The UK’s long-awaited Deposit Return Scheme (DRS) is set to go live in October 2027, requiring customers to pay a refundable deposit on certain single-use drink containers. Lilia Akatova argues that the success of the scheme will depend on several factors that remain unclear, including the financial sustainability of local waste collection services, the scheme’s interaction with wider packaging policy, how the revenue it generates will be invested, and the Government’s consumer engagement strategy.
The scheme will cover polyethylene terephthalate (PET) bottles and aluminium and steel cans with a capacity of between 150 millilitres and 3 litres. The deposit is currently set at 20p and will be refunded when customers return the container to a reverse vending machine or a designated return point at a supermarket or grocery store. The DRS will apply across all four UK nations but Wales is running its own separate scheme that also includes glass containers, with no deposit charged during a transition period that will run until 30 September 2031. The DRS follows the successes of similar initiatives in countries such as Germany, Norway and Finland, which have achieved container collection rates of up to 98%. Like these schemes, the DRS is designed to boost recycling rates, reduce single-use litter and capture high-quality materials through a separate collection stream.
Financial sustainability of local authorities
Under the current kerbside waste collection system, local authorities benefit financially from collecting and selling valuable materials for recycling, such as PET bottles and aluminium cans. Although the removal of those materials decreases the volume of waste local authorities handle, it also reduces the income they generate from these high-value materials. This can also push up the gate fees that material recycling facilities (MRFs) charge local authorities to process recycling, since waste processors are left with fewer valuable materials and pass on the extra cost. Additionally, the introduction of a DRS creates uncertainty around waste collection contracts, as such contracts are usually long-term and sometimes include a minimum tonnage guarantee. Councils may need to renegotiate such contracts and will likely do so with less leverage than they had before, resulting in higher costs.
A 2024 Impact Assessment published by the Department for Environment, Food and Rural Affairs (Defra) estimates that the DRS will result in a cumulative saving of 69p per household for local authorities. However, councils have criticised the assessment for relying on outdated data, calling for an updated impact assessment and a financial mechanism to offset additional costs and foregone income. MRF operators have expressed similar concerns, warning that the removal of valuable materials would drive up unit processing costs, weaken investor confidence and reduce the resilience of domestic recycling infrastructure.
Interactions with the UK’s wider packaging policy
Another point of criticism is the interaction between the DRS and other components of the UK’s packaging policy. Under the current system, producers pay waste management fees through the Extended Producer Responsibility for packaging (pEPR) according to the volume of packaging they place on the market. While the materials covered by the DRS are excluded from these producer payments, it is unclear how pEPR will apply to Wales’ zero-deposit treatment of glass. Under current UK-wide policy, glass bottles fall within pEPR, and it remains to be seen whether Welsh glass will be granted an exemption. Additionally, if such an exemption is granted, there will be a lingering question about how the DRS will identify glass containers that are sold in England, Scotland and Northern Ireland but later collected and recycled in Wales.
Resolving the issue of interoperability between the Welsh scheme and the DRS in the rest of the UK will be key to a smooth launch next year. So will meeting the challenge of how to fund glass recycling infrastructure if the zero-deposit transition period is paired with an exemption from pEPR costs.
Revenue co-sharing
Both local authorities and MRF operators have also raised concerns that DRS collection rates will likely reach only around 70–80% in the scheme’s early years, leaving the remaining materials in the kerbside collection stream. The question of who will fund the collection of these materials remains open, as pEPR fees will not be applicable to DRS-circulated materials once the system goes live. If councils and MRF operators are to keep collecting the remaining kerbside materials effectively and profitably, the Government may need to co-share DRS revenues from unreturned deposits.
Consumer engagement
Another concern relates to whether consumers will be willing and ready to engage with the scheme. While polls show around 70% of the public support the rollout of DRS, it is less clear how prepared consumers will be when the scheme takes effect. Simple and effective public messaging is required to ensure that consumers understand how pricing and returns work. A widespread and accessible network of return points is also vital to ensuring that DRS is convenient for consumers. Clear labelling is also needed to prevent stockpiling ahead of the DRS rollout date, with consumers buying deposit-free containers before 1 October 2027 and attempting to claim a refund on them afterwards.
Timing
Despite multiple calls to delay the rollout, it is crucial that the Government sticks to the agreed start date of 1 October 2027. Past delays and uncertainties with a DRS in Scotland led to major investment losses, undermining the trust of investors and suppliers in the Scottish Government’s ability to deliver on its policy commitments. Judging by similar schemes elsewhere, a DRS tends to produce results quickly once it has been properly set up. For example, in Lithuania, the collection rate jumped from 34% to 92% within the first 18 months of implementation. This success was attributed to the vast coverage of the return network, allowing consumers to deposit containers easily.
Conclusion
Over the next 12 months, the UK Government will need to clarify how to guarantee the financial sustainability of councils’ waste collection services, considering the loss of profit from the sale of valuable materials. A mechanism for sharing revenues from unreturned deposits is one potential solution that would be welcomed by both local authorities and MRF operators. The Government also needs to assess how the DRS will interact with the broader policy packaging landscape in the UK, and how interoperability can be achieved given the differences between devolved governments. Furthermore, consumer engagement strategy before and after the rollout date will be important to ensuring that consumers are aware of the policy, know how it operates and can actively participate in its implementation from 1 October 2027. Finally, to avoid confusion and mistrust, the Government will need to reassure investors, local authorities, businesses and recyclers that the DRS will go ahead on the agreed date.
Provided the Government resolves these remaining issues, the UK’s DRS has great potential to succeed in driving up collection rates for valuable materials and cutting single-use litter.
The author would like to thank Daisy Jameson, Sini Matikainen and Chris Raggett for their review of an earlier version of this commentary.