy, alignment to net zero targets, affordability, and public value. 

Local Partnerships will be providing support to our public sector colleagues as we move forward on the critical journey to greater resource efficiency. We offer expertise across strategy development and implementation, service design and options modelling, business case development, contracts, procurement support and infrastructure.