Deposit Return Scheme (DRS) systems make producers of single-use drinks packaging legally responsible for the collection and preparation for recycling of the containers they put on the market.

This guide outlines the design of the scheme, and the associated responsibilities for drinks producers and return-point operators and details of what action should be taken now.

Important to know

It was announced on 7 June 2023 that the Scottish Deposit Return Scheme (DRS) will be delayed again until October 2025, the expected launch date for the rest of the UK nations. The latest delay is at least partly due to the UK parliament’s decision on 27 May 2023 to grant Scotland an exemption from the Internal Markets Act (IMA), on the provision glass bottles are excluded from the scheme. It is unclear yet if Scotland will exclude glass when the scheme does eventually go live. Other details of the Scottish DRS explained below may also be subject to change, but will be updated when confirmed.

Scheme operation

Scheme articles

When the DRS is live, consumers will pay a flat rate deposit of 20p on every single-use drink container between 100ml and 3L that are made of:

  • PET plastic

  • Glass (note that since 7 June 2023 glass is now unconfirmed as a material)

  • Steel or aluminium

Important to know

On 20 April 2023 the Scottish Circular Economy minister announced that drinks containers under 100ml will be excluded, removing miniatures and other small containers from the scheme. Previously it was communicated that containers from 50ml would be included, but that is no longer the case.

Specifically, to be defined as a ‘scheme article’, containers sold on or after the go-live date should additionally be produced with the intention of being sold in Scotland, be ‘mostly made’ from the above materials, and be sealed. This means a pouch would not be in scope of the Scottish DRS, but a plastic bottle with a lid/ring seal/outer plastic wrap would be, as these don’t form a large proportion of the packaging.

Additionally, items such as takeaway coffee cups will not be considered a scheme article as they are not sealed in a watertight and airtight way at the point of sale or before consumption.

When consumers return the empty container to a designated collection point, they can redeem their 20p deposit.

Scheme management

The DRS will be managed by scheme administrator Circularity Scotland (CS) and will be funded via three streams – unredeemed deposits, producer fees, and the sale of collected containers for recycling. Producers are not legally obliged to appoint CS to discharge their obligations on their behalf, but it is anticipated that most of them will. If not, producers can individually fulfil their obligations by collecting and recycling their own containers.

It is important that producers and CS fulfil their duties under the DRS, as the existing legislation sets out a legal obligation for an eventual 90% overall collection rate of in-scope containers. SEPA have powers to enforce criminal penalties and civil enforcement measures on producers, CS, and retailers who fail to fulfil their legal obligations.

Financial flows

There are three key financial flows in the Scottish DRS:

The 20p deposit will move through the system from producer to consumer ensuring it is ‘cost neutral’ for all parties. The producer will be invoiced by CS for the deposit amount they are liable for, and they will in turn pass the cost along the supply chain until it is redeemed by the consumer.

The producer fee is a financial flow that encompasses the ‘polluter pays principle’, as the DRS is a form of Extended Producer Responsibility. It means producers are more financially responsible for the packaging they place on the market. The fee would go toward the management of the scheme. If a producer hasn’t appointed CS, they would not pay this fee but the cost of managing their obligations themselves would likely be equivalent or higher.

There will also be a SEPA registration fee of £365 for producers with an annual turnover of over £85,000.

Finally, a handling fee is supplied to retailers operating a return point to ensure it is cost-neutral for those businesses. The handling fee will cover outgoings such as labour and equipment related to container collections. The handling fee is paid by CS with funds gained from the producer fees, the sale of recyclable materials, and unredeemed deposits.

Producer required actions

Producers are defined in the legislation as the owner of the brand or, if based outside of the UK, the first importers of in-scope drinks packaging.

All liable producers need to register annually with the Scottish Environment Protection Agency (SEPA), either directly or via scheme administrator Circularity Scotland. SEPA will publish a list of scheme participants – largely so retailers can identify which drinks packaging is in-scope of the scheme.

Registration is now open with deadline of 12 January 2024 - however, this may change following news in June 2023 that the launch date has been pushed back to October 2025.

The regulator will publish and maintain a list of all producers who are registered to market and sell their drinks in Scotland after the deadline. Producers may appoint CS to register on their behalf. Upon registration you will need to provide:

  • Contact details for your business, and a named contact person

  • Data on the number of containers you placed on the market in Scotland in the previous and current financial years (broken down by type of packaging material)

  • Information to help identify your products – e.g. branding or barcodes

Producers will also need to report data monthly to CS if using the administrator to fulfil their obligations for them. The data may include barcode type, the presence of any DRS scheme identifier such as a label, the drink type, and the container volume. This is so they can be invoiced for both the producer fee – essentially the polluter payment for packaging waste placed on the market - and the total deposit amount – which is recovered when the products are sold on by the producer.

Producers may also voluntarily indicate their packaging is part of the DRS by adding labels or unique barcodes. There is currently no legal requirement to change the labelling on your packaging, but CS may set out anti-fraud measures in future (such as on-pack labelling or Scottish specific barcoding), and producers must have a reliable method for identifying containers sold in Scotland. It is likely that a surcharge will be put onto producer fees un-labelled containers, or for those with a UK-wide barcode, to reflect the increased risk of fraud or non-returns.

Important to know

On 21 February 2023, Circularity Scotland announced a £22m support package to alleviate the administrative and financial pressures producers will face when the Scottish DRS goes live. More information about this important update can be found towards the end of this article.

Important to know

On 20 April 2023, the Scottish Circular Economy minister announced that products that sell fewer than 5,000 units per year will be excluded from the Scottsih DRS, which will particularly benefit craft producers.

Retailer required actions

Retailers also have requirements under the DRS. These are to:

  • Charge a deposit to consumers on all in-scope containers sold

  • Ensure it is clear to consumers that the containers are part of the scheme and also indicate where non-scheme containers are being sold

  • Display the deposit value separately to the price of the drink

  • Clearly show how consumers may redeem their deposit in-store

SEPA will publish information detailing all participating producers to ensure it is clear which products are in and out of scope.

During the first phase of the scheme retailers may hold older stock that does not have a deposit associated with it. These will be sold as normal, but retailers are required to clearly communicate those items are not included in the DRS.

Return points

Retailer return points

Circularity Scotland state over 17,000 return points will eventually be in operation. Whereas retailers (including those operating online) will be obliged to host them, community organisations can also voluntarily host collection points. Hospitality premises that sell the majority of drinks products for consumption on the premises will be exempt from acting as a return point.

All retailers that sell drinks will have a legal requirement to accept returns of empty drinks containers unless exempted, at each store. This may be done by setting up a manual collection system, or by leasing a Reverse Vending Machine.

All those hosting a return point will be eligible to receive a handling fee to cover operational costs. The scheme administrator will collect empty containers free of charge, potentially reducing private waste collection costs for hospitality businesses.

The legislative requirements for those operating return point include:

  • Accepting all in-scope containers from consumers (even if you don’t sell that type of drinks packaging)

  • Redeeming the consumer’s deposit

  • Holding the packaging until collected by CS

  • Providing a complaints procedure and contact details, including those for SEPA

Return points may refuse a return if the container is not empty, is not identifiable as in-scope packaging, is soiled, or CS has failed to execute a planned collection.

Every in-scope container that is returned to store will have a handling fee associated with it. This fee will cover operational costs such as the lease and maintenance of reverse vending machines, rental value of store space used, and staff time.

Distance seller take-back

Distance/ online sellers will be required to offer takeback from the site of delivery to consumers who have directly purchased in-scope items from their business. In addition to charging the consumer the deposit you may also temporarily charge them for the use of the take-back service, but both these must be refunded once the container has been returned.

Those providing a take-back system are also eligible to receive a handling fee – this will cover outgoings such as vehicle costs, delivery costs and staff time.

Hospitality businesses

Businesses that sell drinks to takeaway and those that sell drinks to be consumed on-site have different responsibilities:

  • If you sell any drinks to take away you will be defined as a “retailer” and therefore must charge the deposit and operate a return point. You will receive the full handling fee.

  • If you are a hospitality business selling the large majority of drinks for on-site consumption, you will be exempt from operating as a return point.


Retailers can apply to the Scottish Ministers for an exemption to hosting return points. Exemptions are available to on-site consumption premises and duty-free shops.

Other than that, two criteria must be met to be eligible:

  • There is an alternative return point located within reasonable proximity, and the other operator has agreed to accept the returns on your behalf

  • If the exemption is granted, consumers will still have reasonable access to a return point locally

There is an additional exemption available if a premises can satisfy ministers that there is no reasonable way of operating a return point without risking being in breach of relevant legal obligations, such as food safety.

VAT update

On 14 February 2023, it was announced that the Scottish government and HM Treasury had agreed on the long-standing issue of Value-Added Tax (VAT) charges and the 20p deposit that will be charged on all in-scope containers of the Scottish deposit return scheme (DRS), when it is live.

This decision necessitates a change to the UK’s VAT legislation, which is expected to be announced at the 2023 Spring Budget, with an accompanying technical consultation. This means the below may change, but businesses should start preparing for the following:

  • At the point of sale, no VAT will be charged on the 20p deposit amount. VAT for the price of the drink itself will remain.

  • VAT will be due, however, on any deposits that remain unredeemed if a consumer does not return them to claim back the deposit.

In the case of unredeemed deposits, the producer – a brand-owner or importer – who originally charged the 20p must account for VAT, if the drink they supplied was standard rated. Standard rated relates to goods for which the normal level of VAT must be paid. This means no other businesses along the supply chain, such as retailer, must account for VAT at any time.

Producers will calculate the VAT due on unreturned deposits based on their total DRS sales less DRS returns. This means information on returned containers will need to be collected at return points and producers notified. Most producers will have signed up to the scheme administrator, Circularity Scotland, who will do this on their behalf.

If containers are returned in a later VAT accounting period they can be included in the next calculation, ensuring the right amount of VAT is paid. We expect more information on how this will work after the legislation is revised.

£22m DRS launch support package update

On 21 February 2023, Circularity Scotland announced a £22m support package to alleviate the administrative and financial pressures producers will face when the Scottish DRS goes live.

The measures announced will mainly assist SMEs, who have been particularly vocal about the impact the scheme will have on their businesses. 

Cash flow support will apply to businesses putting less than three million in-scope single-use drinks containers on the Scottish market per year. This is to ensure the £22m budget benefits smaller producers liable in the system to a greater extent. The measures include:

  • There will no longer be a ‘day-one’ charge for producers electing not to apply a Scotland-specific European Article Number (EAN)/barcode

  • There will also no longer be a ‘month-one’ charge on producer fees and deposits on all in-scope containers

The second suite of measures in the support package concerns credit terms and are applicable to all producers, regardless of size. Every producer will be entitled to two months' credit terms on deposits, producer fees and surcharges on ‘retained’ (non-Scotland specific) EAN/ barcode fees.

There will also be improved payment terms for lower sales volumes, simpler labelling options for niche products and small producers and the removal of upfront charges. For instance, those placing less than 25,000 units per year on the Scottish market will now have the option to use self-adhesive barcode labels, as opposed to changing their packaging formats entirely.

The announcement will likely particularly help the cash flow of businesses such as craft breweries and distilleries, who may otherwise have chosen to no longer participate in the Scottish market.

Find out more on

Interaction with other UK DRS

England, Wales and Northern Ireland will be implementing a DRS in 2025 as well. We only have some details from government on how these systems will operate.

Ireland meanwhile is set to implement their DRS in February 2024.

DRS implementation table

It has been confirmed that England and Northern Ireland will exclude glass from their DRS, but Wales will not. We do not yet know how the systems will interact but there may be complications for those putting glass bottles on the market.

It is also likely that the three nations will not implement a flat deposit rate, unlike Scotland, meaning there could be further complications and risks of fraud where different deposit amounts apply to different countries.

How Ecosurety can support you

We can help ensure that you have the necessary high-quality data captured to enable future reporting requirements. This data can also enable our data specialists to provide you with early DRS cost modelling, based on the information we currently have from government.

We can conduct this work alongside other services such as EPR and plastic packaging tax preparation and modelling, to help you achieve a holistic understanding of your future exposure to costs, and opportunities to mitigate those costs.

Ultimately this can help you to improve the environmental credentials of the packaging that you produce.

Find out more here about our data services that can help you prepare.

Any other questions you may have

If you have a question on DRS which is not captured in this article, our team of experts will be happy to help you. Please contact your account manager directly, call us on 0333 4330 370 or send an email to

External references

Find out more about the Scottish DRS on

Find out more about Scheme administrator Circularity Scotland

Louisa Goodfellow, Policy Advisor

Louisa Goodfellow

Policy Manager

As Policy Manager Louisa provides key support to our team, including preparing reports on environmental policy issues and maintaining awareness of new developments.

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