Background 

The Government has published a statutory instrument, the regulation which sets out the detail for implementing DRS in England and Northern Ireland. You can read it in full here. The 4 UK nations had agreed on 3 schemes, England and Northern Ireland, Scotland and Wales. Scotland will release its regulation shortly by amending the legislation it had introduced for its failed scheme. Wales, however, has withdrawn from a UK approach and not confirmed how it will proceed. The regulation confirms the Government commitment to implement DRS in England, Northern Ireland and Scotland in October 2027.  

This briefing is summary of the DRS Regulation in England and Northern Ireland. 

1. What is the Scheme? 

• It is designed to increase recycling of drinks cans and reduce littering. 

• Consumers will be incentivised to return by paying a deposit on purchase which is then redeemed at designated points.

• The scheme will be delivered by a private Deposit Management Organisation (DMO).
• The Environment Agency in England and DAERA in Northern Ireland will ensure delivery of an effective scheme by the DMO and, where, necessary enforce against producers and retailers not complying with the regulations. 

2. What will the DMO do? 

• The DMO will be responsible for running the scheme which delivers the Governments targets for recycling of relevant drinks containers. Targets are 70% by 1/1/28, 80% by 1/1/29 and 90% by 1/1/30 (including at least 85% of PET containers).

• It will set the level of deposits. 

• It will agree the retail handling fee payment.

• It will decide on exemptions from retailers to exempt stores from the scheme. 

• As well as ensuring a network of return points it can install additional points. 
• It will run the logistics to ensure the collection and recycling targets are met.

3. What Producers are Covered? 

• All producers of drinks, with an annual output of 5,000 containers (6,250 in year 1) are included.

• Producers include branded and own brands, so most retailers are covered.

• It covers importers supplying to the UK market. 
• It includes all producers based in the UK, regardless of whether they are located in England or Northern Ireland. 

4. What do producers need to do? 

• Producers need to register with the Deposit Management Organisation (DMO) who will oversee the scheme.

• They will supply the DMO with details of the number and type of containers they place on the market. The DMO has powers to obtain this if not supplied. 

• All containers placed on the market after 1/10/27 will need to carry the necessary logo and return code for the deposit to be redeemed.
• Producers will pay a producer fee when they place drinks on the market. That will pay the retail handling fee, determined by the DMO to cover retailers’ costs who accept containers from consumers and redeem the deposit. 

5. How are retailers covered? 

• All businesses selling relevant drinks containers have to follow relevant regulations on sale, which includes information on why the deposit is levied and its amount.  

• All business selling relevant drinks have to charge the deposit. 

• Only grocery retailers are required to provide mandatory return points (MRP). 

• Other sellers can choose to apply to be included as a return point but it is not mandatory. The DMO will keep a register of all exempt sellers. 

• Grocery retailers must register with the DMO ahead of 1/10/27 giving details of all relevant stores. 
• All retailers can register before the 1/10/27 but that is not covered in the regulation meaning the DMO will need to consider when it will need information to ensure it has a sufficient network of return points to meet consumer demand before the scheme begins. 

6. Can Grocery retailers be exempt from MRP? 

• Very small retailers, e.g., newsagents, small convenience stores with a retail space of 100m2 or less in an urban area are automatically exempt.

• All larger stores can apply for an exemption for 2 reasons. Firstly, there are a sufficient number of return points close to the store to meet consumer demand. Secondly, the store layout and operation would make it difficult to introduce a return point. 

• These exemptions need to be applied for from the DMO, who will consider each application. 

• Applications for exemptions can be made any time before 1/10/27 and if a decision is still pending when the scheme begins, until the decision is confirmed that store is considered out of the scheme.

• All exemptions are granted for a 3 year period and need to be reapplied and can be revoked if circumstances which justify their exemption change. 
• Retailers can ask for a review of the decision if turned down. 

7. Deposits 

• The DMO sets the deposit level. 

• In terms of other schemes in the UK it is required to ‘use its best endeavours’ to reach agreement on the level across the UK.

• The DMO has to consult widely including the Scottish Government. 

• Any change in deposit levels can only be implemented a minimum of 3 months after agreement. 
• Any unredeemed deposits are retained by the DMO and can be used to pay fees to enforcers and then reduce the cost of the running of the scheme. 

8. Retail Handling Fee? 

• The fee paid by the scheme is designed to recompense retailers for their costs in operating return points. 

• The costs are recouped from producers who pay a fee for each container they place on the market.

• The fee is determined by the DMO and takes into account, not exclusively:
  • (a) costs of purchasing or leasing any machinery, equipment or materials required for the collection or storage (or both) of returnable items;
  • (b) costs of staff time dedicated to the collection or storage (or both) of returnable items
  • (c) rental value of the floor space or any other part of any premises used solely for the collection or storage (or both) of returnable items. 

• Once agreed by the DMO it will consult retailers and regulators. 

• It can set a fee for different containers and different retail formats. 

• It can be reviewed at any time but must be reviewed at least every 3 years.