Introducing a Deposit Return Scheme in England, Wales and Northern Ireland

Closes 4 Jun 2021

Consultation contents

 

 

Summary of proposals by chapter

Chapter 1: Scope

This chapter sets out the scheme participants who will take on obligations under the deposit return scheme – namely producers, retailers and the Scheme Administrator (Deposit Management Organisation). These obligations include requiring producers to sign up to the Deposit Management Organisation and carry out reporting obligations, paying a producer registration fee to the Deposit Management Organisation to fund the deposit return scheme, and placing a redeemable deposit on in-scope drinks containers they place on the market. Retailers will be required to accept all deposit return scheme containers returned to their store and ensure the deposit price is added to the purchase price of an in-scope drink at the point of purchase.

We consider that the scope of a deposit return scheme should be determined based on material rather than product, and propose the scheme captures PET plastic bottles, glass bottles, and steel and aluminium cans. With regards to the size of containers included, the Welsh Government’s preferred option for Wales is an all-in scheme (capturing drinks containers up to 3L in size) but remain committed to working in partnership with the UK Government and the Department of Agriculture, Environment and Rural Affairs in Northern Ireland so that the scheme is as consistent as possible across Wales, England and Northern Ireland. The UK Government for England and Department of Agriculture Environment and Rural Affairs in Northern Ireland have remained open on scope with regards to introducing a deposit return scheme in England and Northern Ireland and would like to use this consultation to gain further views on whether the deposit return scheme should be an all-in scheme (including drinks containers up to 3L in size) or an on-the-go (drinks containers under 750ml in size and excluding those containers sold in multipacks) scheme. Because England and Northern Ireland remain neutral on scope, some chapters of the consultation may touch on policy variances based on whether the final scheme is all-in or on-the-go. The consultation should be read based on an all-in deposit return scheme being implemented in Wales.

Chapter 2: Targets

This chapter proposes that legislation will set out targets for a proportion of drinks containers placed on the market to be collected for recycling. We propose that there should be an obligation placed on the Deposit Management Organisation to achieve a 90% collection rate after three years from introduction of the scheme in order to ensure high performance of the deposit return scheme, with a phasing in approach for the targets over this three-year period. The UK Government for England, the Welsh Government and the Department of Agriculture, Environment and Rural Affairs in Northern Ireland will have the same statutory targets for collecting material.

We do not propose that recycling targets should be imposed on the Deposit Management Organisation in addition to collection targets, due to difficulties arising with how the Deposit Management Organisation ensures this material has been recycled once sold to a reprocessor. Instead, in order to ensure that all material collected through a deposit return scheme will be recycled, we propose that there should be a legal obligation on the Deposit Management Organisation to ensure that the material that is collected via a deposit return scheme is passed on to a reprocessor and evidence is provided of this. The UK Government for England, the Welsh Government and the Department of Agriculture, Environment and Rural Affairs in Northern Ireland will be obligated to report the overall packaging recycling rates by each part of the United Kingdom (England, Wales and Northern Ireland) in 2025 and 2030, reflecting both the packaging recycling through Extended Producer Responsibility and a deposit return scheme.

Chapter 3: Scheme Governance

This chapter outlines the role of the Deposit Management Organisation whose role is to manage the operation of the deposit return scheme. The Deposit Management Organisation will be responsible for meeting the high collection targets set out in legislation and will be appointed via a competitive tender process which the consultation explains. The Deposit Management Organisation will operate across these parts of the United Kingdom (England, Wales and Northern Ireland) and functions will be conferred on it via a combination of regulations and a contract, managed jointly by the three Governments which are set out in the chapter. 

The consultation elaborates on how the Deposit Management Organisation will be held accountable for the success of the scheme, by a combination of the following: regulations, the tender process to appoint the Deposit Management Organisation, and a series of performance indicators set out in a contract between Government and the Deposit Management Organisation. 

Chapter 4: Financial Flows

The consultation chapter will set out the proposals for the Deposit Management Organisation to be funded via three revenue streams: material revenue, producer registration fees, and unredeemed deposits. We consider how burdens can be minimised for smaller producers and seek views on how unredeemed deposits should be invested in the system, proposing that they are reinvested to part-fund the operation of the scheme.

The chapter also discusses the approach to setting the deposit level, proposing that we do not fix a deposit level in legislation but rather set out a minimum, and possibly maximum, deposit within the secondary legislation. This will ensure the Deposit Management Organisation have the flexibility to set and change the deposit level as a critical lever to meeting the targets set in legislation. We propose that the Deposit Management Organisation have the ability to set a fixed or variable rate deposit and seek further views on this approach in the chapter.

Chapter 5: Return Points

This chapter sets out further details of the retailer options in the deposit return scheme, proposing that all retailers who sell in-scope drinks containers will be obligated to accept returns of in-scope material by hosting a return point. This will likely be via reverse vending machine or manual return points, but the regulations will be broad in nature to ensure alternative methods of return are not ruled out if the Deposit Management Organisation wish to explore these. We also propose a number of conditions which can be enforced when containers are returned, and give details on limited exemptions to retailers hosting return points, on the basis of close proximity to another return point, or where hosting a return point would result in a breach of safety obligations.

We set out a selection of approaches for online retailers selling in-scope containers to offer a take-back service and seek views on details of how the deposit return scheme could work for takeaway meal delivery services. We present the policy for retailers to receive a handling fee from the Deposit Management Organisation to compensate them for any costs incurred in hosting a return point. There is also the option for voluntary return points to be established by non-retail actors, and a nuanced position set out for the deposit return scheme in HORECA (hospitality) industries where specific issues of providing a take-back service have been addressed.

The chapter also discusses the potential for innovation in technology to be deployed in a deposit return scheme system and provides further detail on how this might support the return points provisions through the use of smart phone applications allowing the electronic redemption of a deposit.

Chapter 6: Labelling

This chapter proposes mandatory labelling be legislated for as part of the deposit return scheme to ensure the smooth functioning of the scheme so that retailers, on-trade sites, consumers and those responsible for recycling or reusing containers, are able to quickly and easily identify in-scope containers. We also view labelling as a necessary measure to significantly minimise the risk of fraud, ensuring that once containers are scanned and returned, they lose their deposit value and cannot be returned again. Labelling will also provide clarity for consumers in understanding what drinks containers are captured by the deposit return scheme.

Chapter 7: Local authorities and local councils

This chapter explores the impact a deposit return scheme will have on local authorities[1]  and the way in which containers in scope of the scheme will be treated when these containers, despite the introduction of the deposit return scheme and specified return point provision, still end up in local authority waste streams. Most pressing is the need to seek views on how local authorities should be financially reimbursed for the costs involved in treating scheme material. The consultation proposed three options, the first being a ‘do nothing’ approach and allowing local authorities to redeem the deposits of deposit return scheme containers collected in their waste streams. The second option is to allow the Deposit Management Organisation to make payments to local authorities for these materials via the Extended Producer Responsibility Scheme Administrator. Under the proposed packaging Extended Producer Responsibility funding formula approach, packaging producers will be required to meet the net costs of managing household packaging waste in local authority waste streams. The funding formula developed for these payments under Extended Producer Responsibility would include the costs of deposit return scheme containers. The third option presented is a hybrid option, whereby the Deposit Management Organisation pays a deposit value on containers that are returned and any additional scheme material in local authority waste streams is covered by a funding formula in Option 2. In the consultation, we state a preference for Option 2 being taken forwards for the final scheme design.

Chapter 8: Compliance Monitoring and Enforcement            

This chapter provides an overview of how the deposit return scheme will be monitored and enforced. We consider the environmental regulators in England, Wales and Northern Ireland are best placed to be Scheme Regulators for a deposit return scheme for drinks containers and to monitor and enforce the actors that are obligated under the scheme. In addition to this, we consider there is a role for local authorities / Trading Standards to regulate the consumer-facing obligations that are placed on retailers.

The chapter provides examples of the typical offences that could be committed by different scheme participants and which regulator would be responsible for dealing with the offence. We also provide an indication of what penalties might be employed for those committing offences in the scheme, ensuring any enforcement response is proportionate and appropriate to the situation. 

 

[1] Where the term local authority is used in this consultation, it shall refer to local councils when considered with regards to Northern Ireland.

 
Page Response
Introduction
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Chapter 1: Scope of the Deposit Return Scheme
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Chapter 2: Targets
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Chapter 3: Scheme Governance
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Chapter 4: Financial Flows
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Chapter 5: Return Points
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Chapter 6: Labelling
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Chapter 7: Local authorities and local councils
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Chapter 8: Compliance Monitoring and Enforcement
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Chapter 9: Implementation Timeline
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Chapter 10: Summary Approach to Impact Assessment
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