Goals five and six of the UK's Environmental Improvement Plan 2023 (the EIP) set out the Government's aims to maximise our resources, minimise waste, and use resources from nature sustainably. In our Green Matters insight series, we looked at each of the goals in the EIP in some detail and highlighted the planned introduction of a Deposit Return Scheme (DRS) from October 2025. The scheme is intended to boost recycling through financial incentives and will have a significant impact for those in the retail and food and drink sectors, in particular.

In this article, we take a closer look at the proposed scheme, how it will operate under the current proposals and key considerations for businesses.

Background to the proposed scheme

The Department for Environment, Food & Rural Affairs (DEFRA) has had two consultations on proposals for a DRS. The first, in 2019, explored the design and scope of a DRS model, which we discussed in an earlier article on planned changes to packaging laws in the UK. The outcome of the second discussed the delivery of DRS for single-use drinks containers[1]. Both consultations stress the Government's objectives to promote a circular economy where waste materials are re-used, recycled or re-circulated.

RECOUP's UK Household Plastic Packaging Collection Survey 2022 estimated that 14 billion plastic bottles are used each year in the UK. That's more than 38 million plastic bottles every day – more than 1.3 bottles per household per day. The consultation estimates that current recycling rates in the UK are around 70% for drinks containers. The consultation response sets out a target to introduce a phased collection target to achieve 90% recycling of drinks containers within three years of implementation (70% in year 1, 80% in year 2 and 90% in year 3).

How will the DRS work under the current proposals?

The DRS will cover single-use containers between 50ml and 3l, including plastic bottles, steel and aluminium cans. The DRS will incentivise recycling through financial incentives, with the consultation response proposing a minimum financial incentive of 20p per such item. This means that when you buy a drink in a single-use container, you will pay a 20p deposit, which you get back upon returning your empty bottle or can.

The Government proposes to set up a Deposit Management Organisation (a DMO), which will be responsible for implementing the DRS. It also intends to introduce regulations (the DRS Regulations) using its powers under the Environment Act 2021. The DRS Regulations will set out the criteria for how the DRS will operate, including the requirements on manufacturers to include a DRS logo on their packaging to confirm if the product is part of the scheme.

The Government seeks to promote the use of smart technology to maximise the delivery of the DRS. In addition, it intends to introduce regulations that will amend permitted development rights to allow for the installation of reverse vending machines for DRS deposits.

What are the timescales for implementation?

The consultation response sets out the following implementation timeline for the DRS:

  1. Phase 1: the Government proposes to introduce the DRS Regulations by the end of 2023 and appoint a DMO by October 2024.
  2. Phase 2: DMO set up stage, which will include establishing staffing, financing, design and labelling requirements for the DRS (after October 2024 and before implementation)
  3. Phase 3: DRS roll out stage will involve setting up logistics and delivery partners, and launching communications campaigns (after October 2024 and before implementation).

The earliest proposed implementation date for the DRS is 1 October 2025.

The Scottish Government has introduced its own DRS, which is intended to start in August this year. The scheme has been seen by some as a good litmus test for the DRS for England, Wales and Northern Ireland.

Key considerations for businesses?

A DRS scheme will aim to make significant inroads into recycling the 14 billion plastic drinks bottles and nine billion drinks cans that the UK consumes every year. Putting this in place will mean establishing new supply chains and will also present new duties and opportunities for retailers, who will most likely be administering the scheme.

While it will be some time until the new scheme is in place, it is important for businesses to prepare now and assess what impact this could have on their design, production and operations in general. We will be keeping a close eye on the implementation of the DRS Regulations when they are published and will provide further updates in due course.

If you would like to speak to us about any sustainability issues presented in this article, including your company's management of waste or plastics, please contact either associate ben.sasson@gowlingwlg.com or sustainability partner ben.stansfield@gowlingwlg.com.

Footnote

[1] Introducing a Deposit Return Scheme for drinks containers in England, Wales and Northern Ireland - government response (publishing.service.gov.uk)