UK Deposit Return Scheme (DRS): Everything You Need to Know

Table of Contents

• What Is the Deposit Return Scheme
• How DRS Works
• Which Containers Are Included
• Which Containers Are Excluded
• Who Needs to Register
• Producer Obligations
• Retailer Obligations
• Key Dates and Timeline
• DRS Across UK Nations
• Business Impact Considerations

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Key Takeaways

• The UK DRS launches in October 2027 across the UK. England, Scotland, and Northern Ireland will be administered by Exchange for Change as the Deposit Management Organisation. Wales is developing a separate scheme, also targeting October 2027.
• A deposit expected to be around 20p will be charged on every in-scope drinks container at point of sale and refunded when the empty container is returned.
• PET plastic bottles and aluminium/steel cans are confirmed as in-scope. Glass is not included in England, Scotland, or Northern Ireland. Wales plans to include glass but initially without a deposit.
• All drinks producers, importers, and retailers selling in-scope containers will have obligations under the scheme.
• The Deposit Management Organisation (DMO) will administer the scheme, collecting fees from producers and managing the return infrastructure.

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What Is the Deposit Return Scheme

The Deposit Return Scheme (DRS) is a system designed to increase the collection and recycling of drinks containers by adding a refundable deposit to the price of every in-scope beverage. When a consumer buys a drink in a qualifying container, they pay a small deposit on top of the product price. When they return the empty container to a designated return point, they receive their deposit back.

DRS is not a new concept. More than 50 countries and jurisdictions worldwide already operate deposit return schemes, including Germany, Norway, Sweden, Denmark, the Netherlands, and several Australian and Canadian states. These schemes consistently achieve collection rates of 90% or higher, compared to the UK’s current collection rate for drinks containers of around 70%.

The UK government confirmed in 2024 that a DRS would be introduced, with the scheme expected to launch in October 2027. England, Scotland, and Northern Ireland will launch together under Exchange for Change as the DMO. Wales withdrew from the joint process in November 2024 and is developing its own separate DRS, also targeting October 2027, which will additionally include glass.

The primary objectives of the UK DRS are:

• Increase collection rates for drinks containers to at least 90%
• Reduce litter — drinks containers account for a significant proportion of litter in public spaces
• Improve recycling quality — containers returned through DRS are cleaner and less contaminated than those collected through kerbside recycling
• Support the circular economy — high-quality collected materials can be recycled back into new containers (closed-loop recycling)

How DRS Works

The scheme operates through a straightforward cycle involving producers, retailers, consumers, and the Deposit Management Organisation (DMO).

The Deposit Cycle

1. Producer pays deposit to DMO — When a drinks producer or importer places in-scope containers on the UK market, they pay the deposit amount (expected to be around 20p per container) to the DMO.

2. Retailer charges deposit to consumer — When a consumer purchases a drink in an in-scope container, the retailer adds the deposit to the sale price. The deposit is shown separately on receipts. No VAT is charged on the deposit at the point of sale, though unredeemed deposits may attract VAT at the producer level.

3. Consumer returns empty container — The consumer takes the empty container to a return point (typically a reverse vending machine at a supermarket or shop, or a manual return point at smaller retailers). The container is scanned to verify it is an in-scope DRS container.

4. Consumer receives deposit refund — The return point refunds the deposit to the consumer, either as cash, a voucher, a digital payment, or a credit against their shopping.

5. DMO collects and recycles containers — The DMO arranges for returned containers to be collected from return points, sorted, and sent for recycling. Revenue from selling the recycled material helps fund the scheme.

The Expected Deposit Level

The deposit is expected to be around 20p per container, though the final amount has not yet been officially confirmed. It will be a flat rate regardless of container size or material. This flat-rate approach keeps the system simple for consumers and retailers. Whether you buy a 330ml can of cola or a 2-litre bottle of water, the deposit will be the same.

The deposit is designed to be high enough to incentivise returns (research suggests a threshold of around 15-20p is needed to change consumer behaviour) while being low enough not to deter purchases or cause significant cash flow issues for businesses.

The Deposit Management Organisation

The DMO is the central body that administers the entire scheme. It is a not-for-profit organisation funded by producer fees. The DMO’s responsibilities include:

• Registering producers and collecting deposits and producer fees
• Setting up and managing the return point network
• Providing reverse vending machines and collection infrastructure
• Arranging logistics for collecting returned containers from return points
• Sorting returned containers and selling materials to recyclers
• Managing the financial flows between all parties
• Reporting on scheme performance to government regulators

The DMO will be appointed by government and will operate under a regulatory framework set by DEFRA and the devolved administrations.

Which Containers Are Included

The scope of the UK DRS has been the subject of extensive consultation and debate. The confirmed in-scope containers are:

PET Plastic Bottles

All drinks containers made from PET (polyethylene terephthalate) plastic are in scope. This covers the vast majority of plastic drinks bottles, including:

• Water bottles
• Soft drink bottles
• Juice bottles
• Sports and energy drink bottles
• Flavoured water bottles

PET bottles range from small 250ml sizes to large 2-litre or 3-litre formats. All sizes within the scheme’s volume thresholds are included. Containers between 150ml and 3 litres are in scope.

Aluminium and Steel Cans

All drinks cans made from aluminium or steel are in scope, including:

• Soft drink cans
• Beer and cider cans
• Energy drink cans
• Sparkling water cans
• Ready-to-drink cocktail and spirit cans

Standard 330ml cans, 440ml pint cans, 500ml cans, and multipacks are all included. As with PET bottles, the size thresholds of 150ml to 3 litres apply.

Glass — Not Included (Except Wales, Without Deposit)

Glass bottles are not included in the DRS for England, Scotland, or Northern Ireland. Only Wales plans to include glass in its DRS, but initially without a deposit attached to glass containers.

The exclusion of glass from most of the UK DRS reflects several practical considerations:

• Glass is heavy, increasing collection and transport costs
• Reverse vending machines for glass are larger, more expensive, and noisier
• Glass is already collected at relatively high rates through bottle banks and kerbside recycling
• Including glass significantly increases the cost and complexity of the scheme for retailers

Glass containers remain covered by separate packaging EPR obligations. Businesses selling glass-bottled drinks in Wales should monitor developments around the Welsh approach to glass inclusion.

Which Containers Are Excluded

Several container types are explicitly excluded from the DRS:

• Cartons and Tetra Pak — composite containers such as juice cartons and UHT milk cartons are not in scope. These are covered by packaging EPR instead.
• Pouches and sachets — flexible packaging for drinks (such as Capri-Sun style pouches) are excluded.
• HDPE bottles — drinks containers made from HDPE (high-density polyethylene) are excluded from the DRS. Since most milk bottles are HDPE, this effectively excludes the majority of milk containers. However, PET dairy drinks containers (such as flavoured milk or milkshakes in PET bottles, 150ml-3L) are in scope and do carry a deposit.
• Note on milk: There is no blanket exclusion for milk regardless of material. The exclusion operates through the HDPE material exclusion, which covers most conventional milk bottles. PET containers holding dairy drinks are in scope like any other PET drinks container.
• Containers under 150ml — small containers below the minimum volume threshold.
• Containers over 3 litres — large format containers such as water cooler bottles.
• Cups and glasses — disposable cups (paper, plastic, or polystyrene) are not in scope, though they may be subject to separate regulations.
• Containers for non-drink products — sauce bottles, cooking oil bottles, and other food product containers are excluded even if made from PET or metal.

The distinction between “drinks” and “non-drinks” is important. Only containers that hold a beverage intended to be consumed as a drink are in scope. Liquid foods, sauces, oils, and medicinal liquids are excluded.

Who Needs to Register

Three groups of businesses have obligations under the DRS: producers, importers, and retailers.

Producers

Any business that manufactures or bottles drinks in in-scope containers for sale in the UK market is a producer under the DRS. This includes:

• Drinks manufacturers (soft drinks, beer, cider, water, juices, energy drinks)
• Contract bottlers and co-packers
• Own-label brands (the brand owner is the producer, not the contract manufacturer)

Importers

Businesses that import drinks in in-scope containers from outside the UK for sale on the UK market take on the producer obligations. This includes:

• Drinks wholesalers and distributors importing from overseas
• Retailers importing directly from foreign suppliers
• Online retailers selling imported drinks to UK consumers

The importer is the first person or business to place the product on the UK market and therefore assumes responsibility for paying the deposit and registering with the DMO.

Retailers

Any business that sells in-scope drinks containers to consumers has retailer obligations under the DRS. This includes:

• Supermarkets and grocery stores
• Convenience stores and off-licences
• Petrol station forecourt shops
• Pubs, bars, and restaurants (for off-sales / takeaway drinks)
• Vending machine operators
• Online grocery retailers

The retail obligation primarily concerns operating or hosting return points and handling deposit charges and refunds at the point of sale.

Producer Obligations

Producers and importers bear the primary financial responsibility under the DRS.

Register with the DMO

All producers must register with the Deposit Management Organisation before placing in-scope containers on the UK market. Registration will require details of your business, the products you sell, container types and materials, and estimated annual volumes.

Pay the Deposit

For every in-scope container placed on the UK market, the producer pays the deposit (expected to be around 20p) to the DMO. This payment is made in advance or on a regular billing cycle (likely monthly). The deposit is not a tax or a fee — it is a refundable amount that flows through the system and is ultimately returned to the consumer who returns the container.

Pay Producer Fees

In addition to the deposit, producers pay a producer fee to the DMO. This fee covers the operational costs of running the scheme: reverse vending machines, logistics, sorting, administration, and scheme management. Producer fees are separate from the deposit and are not refunded. They represent the true cost of the DRS infrastructure to producers.

The exact level of producer fees has not yet been confirmed, but estimates based on comparable European schemes suggest fees in the range of 1-4p per container, depending on material type and scheme maturity.

Label Containers

All in-scope containers must carry DRS-specific labelling to enable identification by reverse vending machines and consumers. The required labelling elements are expected to include:

• A DRS logo or symbol indicating the container carries a deposit
• A barcode compatible with the DMO’s scanning infrastructure (this may be an enhanced version of the existing product barcode or a separate DRS-specific code)
• The deposit amount displayed clearly on the container

Labelling specifications will be published by the DMO. Producers will need to update their packaging artwork and printing plates to incorporate the required markings. For producers with large product ranges, the artwork update process can take 6-12 months, so early preparation is essential.

Retailer Obligations

Retailers are the consumer-facing element of the DRS and have specific obligations around return points and deposit handling.

Provide Return Points

Retailers above a certain size threshold will be required to host a return point on their premises. The threshold has not been finalised, but it is expected that:

• Large retailers (supermarkets and large stores above a specified floor area) will be required to install a reverse vending machine (RVM) — an automated machine that accepts empty containers, verifies them via barcode scanning, and issues a deposit refund.
• Medium retailers may be required to offer a manual return point where staff accept returned containers over the counter.
• Small retailers (below the size threshold) may be exempt from hosting a return point but will still need to charge and display the deposit at the point of sale.

The exact thresholds and obligations for different retailer sizes will be confirmed by the DMO.

Charge and Display the Deposit

All retailers selling in-scope drinks containers must charge the deposit at the point of sale and display it separately from the product price. This applies to both physical and online sales. Price labels, shelf-edge labels, and online product listings must show the deposit as a distinct charge.

Refund Deposits

Retailers operating return points must refund the deposit to consumers who return containers. The refund mechanism may vary — options include cash refunds, vouchers redeemable in-store, or digital payments. Retailers will be reimbursed by the DMO for the deposits they refund, plus a handling fee to compensate for the cost of operating the return point.

Store Returned Containers

Retailers must provide adequate space to store returned containers before they are collected by the DMO’s logistics partner. For large supermarkets with high return volumes, this may require dedicating significant storage space to compacted containers. The space and infrastructure requirements are one of the most significant operational impacts of DRS on retailers.

Key Dates and Timeline

The DRS implementation timeline is structured to give businesses adequate preparation time, though the schedule is ambitious.

Date	Milestone
2026	DMO appointed and begins operations. Final scheme details confirmed.
Early 2027	Producer registration opens. Labelling specifications published.
Mid 2027	Retailer return point installation begins. System testing and trials.
October 2027	DRS launches. All in-scope containers must carry deposits and DRS labelling.
October 2028	First full year of operation. Performance review against collection targets.

Producers should be planning now for the labelling changes, as packaging artwork revisions, printing plate production, and existing stock depletion can take 12-18 months. Any containers placed on the market after the launch date without DRS labelling will be non-compliant.

DRS Across UK Nations

The DRS landscape across the UK is complicated by devolution. Each nation has the power to legislate on waste and recycling matters independently.

England, Scotland, and Northern Ireland

England, Scotland, and Northern Ireland are implementing a joint DRS with a single DMO — Exchange for Change — and harmonised rules. This scheme launches in October 2027 with a deposit expected to be around 20p, covering PET bottles, aluminium cans, and steel cans. Glass is not included. The joint approach ensures a consistent scheme across these three nations, avoiding the need for separate labelling or registration.

Wales

Wales withdrew from the joint UK-wide DRS process in November 2024, primarily over disagreements about glass inclusion. Wales is developing its own separate DRS, also targeting an October 2027 launch. The Welsh scheme will cover the same core materials (PET plastic, aluminium, and steel cans) and will additionally include glass — though initially with a zero-pence deposit on glass containers until October 2031, when a full deposit is expected to apply.

Scotland

Scotland was originally ahead of the rest of the UK in developing its DRS, with an original launch date of 16 August 2023. However, after Circularity Scotland — the originally appointed scheme administrator — went into administration in June 2023, the scheme was fundamentally restructured. Scotland has since aligned with the October 2027 launch date and will operate under Exchange for Change alongside England and Northern Ireland.

Containers carrying the DRS label can be returned in any participating nation, regardless of where they were purchased. Interoperability between the Exchange for Change scheme and the Welsh scheme is expected but should be confirmed as both schemes develop.

Practical Implications for Businesses

For businesses operating across the whole UK, the key question is whether a single DRS label and registration will cover all nations. For England, Scotland, and Northern Ireland under Exchange for Change, a single registration and label set should suffice. Businesses selling into Wales may need to monitor the Welsh scheme’s specific requirements, particularly around glass inclusion. The two schemes are expected to be interoperable for PET and metal containers, but businesses should track developments closely.

Business Impact Considerations

The DRS will affect businesses across the drinks supply chain in several significant ways.

Financial Impact

The most immediate impact is financial. Producers will bear the cost of deposits (on a cash flow basis, as deposits are refunded to consumers), producer fees, and labelling changes. Retailers will incur costs for installing and maintaining return points, allocating floor space, and managing returned containers.

For producers, the cash flow impact of pre-paying deposits to the DMO can be substantial. A producer placing 10 million containers on the market annually will need to pre-pay a significant sum in deposits to the DMO (around £2 million if the deposit is set at 20p), plus producer fees. While deposits are ultimately refunded (via the consumer return loop), the timing mismatch creates a working capital requirement.

Pricing and Consumer Communication

Adding a deposit (expected to be around 20p) to every drinks container will change shelf prices. For example, a can of soft drink currently priced at £1.00 could show as £1.00 + 20p deposit = £1.20 at the checkout. Producers and retailers will need to communicate this change clearly to consumers to avoid confusion or negative price perception.

The deposit is not a price increase — it is fully refundable — but consumer understanding of this distinction will be critical in the early months of the scheme. Clear point-of-sale signage, packaging messaging, and marketing campaigns will be needed.

Logistics and Space

For retailers, the space required for reverse vending machines and container storage is a significant operational concern. A standard RVM occupies 2-3 square metres of floor space, plus additional space for the collection containers behind it. In stores where floor space is already at a premium, this represents a real cost.

Collection logistics — the regular removal of returned containers from retail premises — must be reliable and frequent to prevent storage areas from overflowing. The DMO will contract logistics providers for this purpose, but retailers will need to accommodate collection schedules and provide access for collection vehicles.

Opportunity

Despite the costs and complexity, DRS also presents opportunities. Retailers can benefit from increased footfall as consumers visit stores to return containers. The handling fee paid by the DMO provides a revenue stream. And businesses that embrace DRS early and communicate their participation positively can strengthen their environmental credentials with increasingly sustainability-conscious consumers.

For full details on the Deposit Return Scheme and how it affects your business, visit our DRS guide. Our platform provides alerts and checklists tailored to your business type, so you can prepare methodically for the October 2027 launch.

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