Deposit return scheme launched in England and Northern Ireland

England and Northern Ireland will be operating a deposit return scheme (DRS) from 1 October 2027. The scheme applies to single-use drinks containers:

• made of aluminium, PET plastic and steel; and
• with a capacity of between 150ml and 3 litres.

The DRS has been made possible following the publication of the Deposit Scheme for Drinks Containers (England and Northern Ireland) Regulations SI 2025/67.

Approximately 12 billion plastic drinks bottles and 14 billion drinks cans are used across the UK every year. However, not all of these drinks containers are recycled and not all of them are disposed of appropriately. This leads to litter and the inclusion of recyclable materials in non-recycling waste streams. DRSs are designed to tackle this issue and it is hoped that these Regulations can achieve a collection target of 90% from 2030.

Background

The development of such schemes in the UK has so far had troubled beginnings. Back in May 2020 Scotland began to bring the Deposit and Return Scheme for Scotland Regulations SSI 2020/154 info force which will ultimately see the establishment of a DRS in Scotland. However, due to various issues the actual implementation of the DRS has been delayed multiple times and is still not in operation.

Then in April 2024, the Department for Environment, Food and Rural Affairs (DEFRA) published a joint policy statement on behalf of themselves, the Scottish and Welsh Governments and the Department of Agriculture, Environment and Rural Affairs (DAERA) in Northern Ireland setting out that all four UK countries would work together to align the launch of DRS across the UK. The initial timeline suggested that this would result in an operational DRS in October 2027, with the initial work to establish it taking place between 2025 and 2027.

However, it was later confirmed that Wales would no longer be taking part in the joint process to implement DRS and would develop a scheme that supports the reuse of all drinks containers instead.

Now England, Northern Ireland and Scotland will move ahead to implement a DRS by October 2027.

How does a DRS work?

The way a DRS works is fairly simple in theory. When someone buys a drinks container that is included in the scheme, they are charged a deposit on top of the unit price. When that container is returned to a designated return point, the deposit will be refunded. It provides a financial incentive to ensure people dispose of drinks containers properly and also helps the Government better recycle the materials involved, reduce litter and move towards a more circular economy.

In reality, the establishment of a DRS can be tricky, and the new legislation in England and Northern Ireland reflects that. It requires different systems to be in place before the DRS even starts, which means between January 2025 and October 2027, producers and retailers may have to make some changes.

Producers

Anyone who manufactures, imports or fills drinks containers that are in-scope of the Regulations are required to register with a deposit management organisation. That organisation is expected to be appointed in April 2025. A registration fee will be charged but this depends on the number of containers placed on the market.

Once registered:

• the producer must make and keep records for a minimum of seven years. Those records have to cover, amongst other things, the materials used, container capacity and the size of any multipacks supplied containing in-scope containers
• producers must apply the deposit to all containers included in the DRS and then pay those deposits to the deposit management organisation once containers are sold to the next business in the supply chain;
• producers must comply with labelling requirements, which means a scheme logo and scheme return code has to be added to items.

However, there is an exemption for product lines where less than 5,000 units are made each year. These are known as 'low-volume products' and, although the producer must still register with the deposit management organisation, the products themselves do not need a deposit amount attached to it, and labelling is not required.

Suppliers

A supplier is considered as anyone established in the UK who supplies drinks in in-scope containers. Their obligations include:

• only supplying in-scope items if the producer is registered with the deposit management organisation;
• making sure the items contain a scheme logo and a return code before being supplied (this applies to multipacks too);
• making sure low volume products are supplied without a scheme logo and return code;
• displaying or providing information about the DRS (such as the fact a deposit has to be charged for the item, the price of the item and the price of the deposit) as well as information about registered low volume products where applicable;
• charge customers a deposit on in-scope items - this doesn't have to be done if drinks are supplied for immediate consumption at certain premises.

Suppliers can also volunteer to operate return points. These return points must be authorised by the deposit management organisation.

Retailers

Under the Regulations, a retailer includes a supermarket of any size, a grocery store, a convenience store or a newsagent, subject to exemptions (such as coffee shops, indoor attractions, retail premises in hospitals etc). Their obligations include:

• operating a return point, unless:
  • a return point exemption is in place, though these exemptions have to be applied for,
  • the retail space is less than 100m² in an urban area,
• registering the return point with the deposit management organisation;
• displaying information about the DRS in retail premises;
• displaying certain information at the return point itself, including information about why items might be refused;
• refund the deposit on items returned to a return point via cash, a payment to a card or a refund voucher;
• keep the returned items until it is collected by or on behalf of the deposit management organisation.

Targets

The DRS is designed to increase recycling rates. As a result, the Regulations obligate the deposit management organisation to meet the following collection targets:

• 1 January 2028 to 31 December 2028 - 70% of all refund items from deposit items supplied by registered scheme producers with a view to final consumption;
• 1 January 2029 to 31 December 2029 - 80% of all refund items from deposit items supplied by registered scheme producers with a view to final consumption;
• 1 January 2030 onwards - 90% of all refund items from deposit items supplied by registered scheme producers with a view to final consumption.

For more information, see:

• the Deposit Scheme for Drinks Containers (England and Northern Ireland) Regulations SI 2025/67;
• Deposit Return Scheme: drinks producer and retailer responsibilities.