Industry Working Group Contributes to Consultation on DRS with New Report

The Digital DRS Industry Working Group, a grouping of nine trade bodies and companies across the drinks containers value chain, today released a new report on the potential for a Digital DRS to deliver Government’s stated objectives on deposit return at a significantly lower cost to society.  The report, ‘Digital Deposit Return Scheme – high level economic impact assessment’, was commissioned from leading consultancy Resource Futures and has been submitted to the current consultation on proposals for DRS issued by Government in England, Northern Ireland and Wales.

The research utilised the revised Defra Impact Assessment published as part of the current consultation. It modelled an example Digital DRS system, which was agreed at an industry and stakeholder workshop, taking cost and technical information provided by a range of digital technology providers active in this area. An estimated cost of implementation was projected and compared to the Government’s current proposals modelled in their Impact Assessment.

The findings acknowledge that further technical and environmental impact research is needed in important areas such as the logistical feasibility of serialised code labelling of cans and fully understanding the carbon emissions balance of a Digital DRS compared to Government’s current proposals.  Further communications research is also needed to better understand the public’s preparedness for deposit return, whether that be through a primarily return-to-retail model using reverse vending machines, Digital DRS, or a hybrid model that utilises both options.

With those important provisos in mind however, the key findings of the report indicate that significant cost savings could potentially be made if a Digital DRS were to be the primary route to implementation of deposit return.

Key findings of the report indicate that a Digital DRS:

• has the potential to reduce the cost of implementation of DRS by £3,344m over eleven years (compared to the ‘all-in’ RVM-based DRS Option 2 modelled by Defra in their Impact Assessment);
• provides a Benefit-To-Cost (BCR) ratio more than twice as good as the same Option 2 ‘all-in’ DRS (3.962 compared to 1.927).

Summary of Net Present Value, cost, Benefit-To-Cost, £m (2022-32) [1]

This is based on the expectation that a Digital DRS would require many fewer reverse vending machines, utilise the c28 million collection points that already exist at peoples’ homes and be supported by a suitable network of ‘away-from-home’ collection points.  This would utilise the best potential for both reverse vending and Digital DRS to properly capture deposited packaging containers either at home or away from home.

Spokesperson for the Digital DRS Industry Working Group Eric Randall commented:

“We believe this research is an important contribution to the debate about implementation of a Deposit Return Scheme and congratulate Resource Futures on a robust exercise which involved high levels of industry engagement on providing data and insight.  The Industry Working Group recognises that there is more work to be done on the feasibility of Digital DRS, but the opportunity is clearly there.  The significance of the potential high financial savings is notable, and we call on Government to support industry in delivering the next stages of technical and social research needed.”

“As importantly, we ask Government to ensure that the mechanics of implementation of Deposit Return currently under development are future-proofed and do not exclude the potential for introduction of Digital DRS as a delivery mode for Government’s policy objectives.  In particular, we ask for consideration in the drafting of Regulations that will come forward as part of the implementation of the Environment Bill and that the procurement and tendering process for the Deposit Management Organisation also do not exclude the ability to deliver utilising a Digital DRS.”

The full report has been submitted to Government’s current consultation which ends this Friday 4th June, and is available here.

[1] Calculated on the basis of accrual costs. Digital DRS ‘all-In’ values are estimates from the research in this report. Other DRS options are presented in the last three columns using economic costs and benefits estimates presented in: Defra (2021), Introducing a Deposit Return Scheme on beverage containers – Impact assessment, https://consult.defra.gov.uk/environment/consultation-on-introducing-a-drs/supporting_documents/Impact%20Assessment.pdf