The Waste Action Plan for a Circular Economy – Ireland’s roadmap for waste planning and management published in 2020 – commits to introducing a Deposit and Return Scheme (DRS). The aim of a DRS is to incentivise consumers to return empty beverage containers for recycling or reuse. Ireland aims to achieve a separate collection rate of 90% for plastic bottles to maximise the recyclability of the bottles, and the DRS will be vital in reaching this goal.
Deposit return schemes are a proven effective method of returning cleaner, higher quality recyclable material than traditional “green bins.” Facilities can process more material due to receiving less-contaminated bottles. A well-planned DRS can lead to a high rate of items returned for recycling. In Norway in 2021, 91.5% of all cans sold were returned to Reverse Vending Machines (RVMs), and 92.8% of plastic bottles were returned.
Intended to reduce single use plastics, help Ireland meet EU targets, and promote a wider circular economy, the introduction of a DRS is an exciting scheme that most will surely welcome, as evidenced by Ireland’s already high glass recycling targets. About 84% of glass in Ireland is recycled – notably without a DRS even in place for glass. It is clear from a successful glass recycling system, that when given the opportunity to participate in recycling, people in Ireland are eager to do so.
Challenges for Producers and Retailers
It is important to note that while the establishment of the DRS is a significant achievement, there are risks and challenges that a poorly planned DRS can pose to Irish businesses if the right scheme is not in place from the start. In fact, this month in Scotland, more than 500 business leaders signed an open letter calling on the Scottish Government to delay its flagship DRS. In a letter to the Circular Economy Minister Lorna Slater, business leaders wrote that some drinks firms could be forced to close due to the administrative costs associated with the scheme. Furthermore, they called for alignment with the scheme launching in England so that the benefits of the “single market” in drinks can continue. Concerns about high producer fees are also prevalent among producers operating in Scotland.
In particular, craft brewers in the UK have announced that selling into Scotland with the DRS in place, the way it is currently, would pose unmanageable expenses and result in craft brewers outside of Scotland halting sale of their products in Scotland. As it stands, brewers will need to pay more than two months of the charged deposits up front as well as producer fees, and they will also face the loss of VAT refunds for non-return containers and an additional surcharge of 1.2p per container if they use a UK-wide label rather than a Scottish-specific barcode.
As it stands, the DRS in Ireland will not be streamlined with a system in Northern Ireland. In fact, similarly to Scotland, international barcodes in Ireland are set to incur a surcharge when used here. This could have a negative impact on businesses’ ability to smoothly operate cross-border trade with Northern Ireland. Producer fees are set to be published by the end of November 2022.
What implications and obligations this will have for hospitality businesses is still not entirely clear, given pubs and bars can sell beverages for off-trade (i.e. takeaway) consumption. Re-turn, the scheme operator, have acknowledged that the sector will not have the same obligations to accept returns as other retailers, but that a deposit ‘should be’ charged to the consumer if a beverage is for takeaway consumption. How this will be implemented at an industry level may not be as straight forward.
Another area within the proposed framework that requires further clarity is whether retailers would be permitted to reimburse the deposit on vouchers for alcohol beverages, given recently-commenced regulations within the Public Health Alcohol Act 2018 around the use of voucher and loyalty schemes prohibit the rewarding of any ‘benefit’ for alcohol purchases. Re-turn has confirmed recently that this is an area that they are still seeking guidance on.
DRS Brief Overview
- The Department of Environment, Climate, and Communications has named DRSI CLG as the scheme administrator, and the new DRS will be operated by DRSI CLG, trading as “Re-turn”.
- The scheme includes PET plastic bottles, aluminium and steel cans, from 150ml to 3 litres, and will not include milk cartons.
- The deposit amount will be 15 cents for cans or bottles of 500mL or lower. Above 500mL will be 25 cents.
- The DRS will go live in February 2024.
- Consumers will pay a deposit on top of retail price when buying a can or a bottle, and will be able to return containers to retail, or to an RVM.
- Producers will pay a deposit when producing the item, and the retailer will pay the deposit to the producer in addition to the cost.
- The deposit is refunded to the consumer by the retailer when the bottle is returned, and the DRS reimburses the deposit to the retailer.
- The material that is collected in the DRS is legally owned by Re-turn.
- Retailers will be required to take back all empty DRS containers, not just those that they have sold. Online retailers have the same obligations for free take back services.
- Producers must use a barcode in order to ensure that the product can be clearly identified in both RVMs and the DRS counting and sorting facility, and containers in multipacks will require a barcode to ensure that all products can be returned for refund.
- Producers must include the Re-turn deposit symbol on all ‘in-scope’ products.
There remain aspects of the Irish DRS that are unclear, or that have not yet been finalised. Smooth implementation is not always simple. The more that retailers and producers can engage in the beginning, the likelier that the resulting scheme will be successful from the outset.