The Brief: Everything you need to know about deposit return schemes

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Deposit return schemes (DRS) are rapidly gaining ground across Europe and beyond as governments and regulators push for higher beverage packaging collection rates. This report examines how DRS is shaping up as a cornerstone of environmental packaging policy, highlighting where it works, what challenges remain, and how stakeholders are responding.

• DRS is becoming EU law: A provisional EU agreement mandates that Member States must collect 90% of single-use plastic bottles and metal beverage containers annually by 2029, positioning DRS as the default solution.
• Consumer support is strong, but so is confusion: Countries like Latvia and Ireland report widespread public approval, though some consumers struggle with the process, citing low deposits and unclear steps.
• Implementation is uneven: While Latvia and Romania have seen rapid collection rate increases, countries like France and Austria have lagged, often due to political pushback or infrastructure delays.
• Tech is enabling scale: Companies like Sensoneo and TOMRA are rolling out advanced, IT-integrated reverse vending systems to streamline DRS implementation across diverse markets.
• Industry reactions are split: Beverage companies and recycling advocates largely support DRS, but local authorities in places like France warn of added consumer costs and system overlaps.
• Sales fears appear unfounded: Despite industry concerns that DRS may deter purchases, studies show no solid link between deposit schemes and declining beverage sales.

Deposit return schemes are no longer just pilot projects; they are becoming regulatory mandates with global momentum. While challenges remain in funding, education, and system integration, the early results suggest that DRS can significantly improve packaging recovery rates. Governments and industry players alike must now focus on refining implementation, ensuring consumer convenience, and aligning national systems to hit EU-wide targets.

Deposit return schemes are taking off in Europe and beyond, and it appears they will continue to do so as they are cemented into international packaging legislation. In this edition of the Brief, we recap how the systems function, where they are or aren’t working, and what the industry and consumers alike have to say about them.

Speaking on a panel at the Sustainable Packaging Summit 2023, EU Corporate Advocacy Group managing partner Hans Von Bochove explained how beverage packaging is a unique category in the upcoming Packaging and Packaging Waste Regulation, in that the text sets out a specific method by which to achieve its targets – a system known to the industry by the abbreviation ‘DRS’.

Its full title alternates between a deposit return system, deposit return scheme, or deposit-refund system, but the premise remains the same. Consumers pay a deposit to acquire a packaged product; as Von Bochove indicated, it is most often a beverage sold in plastic bottles or metal cans. In theory, participants are incentivized by the promise of getting their money back and return their empty packs to a collection point.

Sometimes the containers are collected for reuse, in which case the returns are washed, refilled, and put back onto the market. Other systems deliver them to a recycling plant to be repurposed into new packaging or a different product. In either scenario, the goal is to capture used packaging before it ends up in the environment, contribute to circular systems, and reduce the industry’s consumption of virgin plastics.

While it is still pending formal adoption, a provisional political agreement between the European Parliament and Council mandates that EU Member States must separately collect at least 90% of their single-use plastic bottles and metal beverage containers every year by 2029, and it upfronts DRS as the way forward. This development comes after years of disagreements on the subject, with conversations flaring up as the Regulation comes to fruition.

Legislation

Prior to the plenary vote, Natural Mineral Waters Europe (NMWE), Minderoo Foundation, Reloop, UNESDA Soft Drinks Europe, and Zero Waste Europe signed a joint letter. They argued that deposit return schemes should remain mandatory in the final text – and, in their view, exemptions should only be made in scenarios where other Extended Producer Responsibility schemes could achieve similar collection rates.

This aligned with an ENVI Committee report published back in October 2023, which feared that, if the European Parliament were to replace deposit return systems with new amendments, it could cause bottlenecks in reuse and recycling schemes and contribute to environmental pollution.

With the reveal of the European Parliament’s new position in November and the discussions held during the plenary session, UNESDA backed the enforcement of compulsory DRS. It suggested that a priority mechanism should be introduced at the same time to provide the relevant industries with enough access to certain feedstock for recycling, while Patricia Fosselard, secretary general at NMWE, stressed that exemptions should be “subject to stringent requirements”.

Indeed, the European Council’s General Approach went on to propose a 90% separate collection rate for single-use plastic bottles and metal beverage containers by 2029 – a target that deposit return schemes were hoped to unlock. Here it was suggested that systems would be exempt if they were founded before the regulation entered into force and reach a 90% collection rate by 2029, and this caveat would ultimately reach the final legislation.

A similarly optimistic outlook on the technology’s capabilities came from a parallel discussion surrounding the United Nations Environment Program (UNEP)’s Global Plastics Treaty as TOMRA uplifted deposit return systems as a direct route to a 90% plastic collection rate.

On the other hand, the Council suggested that the Commission and Parliament’s respective PPWR collection rate targets of 90% and 85% by 2026 – at which point Member States would be considered exempt from the deposit return scheme mandate – should be lowered to 78%. UNESDA was critical of this decision, suggesting that existing DRS had already achieved collection rates as high as 95%. It feared that lowering the point of exemption could stall the development of beverage packaging collection within the EU.

The Brewers of Europe also responded to the Council’s General Approach, in which wines and spirits were exempted from the reuse and deposit return scheme obligations that beer remained tied to. Allegedly, the ‘discriminatory’ rules violated the EU’s Single Market basics of fair treatment between competing products and did not adhere to the rulings of the European Court of Justice.

It had asserted in a previous statement that deposit return systems could take up to five years to be fully implemented and called for ‘realistic timelines’ to adopt the new legislation. Now the current draft of the text mandates that, by the first day of 2029, deposit return schemes must be introduced for single-use plastic and metal beverage containers of up to three litres in size for all beverages except wine, aromatized wine, spirits, milk, and milk products – leaving four years and nine months to install them, as of this publication.

As per the compromise deal, systems that exist prior to the date the Regulation enters into force and achieve a separate collection target of 90% by 2029 will not be held to the minimum requirements. Member States can also earn their exemption if they can achieve a separate collection rate of over 80% in 2026 and provide a strategy to achieve the Regulation’s 90% target for separate collection without DRS.

Action

DRS have already been established in various global regions. Some well-established schemes have begun to make progress, with five countries utilizing Sensoneo’s ready-to-integrate, end-to-end IT system at present. The solution is cloud-based, gathers and shares data across the process chain, and is designed to be agnostic with any return vending machine; thus, in the company’s view, it can be adapted to suit the requirements of any country’s deposit return scheme.

For example, Romania currently claims to offer one of the world’s largest centralized deposit return systems. It became the thirteenth European nation to offer a DRS for beverage containers when it launched the system, operated by RetuRO, in November 2023.

Consumers are charged a deposit of 0.5 Romanian lei (approximately €0.10) for every plastic, glass, and metal drinks container of between 0.1L and 3L in size. Once the empty container is returned to an automated or manual collection point, consumers will receive their deposit back in cash or, alternatively, in voucher form. All legal entities producing, importing, or selling beverages in single-use containers are required to participate in the scheme, and only milk packaging is not compatible as of this article’s publication.

Last year, former Minister of Environment, Water and Forests Mircea Fechet revealed that Romania’s collection rate was at 12% to 13%. Its target for 2024 is 65%, which rises to 80% for 2025 and 90% for 2026.

Comparatively, Austria currently claims to collect 70% of its single-use beverage packaging to be recycled. It does not yet offer a deposit return system but plans to launch one in January 2025 – making similar use of Sensoneo’s IT system to pursue an 80% collection rate by the end of the year. The goal will then rise to 90% for 2027.

Consumers will be charged a deposit of €0.25 for any PET bottle, or metal can between 0.1L and 3L in size bearing a deposit logo. These can be returned to any participating sales outlet.

Latvia’s system celebrated its two-year anniversary in February this year. Depozīta Iepakojuma Operators (DIO) has reported a 38% increase in the country’s collection rate before and after the DRS was introduced, alongside a specific increase of 40% for refillable drink containers and an overall return rate of 80% across the country.

As such, Latvia is believed to have overtaken the EU Single-Use Plastics Directive’s target to separately collect 77% of plastic drinks containers by 2025. Going forward, it expects to achieve a 90% collection target in line with the Directive’s 2029 deadline.

Consumers have also seemed to welcome the transition. Reportedly, 80% of the population and 94% of Latvian households use the deposit system at least once a month. DIO adds that 69% of participants had recommended the system to a friend as of March 2023.

Similar enthusiasm has arisen in other countries, but so has confusion. Prior to Ireland’s introduction of a DRS, Amárach presented research suggesting that 82% of respondents supported the implementation and 95% planned to get involved with the initiative.

Moreover, 94% claimed to consider the effect their recycling habits would have on future generations; 76% felt that their individual efforts to recycle and reuse drinks containers could have a positive impact on the environment; and 82% believed that paying a deposit would encourage them to return their empty drinks containers.

In the lead up to the system’s introduction, Travis Way, managing director at EcoVend by Reconomy, underlined the potential for stores and retailers to build customer loyalty, improve their data capabilities, and use the reverse vending machines themselves as advertising space. Yet a survey conducted by Every Can Counts since the scheme commenced saw 29% of Irish consumers admit they aren’t sure how to use it.

A further 36% believe they lack the space to store uncrushed drink containers; 22% feel that the refundable deposit is too low to motivate them to participate in the scheme; 17% are overwhelmed by the number of steps involved; and another 17% struggle to find the time to return their packaging to a collection point.

Nevertheless, almost seven in ten feel encouraged to recycle now that the scheme exists. Of this figure, concern for the environment is reported as the driving force behind their participation. Another 75% state that, if they better understood the effects recycling has on the environment, they would be more likely to utilize the DRS.

Notably, over three-quarters of respondents stated that they would be incentivized to buy a drink container if they believed it to be recyclable; this includes aluminium cans, which, according to Every Can Counts programme manager Chris Latham-Warde, are indefinitely recyclable. He continued to assert that using recycled metal to produce cans requires 95% less energy than producing them from virgin alternatives – a benefit that could further incentivize collection.

The Irish system is still new, having made its debut in February 2024. Plastic and aluminium containers between 150ml and 500ml in size will cost consumers 15 cents, while those from 500ml to 3L charge 25 cents. Only products bearing a Re-turn logo are eligible for a refund, which will be repaid if and when the empty and undamaged container is returned to a participating shop or supermarket.

Reverse vending machines will provide instructions to guide consumers through the process of returning their containers. Inserting a drink container will give the user access to a voucher, which can be taken to the till in exchange for a full refund or credit towards their next purchase. Consumers can also opt to return their packaging directly over the counter.

In line with the Single-Use Plastics Directive, Ireland has set a separation and collection target of 77% for plastic beverage bottles by 2025, and the figure will increase to 90% in 2029. The same targets apply to the Hungarian system, driven by central system administrator MOL Hulladékgazdálkodási Zrt. (MOHU) and utilizing TOMRA technology. In particular, this DRS is geared towards ‘new recyclers’.

Like many of the aforementioned systems, the scheme is open to single-use, 100ml to 3L glass and plastic bottles and aluminium cans for concentrated or ready-to-drink beverages, excluding milk or milk-based products. It charges a deposit of 50 Hungarian forint, the equivalent of around €0.13, and the packs can be returned at voluntary and manual sites, or at grocery retailers larger than 400m².

As of January this year, TOMRA had installed over 1000 high-volume reverse vending machines at supermarkets, hypermarkets, and other medium-to-large locations across Hungary, and more will roll out over the course of this year.

Increasing interest in deposit return schemes expands beyond Europe, however. As part of a long-term agreement, TOMRA previously invested €36 million into new infrastructure for a deposit return scheme in Quebec.

Before 1^st November 2023, only PET, beer or soft drink cans, and a small portion of one-way glass was compatible with the city’s existing DRS. Now it will welcome all cans, plastic and glass bottles, and cartons for drinkable liquids between 100ml and 2L in size. The deposit and refund value has also doubled to 10 cents for all materials except for glass, which is five times higher at 25 cents.

The previous return-to-retail model, in which return points are located in the same supermarket the beverage is bought from, has now become a ‘hybrid’ return model. Dedicated return centres are being introduced across the city this year, including large centres operating on a throughput model and smaller centres that will purchase reverse vending infrastructure and subscribe to a service agreement.

As a whole, the new measures aspire to streamline the deposit system for Canadian consumers and reach a 90% return rate for eligible drink containers. The second phase of the expansion – involving the addition of more container types and return locations – is projected for March 2025.

Around 1,350 TOMRA T9 and T70 reverse vending machines, as well as its Expert Line bulk collection technology, will be installed at redemption centres by the Quebec Beverage Container Recycling Association (QBCRA) over the next three years.

Reaction

Making deposit return schemes mandatory is expected by many to benefit Member States whose collection rates are currently falling short. France, for example, is reported to collect 60% of its PET bottles, meaning the country falls behind on the Single-Use Plastics Directive’s target for 2025 by 17%. In theory, introducing more effective collection schemes could prevent a wider domino effect that would impact EU-wide recycling and recycled content targets; instead, virgin materials could be phased out in favour of a single stream of high-quality, food-grade recycled material.

Yet local French authorities have called for deposit return schemes to be scrapped, asserting that they are expensive to implement and only benefit the financial interests of beverage companies.

Jean-Yves Daclin, general manager at Plastics Europe, explained to Euractiv France that Citeo currently takes a fee for each packaged product a beverage company places on the French market, which is used by local authorities to fund the collection, sorting, and processing of household packaging waste. These costs are not expected to change if deposit return systems are introduced, yet participating retailers would take a cut of the revenue for their role in the collection process.

As a result, Intercommunalité de France warns that French consumers would have to pay both the deposit and a fee for household waste collection.

In December 2023, the European Council’s General Approach suggested that Member States achieving collection rates of 78% for its plastic bottles should be exempt from deposit return schemes – lower than the Commission’s 90% threshold and Parliament’s 85% equivalent. Yoann Jacquet, head of communications at Intercommunalité de France, told Euractiv France that he viewed the adjustment as a “lesser evil”, but felt that “it does not fully meet our expectations” – and the derogation threshold would ultimately increase to 80% by 2026 in the Regulation’s subsequent provisional agreement.

Zero Waste France adds that French hygiene regulations prevent the reuse of returnable plastic bottles and direct them straight to the recycling stream – and, given Jacquet’s assertion that plastic bottles are one of the most recycled packaging types in the country, some view the implementation of deposit return schemes as an attempt to fix a system that isn’t broken.

“The deposit is a lever that we would be very much in favour of if there were no existing and effective collection and recycling system,” Daclin added.

Local representatives have instead raised the alternatives of streamlining existing recycling processes and improving public waste sorting facilities.

Intercommunalité de France adds that deposit return infrastructure could “discourage citizens from adhering to the single sorting gesture”, but statistics do not necessarily agree. Reloop found in a 2023 survey that 92% of French consumers are in favour of deposit return scheme legislation, many of them over 60 years old. Another study identified 25-to-34-year-olds and regular beverage consumers as the predominant demographic and revealed that only 16% of respondents were against the concept.

This is not the first time the general public’s interests have contradicted those of corporations. Back in 2020, such organizations as REWE Group, Spar, Hofer, Lidl, Brau Union, Spitz, and Pfanner lobbied against the introduction of an Austrian deposit return scheme. On the other hand, an opinion poll suggested that 83% of Austrian consumers backed its implementation, while 86% were eager for further action to be taken against plastic pollution.

Changing Market Foundation responded with an allegation that the board of directors at Altstoff Recycling Austria (ARA) – the country’s largest EPR organization, then said to handle over 70% of the country’s waste – was leading a campaign to sway the government’s decision.

In its view, “companies under the ARA umbrella have a position almost like that of owners, with legal powers that allow them to use ARA for their own interests.” While the companies in question were campaigning against DRS legislation, the Foundation described it as “crucial” to lowering virgin plastic production, improving reuse and recycling rates, and saving the €120 million then spent on cleanup resources.

Further still, it accused ARA, REWE Group, Hofer, Lidl, and others of “symbolic monetary contributions” to voluntary clean-up and awareness initiatives like Reinwerfen statt Rauswerfen while attempting to block DRS legislation. Yet it argued that DRS is “one of the most effective mechanisms to reduce litter”, and the planned implementation of such a system in Austria seems to indicate the government’s agreement.

Other DRS opponents have argued that deposit return systems can drive down beverage container sales. They posit that repeated deposit payments will build up and become a ‘consumption tax’, causing consumers to disengage. The potential inconvenience of returning empty packaging may also be considered as a price increase; for example, factoring in petrol or diesel prices to cover the journey to a collection point.

Reloop and the Container Recycling Institute (CRI) counter that deposits are refundable, so the investments should not go amiss so long as the system is accessible and convenient. Rather, the promise of repayment may be an incentive, not a deterrent. Statistics from GS1 UK previously revealed that, while 26% of respondents did not know what a DRS was, 60% would be encouraged to participate by the prospect of getting their money back. Furthermore, deposit return systems are increasingly being designed for convenience, the companies argue, including for consumers with financial restraints – and TOMRA recently commenced market testing for its R2 reverse vending machine, which accounts for disabled users.

In their study, Reloop and CRI listed supply and demand, purchasing patterns, marketing and advertising campaigns, health trends, and even the weather as potential factors in consumers’ decision to buy drinks, but found no conclusive evidence to connect declining sales to DRS. Fluctuating beverage sales were thought to remain within a normal variation range and adhere to regional trends – and, despite fears that retailers could make extra profit from consumers’ deposits by sourcing their beverages from neighbouring jurisdictions without a DRS, they gesture towards “the crucial need” for “stringent penalties for producers and retailers who fail to comply with the law, along with robust governance mechanisms and measures to ensure accountability of the system.”

Additionally, some industry players are sceptical of the European Commission’s estimated carbon savings and costs regarding deposit return schemes and other circular reuse systems. Whereas the Regulation’s impact assessment asserts capital and operating costs for all reuse schemes, including DRS-related costs for refillables, will cost €1.48 billion, a study carried out by PwC suggests that the soft drinks sector alone will need to pay €16 billion to pursue a 10% refillable PET target at EU level.

The criticism has been reinforced by Neil Osment, managing director at NOA, who stated that reusable systems call for “massive initial investment” in container stocks, washing, collection, storage, transport, and distribution facilities. These investments must be repeated frequently, he explains, and points to the vast financial claims made by brand owners after the Scottish government paused its national DRS.

Back on the Sustainable Packaging Summit panel, EXPRA’s managing director, Joachim Quoden, also warned that DRS should not be a blanket solution and should only be introduced for countries where they will be useful. He stated that, “even if you start a DRS, it will not solve your general waste management or plastics problem” – emphasizing that a functional EPR system is still necessary. On the other hand, UNESDA director general Nicholas Hodac underlined the necessity of addressing shortcomings in collection and recyclability to prevent a complete plastic ban.

Discussions will undoubtedly continue as systems keep rolling out. Improvements are being made to technology and legislation alike, and collection and engagement rates have generally been positive so far. The enforcement of DRS throughout the EU seems to guarantee that the deposit return system is here to stay, and is sure to test its effectiveness in the long run – but it remains to seen whose stance on the matter will be proven right.

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