It has been a dramatic year for delivering deposit return scheme (DRS) in Scotland and across the UK. There have been many challenges, some failures and sadly some job losses because of Circularity Scotland going into administration. We all have a responsibility to learn from these events so we can move forward to deliver DRS across the UK. I thought it was worth sharing some lessons I’ve learnt from the DRS process so far and I hope others will too. Despite the often-heated debate in the media that has run in parallel to DRS delivery, I have seen first-hand that the majority of people in industry and government have taken a pragmatic approach to DRS. We must seek to do this again as we now deliver a (hopefully) more interoperable and coherent DRS system across the whole UK.
1. We need political leadership to instil confidence.
DRS has become a political football kicked around between devolved nations. We need politicians from all parties and nations to step up, set aside their difference and agree a blueprint for interoperability across the UK, and quickly. It is no secret that industry has always wanted a pan-UK DRS that has a consistent approach to materials, processes and payments. But it has been a long and messy path to get there. Our political leaders need to agree an approach to DRS that work across the UK. If every element of DRS requires sign off by political leaders of each nation, I’m not sure we will have DRS any time soon. Surely if there is one issue that politicians can unite behind it’s delivering a system that supports our environmental objectives, delivers new investment, jobs and infrastructure. Political leadership and clarity will also be essential for giving producers, supply chain partners and retailers the confidence to invest. After Scotland’s DRS launch was pulled due to last minute changes and uncertain processes, how likely is it that anyone will invest in a UK DRS scheme without more clarity and pragmatism from our political masters?
2. Governments and regulations need to be flexible.
The Environment Act enables DRS, but secondary regulations will deliver it. Secondary regulations have been controversial in recent times with Ministers criticised for using them to implement changes without proper parliamentary scrutiny and consultation. Yet, they are a perfect mechanism for DRS implementation because they can be quickly (in Whitehall terms) changed to reflect new circumstances. Current Ministers, and Ministers that form the next government, must be ready to tweak regulations where it is needed to support DRS implementation. Ministers also need to be realistic about what can be delivered in the time we have - including shutting off dead end ‘nice to have’ ideas that ultimately distract from making the core elements of DRS work.
3. We need an industry-led DMO with operational knowledge and accountability.
The delivery of DRS is dependent on an industry-led Deposit Management Organisation (DMO) to co-ordinate everyone and the flow of money and resources. An producer / retailer not-for-profit DMO is essential to avoid the administrative burdens and constraints that a public sector body would bring. Moreover, this DMO must benefit from knowledge from producers, retailers and supply chain sectors to address the many operational challenges and tight timeframes faced by multiple stakeholders. We also know from Scotland that the DMO needs to be committed to working openly and transparently with all partners and use its convening power to bring all parties together to solve problems. In the past it has been too easy for operational challenges fundamental to DRS delivery to be shuffled between the in trays of government and regulators.
4. Timing is everything.
Setting up a new DMO that is part membership organisation, part environmental start-up, part infrastructure delivery body and part communications agency is, erm, hard! If you don’t give the DMO the time and resources to set up, DRS is doomed to fail. This the most important lesson we’ve learned from Scotland and probably the hardest to accept. It is important to note that we currently don’t have regulations ready for DRS in England and Northern or Wales and are unlikely to see them in 2023. The October 2025 go live date is looking really hard unless we accelerate the establishment of the DMO and confirm the regulations. Without action in these areas, I can see a scenario where we have to push back the go live date, again. This isn’t a popular view, but it is an honest one.
5. Businesses start investing and delivering when policies are clarified.
There is no point in a business investing in a reverse vending machine or a new IT system only to be told the specification for materials it will accept have changed. So, if it is going to take industry 12 months to procure and implement new equipment, that means 12 months from when policies are confirmed. If we want DRS to work for consumers we need to have clarity on how and when operational aspects of the scheme will be clarified and work back from there.
6. Businesses need to start preparing earlier.
I have seen from direct engagement with retail business in Scotland that delivering DRS is operationally difficult and expensive - see our operational guidance for retailers here to get an idea of what DRS will look like in shops and how much businesses need to consider. No one wants to hear about boring operational issues, but we have to face up to them if this is going to work for consumers; how will machines or bins be cleaned, how can bottles be scanned at checkouts, how often will containers be collected from shops, how much storage space will be need for containers, how can customers redeem deposits, and where can staff wash their hands after handling containers. The same applies to wholesalers who need to create more space in their warehouses or for producers that need to put new labels on their products, review their ranges and create new invoicing systems. Many businesses have been caught out by the sheer scale of the action required, the delay to Scotland’s DRS should be a wake-up call for all businesses to start planning sooner.
7. Businesses and sectors need to be more willing to work together.
Retailers and producers are not really set up to collaborate - in fact its activity discouraged by competition law! Yet, DRS forces competitors, suppliers and retailers, and other sectors to come together and work in partnership. This is a new and unfamiliar way of working for many, but it is necessary to deliver such complex recycling infrastructure, new IT systems and a new proposition to consumers. No doubt trade associations will play an important role in facilitating cross industry working but some bi-lateral engagement will be needed to smooth out supply chain issues, design of the overall system and the communication of its purpose.
8. Build and plan sustainable infrastructure.
If we want to avoid having duplicating reverse vending machines across high streets and retail parks and the most expensive DRS in the world, we need to strategically map return point locations. From other DRS systems we know that the frequency of returns by consumers consolidates overtime - they don’t always visit return points daily but collect materials and return to the most convenient locations for them. As a result, we don’t need return points on every street corner, but we do need enough to be convenient for consumers. This means we need a well-designed DRS that allows some businesses to be exempt and we strategically map return points, the same way we do for essential infrastructure like Post Office or ATMs. The DMO will have to co-ordinate this, but business will also have to work together to assess and curate the right provisions via return points in shops or community return points in rural areas.
9. Don’t forget the customer!
We haven’t got far enough down the DRS pathway to start telling consumers how to cope with the biggest change to recycling in the UK in a generation. This will not be easy. While there is lots of polling to suggest that consumers support the introduction of DRS there will still be backlash. Focus groups of consumers I have heard show they soon move past the romanticised memories of their own or their parents’ childhood, wistfully collecting bottles from the street for pocket money. Instead, it moves to “why do I have to take back my sticky drinks bottles to the shop when used to put them in my recycling bin?” Or “why has my multi-pack of drinks gone up so much?” I’m not suggesting this should stop us doing DRS, only that we need to have properly considered how to communicate this change to consumers if we want to meet our ambitious targets.
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