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Deposit Return Scheme blog

2nd October 2017

Martin Hyde

The Comply Direct Deposit Return Scheme blog brings the latest news and discussions regarding the development of Deposit Return Schemes (DRS) throughout the UK.

England begin to consider a Deposit Return Scheme

Posted: 2 October 2017

The Scottish and Welsh governments are already considering deposit return schemes, and on Monday 2 October at the Conservative Party conference, Michael Gove the Environment Secretary made a statement of intent that he is in favour of implementing some form of deposit return scheme in England.

The working group on recycling is due to consider how such a scheme might work in England and report its findings toward the end of 2017.

Scotland's Deposit Return Scheme

Posted: 6 September 2017

Will Scotland’s Deposit Return Scheme work?

In the Government’s Program for Scotland published on 5 September, the Scottish government has confirmed its plan to introduce a Deposit Return Scheme for drinks containers. This could have huge implications for Consumers / Retailers and the waste industry alike.

So, what is a Deposit Return Scheme?

Simply put, a Deposit Return Scheme (DRS) levies a small deposit on certain products with the money being paid back to the customer on the return of the empty packaging. The concept has been around for many years and many European Countries have active deposit return schemes in place. The UK previously did have a similar system in place for glass bottles, however, the rise of plastics and the lack of incentives for manufacturers to use recycled material, led to the demise of this system in the 1980s.

Research by the Scottish government last year, followed by an opinion poll has helped to support the development of a potential DRS. 78% of people polled in Scotland were in support of a DRS.

How would this work?

Although the key specifics as to how the Scottish system will be run have not yet been released, it is highly likely that when you pay for products in plastic bottled packaging, a small deposit fee will be pre-calculated into the cost of the item (however this could also be charged separately). Upon return of the empty containers, a ticket will likely be generated offering store credit (or potentially just cash) in the shop you return the bottles to.

In the Netherlands, this works by a fixed levy per bottle type (e.g. €0.25 for a plastic soda bottle and €0.10 for a glass beer bottle). Supermarkets such as Albert Heijn (the largest Dutch supermarket chain) have automatic counting machines which you place the bottles into before a store credit receipt is calculated. As no receipt is necessary when the empty packaging is provided, you can return friends’ and neighbours’ waste as well.

What are the benefits?

Deposit Return Schemes can be a great way to minimise littering and boost recycling levels as customers make a financial investment in the product's packaging. By offering people a financial reward for properly disposing of their waste, more people are likely to separate and return plastic containers.

Is there a down side?

As with all potential waste legislation, there are varying opinions on the sustainability and effectiveness of Deposit Return Schemes. Whilst there are a lot of positive sides to a DRS, there are some negatives:

  • Cost – assuming that the collection of returned plastic bottles would sit with the retailers, there would likely be an associated cost with this as well as the implementation of a system to return the deposit funds to the customer. Whilst retailers were quick and keen to pick up the recent 5p bag charge for plastic, a DRS may have a significantly larger financial cost. It is worth mentioning that there are ongoing discussions as to whether or not small organisations should be included in the Scottish system
  • Waste Quality – a successful deposit return scheme would likely lead to the removal of plastic containers from the household waste stream (bin collections) this could lead to effective “cherry picking”, whereby retailers are in possession of well sorted, high-quality plastic waste. The removal of plastic bottles from the household waste stream could affect the profitability of waste management contracts with local authorities.

Is it the best system?

There is currently not a huge amount of research available into the effectiveness of Deposit Return Schemes in boosting recycling rates and minimising littering. The main issue is that Extended Producer Responsibility – moving the cost of the treatment of waste after discard onto the producer may be a more effective method. Plastic bottles currently make up around 11% of household waste by item and 22% by weight, would a DRS be able to provide much of a boost to the overall recycling rate?

How does this sit within the Producer Responsibility Regulations?

Within the packaging regulations, there are provisions for “closed loop” packaging, but this is meant solely for long term transit packaging and long-life packaging such as pallets, beer kegs etc. There is a specific mention of “returned packaging” in the EA’s most recent “agreed positions and technical interpretations” document stating that returned packaging may not be discounted from the overall obligation.

The potential introduction of a DRS does raise the question, should plastic bottles returned to the retailer via a DRS be subtracted from the retailer’s selling obligation?

It is likely that the EA will have to look into this if a DRS is introduced.

What does this mean for the rest of the UK?

With the development of a Circular Economy Package on the horizon, it is possible that a successful DRS in Scotland could lead to a roll out for the rest of the UK, however there has been growing concern at the diversion of high-value waste materials away from the kerbside waste stream and the impact this could have on the waste industry. The question that will be asked of the government is “Is a DRS the most efficient and cost-effective method of boosting recycling?”.

A link to the 2017-18 programme for Scotland can be found below, the Deposit Return scheme is mentioned on page 43

https://beta.gov.scot/publications/nation-ambition-governments-programme-scotland-2017-18/documents/00524214.pdf?inline=true

In conclusion; this is an area to be watched, there is currently not a huge amount of information available around the exact plan for Scotland’s system and just as sparse information surrounding how effective a Deposit Return Scheme would be. We will continue to keep you up to date on this topic, but if you have any immediate questions please feel free to get in touch with me by email.

In the meantime, should you wish to read more about the Circular Economy then please head over to our blog here or register for our upcoming webinar here.