DRS fees announced: What do producers need to know?
The UK’s Deposit Return Scheme (DRS) is moving a step closer to its planned October 2027 launch, with Exchange for Change announcing its intended producer fee structure. The announcement provides businesses with greater visibility of the potential fees associated with DRS and minimised costs for businesses at the outset, but it is just one part of a much wider programme of preparation.
DRS: What we know so far
There have been several significant DRS developments in recent months, giving producers and retailers a clearer picture of what the scheme will look like when it launches. Following its appointment for Wales in August 2026, Exchange for Change is now the appointed Deposit Management Organisation (DMO) for the UK, providing a single administrator across all four nations. The 20p consumer deposit has also been confirmed across all in-scope containers, while specifications, the Return Handling Fee, return point exemptions and support for smaller retailers have also been established.
One of the last pieces of the puzzle
The producer fees are the charges, per unit placed on the market, that drinks producers will pay to help cover the costs of operating the scheme. Following extensive consultation with industry, producer fees will be set at 0p per container for the first 15 months of DRS’s operation, which is due to go live from October 2027.
That means, until December 2028, the cost per unit for businesses will be 0p. This will minimise costs for businesses, minus the associated expenditure of updating product specifications, labelling and barcodes, required to comply with the new regulations.
From January 2029, an anticipated 0.6p per aluminium and steel container and 2.3p per PET container is expected to be introduced ‘based on current data’. The fees are due to be reconfirmed in May 2027, with annual reviews planned once the scheme is in operation.
But how can Exchange for Change (EfC) afford to charge 0p on their drinks containers?
This is a new system, there has to be public behavioural change, so we aren't expecting return rates to be >95% from the get-go.
We might be expecting, say, 45-65% return rates. At this return rate, there are lots of retained deposits (minus VAT) that can be reinvested into the system.
Once we see return rates start to increase, and that buffer start to disappear, we'll see this increase of per-unit producer costs, along with registration costs, to keep the system going. The Return Handling Fee (a per unit reimbursement to hosts of return points) being an example.
The big unanswered question...
One of the key questions that remains is how material outside the DRS system will be funded. If return rates reach around 65%, approximately 35% of in-scope drinks containers could still be entering kerbside recycling or being placed in public bins.
How is the collection and sortation of this material going to be funded? It's exempt from pEPR and so doesn't attract disposal fees or PRN obligations...
Will this additional cost be absorbed by Local Authorities? Could it be passed on to other obligated pEPR producers? Or will Exchange for Change have to support the system; using retained deposits to pay pEPR costs?
The effect on pEPR
What's also going to happen to costs under pEPR once this high-value material is removed from the system?
Gate fees will increase for the leftover aluminium, steel, and PET, pushing up disposal fees.
There will be less of this material on the market, making it harder to meet recycling targets; in an already difficult environment. Will we see a reduction in targets?
The registration costs for exporters and reprocessors has already increased this year, making it less attractive to register for PRNs and pushing up the price to cover costs. With less material available, are we going to see even higher steel and aluminium costs because of this?
And what about glass?
In Wales, glass will be included within the DRS system... but with a 0p deposit and no labelling obligations. This raises the question as to whether glass sold in Wales will be part of pEPR or DRS? Will it be subject to disposal fees and PRNs, and how will the system distinguish between glass that is sold in Wales and ultimately collected and recycled in Wales?
Th bottom line
With these final hurdles and announcements comes the assurance that DRS will now become a reality from October 2027.
Obligated producers should start assessing their product portfolios to make sure they have crossed every t and dotted every I, ensuring that they can continue to manufacture, import and sell drinks on the UK market.
Are there still outstanding questions relating to DRS and the wider packaging-related regulatory landscape? Yes. But hopefully with continued dialogue between packaging schemes, such as Beyondly, Government and other relevant parties, we should start to see the road ahead looking clearer over the coming months.
At Beyondly, we’re dedicated to keeping our customers informed of key regulatory changes and emerging developments with timely insights and expert analysis.
Explore our Policy News hub for the latest DRS and pEPR legislation updates, or get in touch with our friendly team at [email protected] or 01756 794951 to discuss how Beyondly can support your compliance journey.
