Alupro: Flat deposit fee disappointing but DRS opportunities remain

At the end of April, scheme administrator Exchange for Change announced that a flat deposit fee will be applied to all in-scope materials when the UK’s Deposit Return Scheme for drinks containers (DRS) launches in 2027. The decision means that 20p will be added to the cost of beverage containers at the point of purchase – with consumers only receiving it back if they return them after use.

The announcement follows an industry-wide consultation phase and in-depth analysis of existing DRS models around the world. As part of the consultation, a 15p deposit was deemed to provide insufficient incentive to achieve desired return rates, while there was widespread concern that 30p could result in disproportionate consumer cost exposure. The idea of a variable deposit fee (whereby a larger deposit would be applied to higher-volume containers, regardless of material), was deemed too complicated for consumers.

Having championed the idea of a variable rate deposit as the best way to prevent the unintended consequence of market distortion after introducing a DRS, the scheme administrator’s decision to support a flat fee is disappointing news. While we understand and respect the arguments for and against each model, our members’ international experience shows that a DRS with a variable deposit rate would deliver optimum results by incentivising returns without encouraging consumers to change their consumption behaviour.

A DRS was recently introduced in the Republic of Ireland, one of the few launched recently with a variable rate of deposit and perhaps with the market most similar to our own. The scheme was introduced with no significant change in consumer buying behaviour; this is our desired outcome for the UK.

What’s more, we’re concerned that market shifts have not been properly accounted for, with consumers likely to switch from recyclable containers to other, larger packaging formats to avoid high costs at the point of purchase. After all, amid the cost-of-living crisis, it’s difficult for many to justify the initial deposit outlay of a multipack over a far cheaper single bottle – regardless of the sustainability implications. In the long term, this could lead to fewer numbers of containers in the DRS overall, which will itself impact of the revenue streams of the scheme.

We hope that Exchange for Change will continue to monitor the market during and following the rollout of the DRS and evolve its thinking in line with the latest insight. Of course, I hope that the implementation goes smoothly and the UK public welcome it as part of their routines! We remain committed to offering our input, support and counsel to maximise the opportunity for a highly effective DRS.

Now that fundamental decisions have been made regarding the scheme’s overall design, however, it’s essential that the administrator continues to work in close collaboration with the wider packaging supply chain to tackle pressing intricacies in the run-up to its roll-out.

Firstly, we need to think carefully about where the resulting DRS material is going and use this one in a generation opportunity to supercharge the circular economy. After all, rather than thinking about this primarily as a solution to reduce litter, we need to see the implementation of a national DRS as a defining moment in efforts to maximise post-consumer packaging capture volumes and return material to the businesses that have the opportunity to turn it back into cans and bottles. This is essential in further reducing carbon emissions and energy consumption in the production of consumer packaging.

Furthermore, we need to consider the day-to-day impact of the scheme for businesses and consumers, as well as the timing of (and investment into) communications. Producers must be the first priority, as labelling takes time to revise. From here, a monumental effort needs to be directed at the general public to make the scheme ‘stick’.

Awareness is key, but the flavour can’t be dry and boring. We need to gain the hearts and minds of the public who we need to buy into the scheme. We mustn’t assume that people will understand, support and instinctively use the system – we need to be ready for challenges, pushback and confusion.

Industry is key in this instance. After all, the packaging supply chain has been funding and driving hugely successful consumer communication programmes for decades. Alupro’s Every Can Counts initiative and MetalMatters campaign are excellent examples of how effective best practice communication can be.

But communication can’t simply focus on the stick – using the deposit fee as a leverage point to force compliance. We need to use the carrot too – explaining the benefits and positive implications to change perceptions and drive new behaviours. DRS is not just about increasing recycling rates, it’s about tangible climate outcomes, security of supply, energy savings and carbon reductions. Most importantly, it’s about enabling progress towards a more circular economy.

Tom Giddings, executive director of Alupro.

For more information about Alupro, or its work as the voice of the aluminium packaging supply chain, visit www.alupro.org.uk.