Governments confirm postponement of DRS until 2027

Someone using a reverse vending machine in a DRS schemeIn written statements and a joint policy paper, Defra and Devolved Administrations of Scotland, Wales, and Northern Ireland have set out an updated timetable, as well as alignment on key aspects for introducing deposit return schemes (DRS) for drinks containers.

Subject to legislation, separate but interoperable schemes will be introduced in Scotland, Wales, as well as a joint scheme for England and Northern Ireland to run from October 2027. This confirms the recent statement made to the Environment Audit Committee by Steve Barclay, Defra’s Secretary of State.

In a written statement published today (25 April), Robbie Moore MP, Parliamentary Under Secretary of State at DEFRA, commented on the shared plan: "Extensive engagement has been undertaken to explore various proposals and identify compromises. Together, we have successfully reached alignment on joint registration and reporting, labelling, reciprocal returns, deposit level, minimum container size, and low volume sales."

The introduction of interoperable schemes is intended to simplify processes for consumers and businesses, while preserving the status of waste and recycling as an area of devolved competence.

Rollout of the DRS has been structured into distinct phases, with an initial focus on regulatory alignment and the appointment of Deposit Management Organisations (DMOs) by Spring 2025, which will be responsible for managing the day-to-day operations of each DRS. Following the establishment of DMOs, a comprehensive setup phase will run from Spring 2025 to Spring 2026, which involves securing funding, appointing key personnel, and procuring necessary logistics and IT support.

The final rollout phase, from Spring 2026 to Autumn 2027, will allow businesses to adjust to the new system, setting up national collection infrastructures, and initiating consumer engagement campaigns. By October 2027, the Deposit Return Schemes across the UK will become operational, applying deposits to eligible drinks containers, which can be redeemed upon their return.

The UK government along with DAERA in Northern Ireland, the Scottish Government, and the Welsh Government will be taking steps to initiate the establishment of Deposit Management Organisations (DMOs) that will operate the Deposit Return Schemes (DRS) across the respective administrations.

Notably, the Policy Paper encourages industry to propose prospective DMO candidates, stating that the ’sooner an industry-backed candidate is presented to government, the quicker these discussions can commence,’ without indicating how it will arbitrate this process without conferring advantage to stakeholders with the deepest pockets.

Each administration will oversee the appointment process through their own regulatory frameworks.

Striking a fragile balance on glass

In what appears to be a climbdown from the statement made by Steve Barclay to the Environment Audit Committee four weeks ago, the UK Government will not invoke the UK Internal Market Act to prohibit the Welsh Government from including glass in its DRS.

The scheme run in England and Northern Ireland, as well as the scheme run in Scotland will be limited to beverage containers of between 150 ml and 3 litres made from polyethylene terephthalate (PET), steel, and aluminium cans.

Citing polling that indicated an ‘overwhelming’ number people support the inclusion of glass in DRS, Huw Irranca-Davies MS, Cabinet Secretary for Climate Change and Rural Affairs for the Welsh Government stated: “Excluding glass whilst all other materials are included therefore not only risks there not being a level playing field, which may result in producers changing material for less environmentally friendly and higher carbon options, but also excludes what is currently the most sustainable potential option.

“It also risks hampering the ability of the glass sector to transition and remain competitive, with high quality source separated material being crucial to delivering to increasing recycled content against the legal requirements that will be in place in any event.”

Indicating how divisive the issue of whether or not to include glass, in his written statement, Robbie Moore commented: “It remains my view that including glass in any UK DRS will create undue complexity for the drinks industry and it increases storage and handling costs for retailers. Glass containers are heavy and fragile, making them more difficult for consumers to return and receive the deposit they have paid, potentially forcing up the cost of their shopping.”

As it currently stands, with government elections and further legislation required before DRS will be implemented, return operators outside of Wales will not be required to provide a deposit refund on glass containers. Whereas, interoperability means that all other types of container in the scheme will be refundable anywhere in the UK, regardless of the point of purchase.

Operational details

DMOs will be required to collaborate on developing a unified registration and reporting system for all drink container schemes. In addition, it is proposed that there will be no annual registration fees. Instead, producers will contribute to the scheme costs proportionally based on the quantity of containers they place on the market.

To fund the operation of the Deposit Return Schemes (DRS), DMOs will rely on three primary revenue sources: producer fees per container, sales of collected materials, and unredeemed deposits.

Labelling efforts will focus on a standardised logo and identification markers like barcodes or QR codes applicable to all DRS containers throughout the UK. This approach is intended to facilitate easy identification by consumers and compatibility with return systems, while preventing fraudulent returns.

An aligned deposit level across the UK will be established by the DMOs, based on comprehensive evidence and intended to balance consumer accessibility with the scheme's environmental goals.

From the start of the schemes, supermarkets and convenience stores will be required to act as return points. Other venues, such as hospitality locations and gyms, may choose to host voluntary return points, attracted by the potential increase in customer traffic. The network of return points will be designed to balance accessibility and cost-effectiveness, with exemptions possible for reasons of safety or proximity to other return points.

The concept of online takeback - such as via home-delivery vehicles - will not be mandatory at the scheme's start due to uncertainties about its feasibility on a large scale. Instead, the industry will be invited to explore voluntary solutions, keeping the option under review for future implementation.

It is intended that access to the DRS will be ensured for all consumers, including those potentially challenged by physical return locations, suggesting a potential role for a digital DRS component.

Industry reaction

Industry stakeholders responded with cautious optimism to the announcement of the postponement of the Deposit Return Scheme (DRS) to 2027, highlighting both opportunities and challenges in the implementation of the scheme.

Karen Betts, CEO, Food and Drink Federation, expressed support for the initiative: “We welcome today’s confirmation that the UK will be putting a Deposit Return Scheme in place as part of plans for a circular economy. This means that drinks containers will be able to be recycled and used again more efficiently and easily, which is good news for the environment, companies, and consumers.”

Dr. Adam Read, Chief External Affairs and Sustainability Officer for SUEZ Recycling and Recovery UK, highlighted the need for DRS to be part of a broader strategy: “Today’s announcement is the right move for UK recycling policy, and comes as no surprise for those of us who have advocated the delay of DRS. The UK still has a major recycling challenge, however before any DRS scheme is implemented, we need to see Extended Producer Responsibility and consistent kerbside collections in place and working effectively.”

Paul Vanston, CEO of the Industry Council for Packaging and the Environment (INCPEN) commented: “It’s very positive the four governments have agreed interoperability on such things as common labelling, common registration systems, consolidated reporting processes across the UK, and reciprocal returns of in-scope containers.

“The revised go live date of October 2027 remains challenging given how much the governments have to achieve from now onwards. This includes appointing a Deposit Management Organisation (DMO) by Spring 2025, set-up phase to Spring 2026 and the physical roll-out of DRS across one of the world’s major economies by Autumn 2027, and which properly serves the needs of our 68 million citizens wherever we live. But, given the previously announced timescales became unrealistic for the governments themselves to achieve, the new timings provide welcome clarity to all stakeholders.’