Summary
A new deposit return scheme (“DRS”) is being introduced in Scotland this year with further DRSs being introduced in England, Wales and Northern Ireland in 2025. DRSs are a way of encouraging more people to recycle drinks containers, such as bottles and cans. They work by charging anyone who buys a qualifying drink a small deposit for the bottle or can that it comes in. The customer gets this money back when they return the bottle or can to a collection point to be recycled.
Under the Deposit and Return Scheme for Scotland Regulations 2020 (as amended) (the “Regulations”), when a consumer buys a drink in an obligated single-use container they will pay a 20p deposit, which they get back when they return the empty bottle or can. It will have implications for importers, producers and anyone marketing or offering for sale drinks in Scotland in a single use container (made from PET plastic, glass, steel or aluminium sized between 50ml and 3 litres).
DRS system in Scotland
Who is obligated?
The following are obligated under the Scottish DRS scheme, a producer (i.e. a brand owner, an importer or those who fill and seal in-scope drinks containers with a drink at the point of sale to a consumer), a retailer (i.e. those who market or offer for sale in scope drinks to a consumer, those who operate an online marketplace or own a vending machine) or a wholesaler (i.e. those who market, offer for sale or sell an in-scope drinks container that you have not produced or imported yourself and are not selling to a consumer. This includes any third-party reseller and not just those who operate from warehouses).
What obligations apply?
Certain obligations apply to a producer, retailer or wholesaler under DRS. For example a producer is required to register with SEPA, pay a registration fee, charge a 20p deposit on each in-scope container made available for retail sale in Scotland, arrange for collection of your empty in-scope containers, pay a reasonable handling fee to retailers and return point operators to cover the cost of the collection and storage at return points, meet collection targets and refund deposits to customers.
Further obligations apply to retailers which include the requirement to clearly display the price of the deposit (20p) in any place that a drink is displayed for sale and how the customer can redeem the deposit. Retailers and wholesalers are required to only sell qualifying drinks from registered producers as well as to comply with further obligations under the legislation.
Enforcement
SEPA will be the regulator in Scotland. A range of enforcement tools will be made available including the power to impose fixed or variable penalties for non-compliance, and to accept an enforcement undertaking. For more serious offences, SEPA can report the offence for prosecution through the court system.
Key dates
28 February 2023: Producer registration closes. Producers can choose to register with Circularity Scotland (the scheme administrator) or directly with SEPA.
March 2023: Retailers can register with Circularity Scotland as return point operators.
16 August 2023: The scheme is expected to go live in Scotland. All drinks produced in scheme containers for sale to a consumer in Scotland must bear a deposit and retailers who sell drinks must operate return points (unless exempt).
Deposit Return Schemes in England, Wales and NI
On 20 January 2023, Defra published the joint government response to the second consultation on their proposals for a DRS in England, Wales and Northern Ireland. There are plans to introduce the DRS from 1 October 2025.
The response indicated that the scope of the DRS will include:
- The "all-in" option for the size of containers in scope (50 millilitres to three litres like Scotland).
- England and Northern Ireland will include polyethylene terephthalate (PET) bottles, and steel and aluminium cans (glass bottles are excluded from the consultation proposal);
- Wales will include PET bottles, steel and aluminium cans, and glass bottles.
PET and aluminium or steel cans will be redeemable in any of the nations, while the return of glass bottles will only be mandated in Wales and Scotland. Mandatory labelling requirements will be introduced with the use of both a mark to identify the product as part of a DRS and the use of an identification marker, such as a barcode or QR code, to enable the container to be recognised at the return point.
Obligations on scheme participants will include:
- Producers are to be brand owners or manufacturers of drinks in in-scope containers that are then sold in England, Wales or Northern Ireland. This includes persons who import drinks containers to put on the market (very similar to the Scottish DRS). Their obligations will include placing a deposit on the container when it is sold and registering with the scheme.
- Retailers are only considered to be a producer where they place own-brand drinks on the market in the relevant nation. Retailers will be required to add the deposit value to the purchase price and ensure clear labelling, as well as operate a return point. Manufacturers of physical containers are not included.
Comment
With the Scottish DRS system expected to go live on 16 August this year, those obligated under the Scottish system should ensure that they can comply with their responsibilities by this date. Those obligated under the schemes in the rest of the UK should begin to prepare their businesses with a view to complying with DRS obligations by 1 October 2025. It will be helpful for obligated entities in England, Wales and Northern Ireland to see how the Scottish DRS scheme operates in advance of their own DRS coming into place. Although, concerns are already being voiced that the Scottish DRS could create an unlawful trade barrier with the rest of the UK. To combat this potential issue, it has been recommended that the Scottish DRS be delayed to October 2025 in line with the rest of the UK. A unified roll out may yet unfold.
The Scottish Government have noted that the formal process for excluding the deposit return scheme regulations from the Internal Market Act is underway.
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