DRS: how does it work?

SLR GOES BACK TO BASICS WITH AN OVERVIEW OF WHAT A DEPOSIT RETURN SCHEME IS, HOW IT WORKS AND HOW IT AFFECTS RETAILERS AND CONSUMERS.

A Deposit Return Scheme (DRS) involves consumers paying a small amount of money (the deposit) for the container when they buy a drink to take away. This is refunded in full when they return the empty container.

The concept of a deposit return system for drinks containers is nothing new, but modern national deposit return schemes require everyone producing and selling drinks in single-use containers to take part.

Schemes like this are already operating successfully in many countries across Europe and in several US and Australian states.

WHAT’S INCLUDED

Scotland’s DRS will include all single-use drinks containers made of:

PET plastic metal glass

All containers between 50ml and three litres will be included and the scheme will cover both alcoholic and soft drinks. The scheme will not include HDPE plastic containers – the kind used for milk and some other drinks – or lined cardboard containers like Tetrapak.

HOW DOES THE FINANCE WORK?

Every item included in the container return scheme will carry a deposit of 20p which will be refunded to the consumer when they take it back to any return point.

The 20p deposit will remain in circulation all the time, passing from the person receiving the container to the person accepting it:

STEP 1 The producer or importer pays a 20p deposit for each drinks container they put into the Scottish market. This is paid to the scheme administrator and they inform Circularity Scotland (CSL) how many containers they sell so that producer fees can be allocated accordingly.

STEP 2 If the product is passing through a wholesaler, they will pay the producer or importer a 20p deposit which they will recoup when they sell on to the next business in the supply chain.

STEP 3 The retailer will then pay their drinks supplier 20p per container which they will get back from the customer at the point of purchase.

STEP 4 The retailer receives their 20p back from the customer when they pay the container or bottle deposit at the point they purchase their drink.

STEP 5 The consumer gets their 20p back when they take the empty container back to a return point.

STEP 6 The scheme administrator uses the 20p they originally received from the producer or importer to refund the return point operator.

Operating As A Return Point

All retailers and hospitality businesses that sell drinks to take away are legally required to operate a return point, unless they have secured an exemption. This includes online retailers of drinks.

This will ensure that all consumers, wherever they live, have access to a local return point, making it easier to return their empty scheme containers, helping us to achieve a high recycling rate.

Retailers offering online sales of deposit-bearing containers will have to offer a free takeback service allowing the customer to return containers and get their deposit back from that retailer.

Businesses can choose to have a reverse vending machine or take back containers manually.

Rvms

Reverse vending machines (RVM) are sophisticated pieces of equipment that can identify drinks containers inserted and refund consumers’ deposits once the container has been scanned and validated. RVMs can generate vouchers that can be used at retailers to pay for shopping or get a cash refund at the till.

RVMs have been successfully used to support many other deposit return schemes around the world. Return points using RVMs store the returned containers in bags, boxes and bins ready for collection by Circularity Scotland or its nominated logistics partner, Biffa.

Manual Handling

Manual handling is when retailers accept returned containers over the counter and repay consumers from the till, using accounting and reporting systems to obtain reimbursement from the scheme administrator. They will store returned containers on-site, in bags and boxes provided, ready for collection by the scheme administrator’s nominated logistics partner. Circularity Scotland collects the material and validates each container at a counting centre, and redeems deposits as appropriate.

Handling Fee

Return point operators will receive a handling fee designed to cover the costs of the time, equipment and additional storage space needed to operate the scheme.

The level of this fee will be determined annually by Circularity Scotland, based on data and analysis provided by independent consultants to ensure it remains reasonable and current.

The current Handling Fees per container are:

Manual 2.69p

Automatic Level 1 3.70p

Automatic Level 2 1.60p

*Return Point Operators using an RVM will receive the Automatic Level 1 fee for the first 8,000 qualifying containers processed each week and the Automatic Level 2 fee for every container above the 8,000 weekly threshold.

Collections Process

Collections will be performed by CSL’s logistics partner Biffa and will be free of charge, which will result in a saving to retailers who currently pay for the removal of disposable drinks containers on their premises. Collection activities will operate seven days a week – depending on the volume of returns, the current model is that RVMs could be visited daily while Manual Return Points could be serviced weekly or fortnightly. However, these collection frequencies will be reviewed as part of the registration process once the scheme is live and adjusted where necessary to ensure an efficient operation as the system beds in.

Each bag and tote box collected will be sealed with a security tag with a unique identifier for the return point operator so they can track its progress through the system. Glass bins will be weighed by the collections driver and reconciled to the uplift location.

CSL recognises that additional, one-off collections may be necessary at specific return points. This might be triggered when a return point with limited storage capacity experiences a surge following a local event such as a music festival or sports match.

Return point operators will be able to request additional collections on CSL’s Customer Web Portal or by calling its customer call centre. There will be agreed timeframes for such collections.

Repayments

Repayments of deposits paid out by return point operators will be around seven days after the collection of their containers. For manual return points, the process is triggered when the containers collected have been processed at the counting centre.

For automatic return points (RVMs), it is when the sacks or totes have been scanned on arrival at the counting centre. CSL is committed to offering the same level of service to return points at all locations across Scotland – no matter how remote.

Exemptions

There is some flexibility in how retailers can meet their obligation to accept empty containers. Retailers can apply for an exemption from having to operate their own return point.

A typical example is where a small shop could agree an exemption with a larger store nearby.

Another type of example is for shops in a specific location who can agree an exemption with a newly created voluntary return point. Examples of these might be train stations, shopping centres or food courts where a centralised reverse vending machine could perform the individual retailers’ duties to accept returns.

There are also grounds for exemption on safety or environmental health grounds. If you can demonstrate that operating a return point on your premises would put you in breach of other legislation, such as environmental health and food or fire safety, you can apply for an exemption.

Applications for exemptions should be addressed to Zero Waste Scotland.