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

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Closes 13 May 2019

Introduction

 

Recent months have seen a rise in the public consciousness when it comes to the need to tackle packaging waste. UK consumers go through an estimated 14 billion plastic drinks bottles, 9 billion drinks cans and 5 billion glass bottles a year[1] and, although plastic bottles are fully recyclable, recent packaging recycling rates demonstrate that there are significant improvements to be made in drinks container recycling, especially in relation to recycling of containers whilst ‘on-the-go’. Moreover, drinks container litter is a serious issue which needs targeted policy action to overcome; with disposable drinks containers, or parts of them, regularly featuring among the most commonly found items on UK beaches.[2] Coupled with the growing awareness of plastic waste in our oceans, the importance of encouraging behaviour change to stop littering at source and, ideally, promote the capture of valuable resources is clear.

The UK and Welsh Governments and the Department of Environment, Agriculture and Food in Northern Ireland (DAERA) have high ambitions for the resources and waste sector. The UK Government has committed in its 25 Year Environment Plan for England to reform producer responsibility systems (including packaging waste regulations) to incentivise producers to take greater responsibility for the environmental impacts of their products. This consultation forms part of the government’s action towards meeting that commitment. Moreover, the UK Government’s Resources and Waste Strategy was clear that a DRS could help consumers take more considered action when disposing of products at end of life

The Welsh Government’s ‘Towards Zero Waste’ Strategy published in 2010, set out the ambition to achieve zero waste by 2050, with an intermediary milestone of 70% recycling by 2025. Following its study on extended producer responsibility options for key food and drink packaging, the Welsh Government has also agreed to consider introducing a DRS, subject to consultation.

The  Northern Ireland Waste Management Strategy, published in 2013, sets out objectives aimed at setting a direction towards treating waste as a resource with a value to be used more efficiently, and to make it a key element in developing and promoting a low carbon circular economy. It was followed in 2015 by an Options Paper on the desirability and feasibility of a DRS scheme in Northern Ireland, which concluded that whilst a DRS was desirable and had the potential to increase recycling and influence behaviour on a wider environmental scope, it was not feasible to introduce a scheme on a Northern Ireland only basis. Therefore, DAERA will now consider the possible introduction of a DRS scheme in conjunction with England and Wales, subject to consultation.  

Summary of key content

This consultation seeks views on proposals to introduce a DRS for drinks containers in England, Wales and Northern Ireland, whilst recognising that any DRS should form part of a coherent system across the UK.

A DRS would see a deposit added to the price of drinks in in-scope drinks containers at the point of purchase, which would be redeemed when consumers return their empty drinks containers to designated return points. If introduced, we anticipate that a DRS will help reduce the amount of littering in England, Wales and Northern Ireland, boost recycling levels for relevant material, offer the enhanced possibility to collect high quality materials in greater quantities and promote recycling through clear labelling and consumer messaging.

This consultation proposes that the materials included in a DRS could be PET and HDPE plastic bottles, steel and aluminium cans, and glass bottles. We are proposing that a broad range of drinks, including water, soft drinks, juices, alcohol, and milk-containing drinks, where they are sold in containers made of these materials, could be included in a DRS. We would not propose including milk (or plant-based drinks such as soya) within scope of a DRS as it is considered by many as an essential product which is only widely available in containers.

 All producers of drink beverage products that would fall within the scope of a DRS would be mandated to join the DRS and be obliged to meet high collection rates set by government. As all items under consideration for inclusion in a DRS are packaging, government would need to ensure that any reformed packaging producer responsibility system takes this into account.

Any DRS would need to have a central body or organisation to manage its operation, which would include overseeing financial and material flows, logistics, infrastructure maintenance, and reporting. We envisage this role to be undertaken by a new not-for-profit body, the Deposit Management Organisation (DMO), which would be established for the purpose of running the DRS. The DMO would be funded by fees paid by producers and revenue obtained from collected DRS material sent on for recycling. We are seeking views in this consultation on whether unredeemed deposits should also be used to part-fund the running of the DRS system.

Drinks containers within a DRS could be returned either via an automated return point using a reverse vending machine (RVM), which could be hosted, for example, by large retailers in supermarkets as well as potentially in areas of high footfall such as transport hubs, or via a manual return point that could be hosted by small retailers and involve containers being returned over-the-counter. Those hosting return points would be paid a handling fee by the DMO to reimburse them for associated costs.

Due to the proposed management of financial flows, a monitoring and enforcement body would be needed to monitor and audit DMO operations to ensure the system is operating fairly and transparently.

Local authorities[3] are important stakeholders for a DRS due to its interaction with their waste collection duties. A DRS may move higher-value recyclable materials away from local authority collections, which will reduce both their income from the sale of these materials as well as their costs of managing these materials.  As set out in the Resources and Waste Strategy for England, the UK Government will ensure that local authorities in England are resourced to meet new net costs arising from the policies that flow from the Strategy, including upfront transition costs and ongoing operational costs.[4] We also anticipate that where consumers choose not to return their drinks containers to a designated DRS return point, DRS material would end up in kerbside collections, and the deposit value would fall to local authorities, should they choose to redeem it. We are considering a funding formula whereby local authorities could be paid the deposit amount on drinks containers by the DMO without having to physically return them via a designated return point.

In a well-functioning DRS it would be easy for consumers to return drinks containers and obtain their deposit refund. This may mean that consumers choose to return a drinks container to either the same place, or a different place to where they bought it. We recognise that work will need to be done to ensure that return provisions are as convenient as possible for consumers. Moreover, we would want a DRS to be equally accessible for all, and for no consumers to experience difficulty in returning empty drinks containers to receive their deposit refund. We are therefore seeking views through the consultation on how to ensure provisions are in place so that any consumers who may struggle to return empty drinks containers to a designated return point would still be able to participate in a DRS.

We are considering two options for a DRS, both of which would cover the same materials and drinks outlined above, but would differ in terms of the size of the drinks containers in-scope. We are also seeking opinions on whether there are alternative approaches we could consider.

The first option, known as the ‘all-in’ model, would not place any restrictions on the size of drinks containers in-scope of a DRS. This would target a large amount of drinks beverages placed on the market. The second option, known as the ‘on-the-go’ model, would restrict the drinks containers in-scope to those less than 750ml in size and sold in single format containers. This model would target drinks beverages most often sold for consumption outside of the home (while ‘on-the–go’).

An alternative to introducing a DRS would be for all drinks containers to be captured under a reformed packaging producer responsibility system (addressed in the linked consultation on reforming the packaging producer responsibility system).

Summary of analysis

Alongside the consultation, we are publishing an Impact Assessment (IA) which provides a full analysis of our two proposed DRS options. The IA goes some way to providing a more comprehensive assessment of the costs and benefits of implementing a DRS. The IA compares the economic costs of setting up and running a DRS against the material benefits obtained as a result of implementing the system. It also considers and outlines differential impacts on stakeholders involving transfers of revenue within the DRS system; this includes looking at impacts on Local Authorities and the kerbside recycling system as a result of introducing a DRS. The IA assumes an 85% return rate for DRS material, with both options assumed to start in 2023, and  compared against a ‘do nothing’ baseline. If a DRS is not introduced, it is assumed that other recycling policies, in particular a reformed UK packaging producer responsibility system and consistency in household and business recycling collections in England, would proceed (further analysis of this is covered in the IA on reforming the packaging producer responsibility system). 

For an all-in DRS, the central total cost estimate, discounted with 2018 as the base year, is £ 7,211m over the first ten years of the scheme, and the central total benefit estimate, also discounted with 2018 as the base year, is £9,400m over the first ten years of the scheme. This gives a central Net Present Value of £2,189m.

For an on-the-go DRS, the central total cost estimate, discounted with 2018 as the base year, is £2,764m over the first ten years of the scheme, and the central total benefit estimate, also discounted with 2018 as the base year, is £3,012m over the first ten years of the scheme. This gives a central Net Present Value of £249m.

We recognise that there are still evidence gaps in our analysis, and are seeking contributions to address these as part of the consultation so that a more comprehensive analysis can be developed for a final Impact Assessment on any DRS policy.

Your responses to this consultation will help us to consider the merits of introducing a DRS. The aim of the UK and Welsh Governments and DAERA is to ensure that, should a DRS be introduced, it will be easy for consumers to return drinks containers, leading to increased recycling rates and a reduction in littering.

 

[3] A reference to “local authority” or “local authorities” in this consultation is a reference to a district council or district councils in Northern Ireland.

1. Would you like your response to be confidential?

More Information

1. A summary of responses to this consultation will be published on the Government website at: www.gov.uk/defra. An annex to the consultation summary will list all organisations that responded but will not include personal names, addresses or other contact details.

1.1 Defra may publish the content of your response to this consultation to make it available to the public without your personal name and private contact details (e.g. home address, email address, etc).

1.2 If you click on ‘Yes’ in response to the question asking if you would like anything in your response to be kept confidential, you are asked to state clearly what information you would like to be kept as confidential and explain your reasons for confidentiality. The reason for this is that information in responses to this consultation may be subject to release to the public or other parties in accordance with the access to information law (these are primarily the Environmental Information Regulations 2004 (EIRs), the Freedom of Information Act 2000 (FOIA) and the Data Protection Act 2018 (DPA)). We have obligations, mainly under the EIRs, FOIA and DPA, to disclose information to particular recipients or to the public in certain circumstances. In view of this, your explanation of your reasons for requesting confidentiality for all or part of your response would help us balance these obligations for disclosure against any obligation of confidentiality. If we receive a request for the information that you have provided in your response to this consultation, we will take full account of your reasons for requesting confidentiality of your response, but we cannot guarantee that confidentiality can be maintained in all circumstances.

1.3 If you click on ‘No’ in response to the question asking if you would like anything in your response to be kept confidential, we will be able to release the content of your response to the public, but we won’t make your personal name and private contact details publicly available.

1.4 There may be occasions when Defra will share the information you provide in response to the consultation, including any personal data with external analysts. This is for the purposes of consultation response analysis and provision of a report of the summary of responses only.

1.5 This consultation is being conducted in line with the Cabinet Office “Consultation Principles” and be found at: https://www.gov.uk/government/publications/consultation-principles-guidance.

1.6 If you have any comments or complaints about the consultation process, please address them to:

Consultation Co-ordinator
1C
1st Floor, Nobel House
17 Smith Square,
London,
SW1P 3JR

Or email: consultation.coordinator@defra.gov.uk

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2. What is your name?

3. What is your email address?

This is optional, but if you enter your email address then you will be able to return to edit your consultation at any time until you submit it. You will also receive an acknowledgement email when you complete the consultation.

4. Please provide information about the organisation/business you represent

5. Please provide any further information about your organisation or business activities that you think might help us put your answers in context.

6. Does your organisation have any recent experience of a DRS or related schemes? If so, can you please briefly explain your experiences?

7. Are you content for the UK government, or in Wales, the Welsh Government, or in Northern Ireland, DAERA to contact you again in relation to this consultation?

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