Ecosurety response to the 2021 Introducing a DRS in England, Wales and Northern Ireland consultation

Introduction

On 24 March 2021 the government released the second round of consultations for two inter-connected packaging policy reforms covering Extended Producer Responsibility (EPR) for Packaging and Introducing a Deposit Return Scheme (DRS) in England, Wales and Northern Ireland. A second consultation for consistency in household recycling collections was also released on 7 May 2021.

The results of these consultations will have a huge impact on packaging producer responsibility beyond 2023 as the proposals represent radical reform to the way in which producers are held accountable for the packaging they create/sell.

Key information

The DRS consultation impacts England, Wales and Northern Ireland.

The deadline for consultation responses was 4 June 2021.

You can view the original Introducing a Deposit Return Scheme (DRS) in England, Wales and Northern Ireland consultation document by clicking here which contains the questions referenced below.

Watch video

In addition to the guidance below, you can also watch a video of a webinar recorded on 20 May 2021 presented by policy advisor Louisa Goodfellow and head of innovation and policy Robbie Staniforth, to inform stakeholders about the Ecosurety response to the Deposit Return Scheme for England consultation.

The Ecosurety response

While we remain broadly supportive of implementing a DRS it is clear that, with very little time to go, there are still important decisions to be made and much clarification needed. We propose that as Scotland and Wales have already set key decisions in stone, as much regulatory alignment as possible will give the best chance of an efficient system.

From a wider perspective, we also think it is essential that the DRS works efficiently with, and is seen as a component of, EPR reforms. The two should be harmonised and UK wide. This document outlines our full consultation response.

Please note that we only responded to the questions where it was relevant for us to do so.

Question 6: Given the context of the Covid-19 pandemic we are currently experiencing, do you support or oppose our proposals to implement a deposit return scheme for drinks containers in 2024?

a) Support.

But we would caveat that delays resulting from the Covid-19 pandemic, in addition to the delayed progress of the Environment Bill, has left very little time to ensure the DRS design is fit for purpose.

Question 7: Do you believe the introduction of a deposit return scheme will have an impact on your everyday life?

a.) Yes, a detrimental impact.

If yes, how significant?

c.) Large impact but still manageable

Question 8: Have your views towards implementation of a deposit return scheme been affected following the economic and social impacts of the Covid-19 pandemic?

c) Yes – because of both economic and social impacts

Covid-19 has had significant impacts on society, meaning re-evaluation of new legislation is required. However, rather than lessening the requirement for new rules, it reinforces the need to transition to a more equitable society. Environmental initiatives form a vital part of legislative plans to “build back better”.

Chapter 1: Scope of the deposit return scheme

Question 9: Do you agree that the cap should be included as part of the deposit item in a deposit return scheme for… a) Plastic bottle caps on plastic bottles b) Aluminium bottle caps on glass bottles c) Corks in glass bottles d) Foil on the top of a can / bottle or used to preserve some drinks

Yes to all. All primary packaging should be in-scope under the DRS, if only for consumer clarity. It would be overly confusing if, for instance, a bottle cap was in-scope but a cork was not.

Question 10: Do you believe we have identified the correct pros and cons for the all-in and on-the-go schemes described above?

Yes.

Question 11: Do you foresee any issues if the final scope of a deposit return scheme in England and Northern Ireland does not match the all-in decision taken in Wales? E.g. an on-the-go scheme in England and an all-in scheme in Wales.

Yes. There would be logistical issues for producers and the DMO. It may also cause consumer frustration and confusion, which could be problematic considering research states simplicity is key for high collections. There is also an increased risk of fraud. Each point of difference between schemes risks division within the UK drinks market and producers.

Question 12: Having read the rationale for either an all-in or on-the-go scheme, which do you consider to be the best option for our deposit return scheme?

All-in. The main rationale for this is to align with Scotland and Wales. As much alignment as possible will provide the best chance of an efficient system. The ‘all in’ model should not exceed 3L as is the case in Scotland.

Containers larger than this are far better served under the EPR scheme, which is the more comprehensive policy tool, and are unlikely to be consumed outside of the household or hospitality venues. It would also risk unworkable take-back arrangement due to size differentials, further increased costs to industry, and un-recoupable losses to LA waste streams.

It is worth noting here that the impetus for a DRS is to reduce litter, and provide a clean waste stream for recycling. The recent summary of impacts makes estimates on the assumption of an ‘all in’ model, but states the DRS will be responsible for 5.5% of estimated total carbon savings, whereas consistent collection will account for 87%. The scope of the DRS should not be so large as to undermine the current waste collection systems, that could be improved with targeted policy-making, which have the potential for much more significant environmental gains.

Question 13: Given the impact Covid-19 has had on the economy, on businesses and consumers, and on everyday life, do you believe an on-the-go scheme would be less disruptive to consumers?

No. A DRS system will be disruptive to some consumers if there is no way to dispose of the item and redeem deposits paid at the kerbside. If there is no digital DRS system consumers may essentially be penalised for recycling at the kerbside, if they do not have access to a return point.

Question 14: Do you agree with our proposed definition of an on-the-go scheme (restricting the drinks containers in-scope to less than 750ml in size and excluding multipack containers)?

No. If an ‘on the go’ system was chosen, multi-pack containers should not be excluded but instead a variable deposit applied. Excluding multi-packs would risk producers, for instance, binding two containers together using increased plastic packaging.

Question 15: Do you agree that the size of containers suggested to be included under an on-the-go scheme are more commonly consumed out of the home than in it?

No. Containers under 750ml are likely to be consumed both ‘on the go’ and in the household. Containers over 3L are more unlikely to be consumed outside of the household.

In-scope containers should be analysed in terms of their suitability for a DRS system, the environmental impact, and regulatory alignment as opposed to consumer behaviour characteristics.

Question 16: Please provide any information on the capability of reverse vending machines to compact glass?

Not sure. Will need to research further.

Question 17: Do you agree that the scope of a deposit return scheme should be based on container material rather than product?

Yes.

Question 18: Do you agree with the proposed list of materials to be included in scope?

Not sure. Glass bottles could be better served in re-use schemes and kerbside collections, which currently produces good recycling rates. The infrastructure needed to accommodate glass take-back to enable re-use or remelt is likely to be much more costly and logistically difficult for little environmental benefit.

Question 19: Do you consider there will be any material switching as a result of the proposed scope? Please provide evidence to support your response.

Yes. There will always be material substitution based on new rules. It is an inherent feature.

Chapter 2: Targets

Question 20: Which of the following approaches do you consider should be taken to phase in a 90% collection target over 3 years?

Approach A. Within the first year, it would be better to have an achievable target that can be built upon after the DRS has been established and fully functional. We would also like to understand how, if statutory targets are in place, council targets would be adjusted accordingly. We would advocate for harmonised targets that are UK-wide, and integrated between EPR, DRS and consistent collections.

Question 21: What collection rate do you consider should be achieved as a minimum for all materials after 3 years?

B. Studies of other countries show this is achievable. A lower collection target per material would risk more highly collected material ‘taking up the slack’.

Question 22: Is it reasonable to assume that the same collection targets could be met with an on-the-go scheme as those proposed for an all-in scheme for in-scope materials?

No. The material composition of ‘all in’ containers will more likely be weighted toward PET bottles, and other plastics. There are few aluminium cans formats, for instance, exceeding 750ml.

Question 23: Who should report on the volumes of deposit return scheme material placed on the market in each part of the United Kingdom (England, Wales and Northern Ireland) for the proposed deposit return scheme, and what would be the implications of these obligations?

c). The producer/importer will be in the best position to do this, due to existing reporting systems within the current packaging regulations. They will also have oversight as to where their product is being sold. Retailers will have significant duties in collection returned material, and as they are not the accountable party it may be unreasonable to expect them to report too.

Question 24: What evidence will be required to ensure that all material collected is passed to a reprocessor for the purpose of calculating the rate of recycling of deposit return scheme material?

Unsure. Will need further research. As the evidence point will be ‘front of furnace’, like within the current packaging waste system, could the reprocessors issue something similar to a PRN?

Chapter 3: Scheme governance

Question 25: What length of contract do you think would be most appropriate for the successful bidder to operate as the Deposit Management Organisation?

b). We believe a 5-7 year contract allows for strategic planning and a longer term focus within the DMO, but is not so long that an operationally inefficient body will become complacent.

Question 26: Do you agree that the above issues should be covered by the tender process?

Yes.

Question 27: Do you agree that the above issues should be monitored as Key Performance Indicators?

Yes.

Question 28: Do you agree that Government should design, develop and own the digital infrastructure required to register, and receive evidence on containers placed on the market on behalf of the Deposit Management Organisation and regulators?

Yes, a coherent digital infrastructure will be crucial in future-proofing the scheme and allowing for flexibility. Digital infrastructures will also need to be built around EPR and the plastic packaging tax. We advocate these are as harmonised as possible.

Could this digital infrastructure form part of a future national materials datahub? A centralised digital waste infrastructure should be transparent and incentivise secondary material markets.

Question 29: Government will need to understand the needs of users to build digital services for deposit return scheme. Would you like your contact details to be added to a user panel for deposit return scheme so that we can invite you to participate in user research (e.g. surveys, workshops interviews) or to test digital services as they are designed and built?

Yes.

Chapter 4: Financial flows

Question 30: What is an appropriate measure of small producers for the purposes of determining the payment of registration fees?

A) Taxable turnover. This should be aligned with the de minimis to be decided under the EPR regime.

Question 31: Is a high level of unredeemed deposits funding the scheme problematic?

Yes. A high level of unredeemed deposits signals the DRS is not collecting the desired material. It is also an uncertain revenue stream - whereas finances from unredeemed deposits may reduce producer fees on an annual/ short-term basis, certainty of costs is also important to those paying the fees.

Question 32: Which option to treatment of unredeemed deposits do you support?

Option 2.

Question 33: With option 2, do you foresee any unintended consequences of setting a minimum percentage of the net costs of the deposit return scheme that must be met through the producer fee?

Not sure. Needs further research. If the minimum producer fee is set this will give a level of certainty to DMO funding, although the fee level will need to be carefully considered.

Question 34: If a floor is set do you consider that this should be set at: a) 25% of net costs b) 33% of net costs c) 50% of net costs d) Other

b). This reduces the risk that unredeemed deposits fund most of the system but will not disincentivise the DMO to increase collections, and sale of material.

Question 35: Do you agree that any excess funds should be reinvested in the scheme or spent on other environmental causes?

Invested in the scheme. Surplus funds from unredeemed deposits should be earmarked for improving the system and investment into recycling technologies.

Question 36: What should be the minimum deposit level set in legislation?

10p.

Question 37: Do you agree that there should be a maximum deposit level set in legislation? If yes, what should be the maximum deposit level set in legislation?

Yes. 50p.

Question 38: Recognising the potentially significant deposit costs consumers could pay on a multipack purchase, how best can we minimise the impact of the scheme on consumers buying multipacks?

Variable deposit level for multipacks. As in the German case study, a deposit per item within multipacks caused a significant shift toward larger plastic containers. Similarly, having a flat rate for containers that are, for instance, 750mls and 3L may well result in a consumer shift to larger formats. Every can in a 6-pack multipack could have a 10p deposit, and 3L could have a 40p deposit.

Question 39: Do you agree with our approach to letting the Deposit Management Organisation decide on whether to adopt a fixed or variable deposit level, particularly with regards to multipacks?

Yes. As the stated criteria of the DMO is that it is comprised of a range of experts and stakeholders, it will be best placed to make a decision that does not result in unwanted outcomes.

Chapter 5: Return points

Question 40: Do you agree that all retailers selling in-scope drinks containers should be obligated to host a return point, whether it is an all-in or on-the-go deposit return scheme?

Yes. There should be a narrow exemption for retailers with very little floor space.

Question 41: Given the proposed extensive distribution and availability of return points for consumers to return bottles to, do you think customers would be likely to experience delays / inconveniences in returning drinks containers? If so, how long or how frequently would such delays be likely to arise for?

Not sure.

Question 42: Do you have a preference, based on the 3 options described above, on what the schemes approach to online takeback obligations should be?

Option 2.

Question 43: Do you agree with the proposed criteria for the calculation of the handling fee? Would you propose any additional criteria are included for the calculation of the handling fee?

Yes.

Question 44: Please tick which exemptions you agree should be included under the scheme.

Both.

Question 45: Please can you provide any evidence on how many small and micro-sized retail businesses we might likely expect to apply for an exemption to hosting a return point, on the grounds of either close proximity to another return point or on the compromise of safety considerations?

Not sure. Further research is required.

Question 46: Do you think obligations should be placed on retailers exempted from hosting a return point to display specific information informing consumers of their exemption? If yes, please tick what information retailers should be required to display.

Yes (a and b). Although mandated signage could result in a loss of business to retailers who do not/ can not host return points, so it would be better they have a choice. It is likely that retailers hosting return points, along with smart bins etc, would be clearly signed.

Question 47: Do you agree with our rationale for not requiring retailers exempted on the basis of a breach of safety not to be required to signpost to another retailer?

Yes.

Question 48: How long do you think exemptions should be granted for until a review date is required to ensure the exemption is still required?

b). This would reduce an unnecessary administrative burden, whilst being regular enough to monitor changing retail conditions.

Question 49: Do you think the scheme could benefit from technological solutions being incorporated as a method of return, alongside reverse vending machines and manual return points?

Yes. We believe there are numerous benefits to be gained from digital DRS systems. Not least consumer convenience, accessibility to those who cannot access physical return points, and the ability to apply unique variable deposits to individual items. Allowing for digital return system will future-proof the DRS.

Currently, it’s estimated that around 88,000 return points will be required, 37,000 of which will be RVMs. The cost of infrastructure could be greatly reduced when allowing for digital solutions.

Question 50: How could a digital deposit return scheme solution be integrated into existing waste collection infrastructure?

There are a number of emerging technologies in this area. For instance, unique product identifiers are being developed that can be picked up by both MRF scanners and smart phones. This could potentially allow consumers to redeem their deposits when using the kerbside collection system.

Question 51: What are the potential fraud control measures a digital deposit return scheme could bring?

Unique tagging of packaging components highly decreases the risk of fraud within the system. We have taken part in a PolyTag trial for a digital DRS and sequential marking is very possible to ensure low levels of fraud.

Question 52: Do you think a digital deposit return scheme could ensure the same level of material quality in the returns compared to a tradition return to retail model, given containers may not be returned via a reverse vending machine or manual return point where there is likely to be a greater scrutiny on quality of the container before being accepted?

Not sure. The implication in the consultation document is that kerbside recycling is lower quality than material returned through a conventional DRS. However, we believe the adoption of a digital DRS may increase the quality through greater levels of public engagement. It will undoubtedly increase the quality from kerbside status quo but whether it is equivalent to conventional DRS quality requires further case studies and trials.

Question 53: If the digital deposit return scheme system can be integrated into the existing waste collection infrastructure would its implementation and running costs be lower? Please provide evidence to support your answer.

Yes. Digital systems and the use of existing kerbside infrastructure will reduce the need for costly RVMs, personnel for manual take-back, collections, sorting etc. The UK is only the second the country to implement a DRS whilst having an existing kerbside collection system, this is an opportunity to harmonise/ integrate the two.

Question 54: Do you support the proposal to introduce a new permitted development right for reverse vending machines, to support the ease of implementation for the scheme?

Yes.

Chapter 6: Labelling

Question 55: Do you agree that the following should be part of a mandatory label for deposit return scheme products?

a) an identification marker that can be read by reverse vending machines and manual handling scanners. b) a mark to identify the product as part of a deposit return scheme. c) the deposit price.

a), b) and c).

Question 56: Are you aware of further measures that can be taken to reduce the incidence and likelihood of fraud in the system?

Not sure. Further research required.

Question 57: Do you agree with our proposals to introduce mandatory labelling, considering the above risk with regards to containers placed on the market in Scotland?

Yes. It is unlikely there are many large producers whose products originate/ are imported only from Scotland, and therefore unlikely packaging formats will be unlabelled as, to save costs and administration, producers will probably change their labelling for all in-scope containers regardless of where they are being sold in the UK. It will be in the interests of those producers whose containers only originate from Scotland to apply a DRS label for consumer convenience. Any labelling requirements should be at the discretion of the DMO, and as much aligned as possible between nations.

Question 58: Do you consider the risk of incorrectly labelled products entering the markets of England, Wales or Northern Ireland via Scotland to be a significant risk? Please provide any evidence to support your answer.

Yes. The biggest risk will be producers who do not apply a barcode/ QR code to accommodate digital infrastructure and RVMs.

Public messaging should be clear enough that consumers know which products are in-scope, to counteract any confusion that may arise if some containers remain unlabelled.

Question 59: Do you consider leaving any labelling requirements to industry to be a better option than legislating for mandatory labelling requirements? Please explain your answer.

No. The fundamental requirement to label containers should be laid down in legislation for consistency, and to avoid adverse outcomes. What labels and how they should be presented should at the discretion of the DMO.

Question 60: Are you aware of any other solutions for smaller producers who may not currently label their products? Please explain your answer.

Not sure. Requires further research.

Question 61: We believe 18 months is a sufficient period of time for necessary labelling changes to be made. Do you agree?

Not sure. Requires further research with packaging experts

Question 62: Will your processes change as a result of mandatory labelling?

N/A

Question 63: Do you agree that our proposed approach to labelling will be able to accommodate any future changes and innovation? Are you aware of any upcoming technology in the field of labelling?

Yes. https://www.polytag.co.uk/

Chapter 7: Local authorities and local councils

Question 64: Do you agree that local authorities will be able to separate deposit return scheme containers either themselves or via agreements with material recovery facilities to regain the deposit value?

Yes. We believe that, via contractual arrangements for the majority of LA’s with MRFs, there will be enough financial incentive in unredeemed deposits to agree sorting arrangements. Sorting infrastructure is already in place, and will eventually increase with the onset of consistent collections and financial stimulation via EPR.

Question 65: Do you agree that local authorities will be able to negotiate agreements with material recovery facilities to ensure gate fees reflect the increased deposit values in waste streams or a profit sharing agreement on returned deposit return scheme containers was put in place?

Not sure. It seems reasonable that profit sharing agreements will be beneficial to both under contractual arrangements.

Question 66: In order to minimise the risk of double payments from the Deposit Management Organisation to local authorities, where should data be collected regarding the compositional analysis to prevent the containers then being allowed to be redeemed via return points?

Not sure. Requires further research. FPOC / ‘front of furnace’? If a digital DRS is implemented in the future that allows consumers to redeem their deposits at the kerbside this could further complexify DMO payments to LAs.

Question 67: How difficult do you think this option would be to administer, given the need to have robust compositional analysis in place?

It will be difficult to initially gain the required granularity in composition. However this, and waste flow data generally, will be integral to the DRS, EPR and consistent collections. Compositional analysis will be needed throughout all three regimes – for instance when calculating producer litter payments under EPR and for the proposed waste datahub. It will be in the LA’s interest to improve their analysis methodologies, to receive DMO funding.

Question 68: What option do you think best deals with the issue of deposit return scheme containers that continue to end up in local authority waste streams?

Option 3. This is the only option that removes the risk of double payments to LA’s, whilst also paying them for their collection of in-scope material. It also allows for flexibility depending on individual LA infrastructural provisions. For instance, if there is no ability to sort DRS material and redeem the deposit directly the LA can rely just on the funding formula. Payments via the funding formula could be harmonised with producer payments under EPR, further integrating the two systems.

Chapter 8: Compliance monitoring and enforcement

Question 69: Are there any other producer obligations you believe the Environmental Regulators should be responsible for monitoring and enforcing?

No.

Question 70: Are local authorities (through the role Trading Standards and the Primary Authority Scheme) best placed to enforce certain retailer obligations?

Yes.

Question 71: In addition to those in the table, are there any other types of breaches not on this list that you think should be? If so, what are they? These may include offences for participants not listed e.g. reprocessors or exporters.

Not sure.

Question 72: Are there any vulnerable points in the system? Please explain your answer?

Not sure.

Question 73: Do you see a role for the Deposit Management Organisation to seek compliance before escalating to the Regulator?

Yes.

Question 74: Do you agree with the position set out regarding enforcement response options? If not, please expand your answer.

Yes.

Chapter 9: Implementation timeline

Question 75: Do you have any comments on the delivery timeline for the deposit return scheme? Please pose any views on implementation steps missing from the above?

Yes. It is ambitious, and regrettable that it has been delayed from the original timeline. It should not be delayed to any later than 2024. If it is this could result in financial uncertainty for producers, and the rest of the supply chain, as 2024 will also be the first year of fee modulation under EPR.

Question 76: How long does the Deposit Management Organisation need from appointment to the scheme going live, taking into account the time required to set up the necessary infrastructure? Please provide evidence to support your answer.

Not sure. Need further research.

Question 77: Depending on the final decision taken on the scope of the scheme in England and Northern Ireland – all-in or on-the-go – what, if any, impact does this have on the proposed implementation period?

Not sure. Needs further research but presumably if the DRS systems are not aligned, this will extend the implementation time as different systems will need to be put in place.

Chapter 10: Summary of approach to impact assessment

Question 78: Do you agree with the analysis presented in our Impact Assessment?

Not sure.

Further information

For background information on the DRS please read our article A future Deposit Return Scheme explained.

We have a summary article giving an essential overview of the 2021 consultation for producers 2021 consultation on introducing a DRS for England, Wales, and Northern Ireland - essential summary. If you have any questions about how the DRS could impact your organisation, please contact our team.