Rick Hindley, executive director at Alupro, says a ‘carefully designed’ deposit return scheme (DRS) could position the UK as a world leader in waste management – maximising environmental impact, embracing existing systems and maintaining competitiveness within the packaging industry.
Deposit return schemes (DRS) are already established in many countries worldwide; proving instrumental in reducing litter, improving recycling rates and tackling climate change.
The Department for Environment, Food and Rural Affairs (Defra) is currently developing plans to implement such a scheme across England, Wales and Northern Ireland, as part of continued efforts to drive higher national recycling rates and tackle the blight of littering.
The impact of implementing a world-leading DRS could be game changing for UK waste management. Careful planning, collaborative thinking and intricate management is therefore key.
While being welcomed by many, it must be remembered that the success of any DRS requires careful planning, collaborative thinking and intricate management. A one-size-fits-all approach fails to consider market idiosyncrasies and can lead to highly damaging financial and environmental implications.
The UK market is very different from other countries who already have an operational DRS and this must be thoroughly considered in the scheme’s development.
Harnessing expertise from those operating at the forefront of the packaging recycling industry is therefore instrumental – not only to create a well-designed system capable of delivering upon its objectives, but also to position the UK as a true world-leader in waste management. I believe that the five areas below should be positioned as key considerations.
Creating a strong regulatory framework
A successful DRS should be established by legislation and dictated by a strong, government-driven regulatory framework. This framework should guide the scheme’s structure, provide the basis of penalties for misconduct (such as fraud or non-compliance), set clear material-specific collection and recycling targets, while ensuring that all manufacturers responsible for putting containers on the market are legislated to participate.
It’s imperative that the framework should also dictate government oversight of a responsible scheme administrator. The administrator should be selected by tender – either through a statutory board (with representation from all materials impacted and the wider community), or via ministerial oversight.
Furthermore, to enable a fair and level playing field for the packaging industry, the framework should set clear guidelines on the operation of the scheme, the obligations between the government and the scheme administrator and responsibilities of participants to the scheme. The framework should be periodically reviewed to ensure it remains fit-for-purpose.
By outlining and implementing a clear regulatory framework, it will prove easier to implement and manage the scheme. Furthermore, it will guarantee clarity, prevent loopholes and detail responsibility for all parties.
Effective consortium management
Learning from best practice, such as by analysing the make-up of Norway’s highly successful DRS scheme, suggests that the management of a highly-functioning DRS should be undertaken by an industry consortium – comprised mainly of producers.
Responsible for delivering relevant services and operational requirements, the consortium should be selected through a comprehensive, government-driven tender process and be thoroughly representative of the packaging industry.
Overall operational management should be delivered through a single scheme administrator (coordinated as a not-for-profit organisation, accredited by local authorities and operated across the jurisdiction) with primary responsibility to handle deposit settlements, report centralised sales data, ensure that the system operates smoothly and meets material specific collection/redemption and recycling targets. It is imperative that the scheme administrator operates in a transparent fashion, to ensure no cross-subsidy between materials.
By managing the scheme through industry consortium, it will be possible to deliver operational requirements more effectively. In addition, delivery through a single scheme administrator will ensure uniformity, leadership and accountability – factors that would be diluted by multiple administrators.
Accessibility and coverage
A successful DRS should have a truly national scope, avoiding ‘soft borders’ to prevent cross-border arbitrage, eliminate anti-competitive behaviour and maximise consumer engagement. Coverage should comprise all consumption occasions (both ‘on the go’ and ‘at home’), i.e. an ‘all-in’ scheme.
The scheme should be easy to use, with return points for deposit redemptions located in easily-accessible locations. Redemptions should not only be performed via retailers and return vending solutions, but also through integration with existing extended producer responsibility (EPR) infrastructure (such as by building kerbside collections into scheme design). Where necessary infrastructure is limited, capital funding should be provided by the government.
The scheme should not simply rely on the use of reverse vending machines and manual redemption points. It should be designed in way that encourages and facilitates the use of emerging technology, such as app-based technology.
Consideration should also be given to ways of embracing the existing local authority kerbside collection systems, allowing local authorities to benefit from the value of the deposit where a citizen decides to forgo it and continue to recycle the container through their kerbside container – as is the case in New South Wales.
Covering all bases – whether by geography, by scenario or by collection model – will ensure that loopholes are avoided. Constraining boundaries will unnecessarily isolate markets and forgo access to valuable resources.
Categories, sizing, deposit levels and product fees
It is important for any DRS scheme to cover the widest possible range of packaging, with all material types – and container sizes – included. The only exclusion should be for materials that pose a hygiene, sanity or contamination issue when combined with other clean, high quality returned material.
Furthermore, it is essential that all material types are officially registered with the scheme administrator (and that such a process is in place) to guarantee best-practice results. The scope of covered materials should include:
- Material type – It is essential that the DRS doesn’t distort existing markets and is therefore fair and equitable across all competing materials. PET bottles, aluminium/steel cans, glass bottles and cartons should be included. Different materials have different costs to recycle and different market values, and each material must pay its way. The net cost of collection and the recyclability of the container must be fully accounted for in the product fee, which is paid by the producer for each container they manufacture.
- Container dimensions – The ideal DRS should be thoroughly inclusive. Small-to-large size containers should be included, especially containers that are typically consumed on the go, while including very large sizes would help to reduce consumer confusion.
A world-leading scheme should consider the value of the material being collected; which would offset producer fees by material value. Administration fees should be split fairly across the sales volumes of all producers covered within the scheme, while the value of unredeemed deposits should be retained by the scheme administrator to fund ongoing costs (such as improving infrastructure and communicating with consumers to drive greater recycling participation).
To deliver the best possible results, the scheme should set a low base level deposit. This would also alleviate the risk of widespread fraud, but it is important that – if the deposit isn’t delivering the desired outcome – it can be increased. It would be difficult, if not impossible, to reduce the deposit value once set.
However, despite a base level, it is fundamental for a differential deposit amount to be charged based on container size; i.e. the larger the container, the larger the deposit. Specific values must be set by the scheme administrator and clearly detailed within the legislative framework. This is commonplace in DRS models across Scandinavia, such as those in Denmark, Finland and Norway.
An ‘all-in’ DRS with variable deposit would be the perfect solution; guaranteeing the best possible results by maximising consumer engagement and ensuring inclusivity, while minimising the risk of both unintended economic and environmental consequences.
Redeeming deposits
A successful DRS scheme should look to integrate existing recycling systems, where possible and where capacity exists, to drive effective collection (such as kerbside recycling). This will help to improve geographic scope, consumer accessibility and faster overall implementation. The legislative framework should ensure that redemptions through this infrastructure are properly accounted for, to minimise the likelihood of fraud.
In addition to existing recycling systems, the return mechanism should include a ‘return to retail’ model, alongside dedicated redemption centres. For high-volume locations, the use of next-generation technologies, such as smart bins, smart bags, apps and reverse vending machines should be encouraged.
The scheme administrator should be responsible for managing the relationship with reverse vending machine operators and should consider awarding contracts to multiple vendors within the scheme.
While comprehensive, the areas discussed above must be viewed as the pillars of a highly successful deposit return scheme. Careful planning, collaborative thinking and intricate management are all instrumental to the success of such a programme which, if applied correctly, could position the UK as a world leader in waste management.
Realistic timeframes and considered implementation will prove critical. It is therefore essential that the roll-out gives manufacturers and suppliers sufficient lead time to adapt to new requirements and change packaging labelling, and consumers enough time to learn about how behaviours need to change.
The impact of implementing a world-leading DRS could be game changing for UK waste management. Careful planning, collaborative thinking and intricate management is therefore key.
