Government Response on DRS for drinks containers
The response sets out how our government plan to introduce the scheme in these 3 nations.
The government response was published amid growing concerns and speculation of a delay to the Scottish scheme, which is due to go live earlier than in the other nations, on 16 August 2023. Whilst a delay to the Scottish scheme has not been confirmed, we have had some key information confirmed on how a DRS will be implemented in England, Wales, and Northern Ireland.
Key takeaways from the government response
Timelines
The current target for go live in England, Wales and Northern Ireland is 1 October 2025. This is the earliest the scheme could go live and is a stretching target, so could be pushed back further.
2023 activities:
- Government is finalising legislation which will be laid in parliament and legislated by 2023-end.
2024 activities:
- Appoint Deposit Management Organisation (DMO)
- DMO make design decisions e.g. labelling and deposit level
2025 activities:
- Broader industry moves into DRS roll out
- Commencement date 1 October
- The DMO, producers, and retailers, will all have a role in the implementation and ongoing operations of the DRS.
Deposit Management Organisation (DMO)
A Deposit Management Organisation (DMO) will be appointed to manage the overall operation of DRS and meet collection targets set in the regulations, on behalf of all registered producers. The DMO will be an independent, not for profit and private organisation(s). There is potential for multiple DMOs appointed, which if appointed must coordinate their approach.
DEFRA are going ahead with an application process set out in the regulations, rather than through a competitive tender process, which will reduce government costs and be more time efficient.
Key responsibilities of the DMO:
- Design of the scheme e.g. setting the deposit level and labelling details
- Obligation to meet collection targets of in-scope drinks containers on behalf of all producers (producers must register with DMO once established)
- Work with the Scottish scheme to explore interoperability and reciprocal return arrangements between schemes
Obligated producers
Producers obligated in the scheme are defined as brand owners or manufacturers of drinks, and importers. The manufacturer of the physical drink container is not meant by manufacturer here, this scheme is intended to target the brand/manufacturer/importer of drinks.
Producer obligations:
- Report number of drinks placed on the market data to the DMO, by nation
- Place the deposit on containers when sold
- Register with DMO (applicable to all producers of in-scope material)
- Pay a producer registration fee to the DMO to fund set up and operational costs of the scheme
Retailers
A retailer is a person or organisation that sells an in-scope container directly to a consumer.
Retailer obligations:
- Add the deposit value to the purchase price of in-scope drinks
- Clearly display pricing information of the in-scope container and the attached deposit value
- Operate a return point for the scheme (with limited exceptions applied for through the DMO) through a reverse vending machine or through a manual takeback service
Financial flows
The DMO will seek private finance to fund the start-up of the organisation and scheme, implementation and operational costs of the scheme from day one. Beyond this, the scheme will be funded by:
- Revenue from material collected in the scheme and sells to reprocessors
- Producer registration fees
- Unredeemed deposits
Producer registration fees: to set these, the DMO will consider the size of producer and number of containers placed on the market.
Deposits: variable deposit values are an option, or a fixed deposit value could be selected; the DMO will determine this.
Outputs of the scheme: collection targets
The scheme is required to meet 90% collection target within 3 years of operation, meaning 90% of in-scope containers placed on the market must be returned and collected through the scheme. Collection targets will be required to be met separately in Engand, Wales and Northern Ireland, to enable reporting segregated by nation.
Collection targets will be phased in using the following approach:
- Year 1: 70%
- Year 2: 80%
- Year 3: 90%
The reporting period for collection targets will be based on the calendar year, commencing on 1 January – 31 December on any given year. From year 3, each material in scope must achieve a minimum 85% collection rate to avoid one material subsiding the 90% collection targets for other materials.
Collections targets will transfer to the DMO when producers register, meaning the DMO will have the obligation to fulfil the collection target on behalf of registered producers. Monetary penalties will be imposed on the DMO if the scheme fails to meet collection targets.
Obligating drinks containers ahead of DRS commencement
Drinks containers that will be in scope of England, Wales, and Northern Ireland DRS from 1 October 2025 will have a packaging compliance obligation during that intervening period.
Producers of in-scope drinks containers being placed on the market in England, Wales, and Northern Ireland, prior to DRS introduction, must still obtain PRNs to offset their obligation in the interim period.
Producers will not pay EPR fees on DRS in-scope material in the interim, given the primary focus should be on preparing for the DRS to go live. It is worth noting that as glass is not in-scope of DRS in England and Northern Ireland, it will be in scope of EPR thus EPR fees will be raised on these drinks containers. Additionally, producers will be required to pay fees on glass containers placed on the market in Wales during the interim period, to make this consistent with requirements on glass in scope of EPR in England and Northern Ireland.
EPR/PRN obligation on drinks containers from 2023-2025:
DRS and EPR/PRN obligations on drinks containers from 2026 onwards:
Get in touch with the team today at solutions@beyond.ly to get moving and find out how we can support you through DRS implementation!