Commenting on the most recent developments of the Welsh Deposit Return Scheme, Jason Galley, director and chief executive of the MPMA, said:

“The appointment of Exchange for Change as the Deposit Management Organisation (DMO) for the Wales Deposit Return Scheme (DRS) removes a major barrier to progress and interoperability between the UK’s schemes but attention must now shift quickly to delivery and avoiding unintended consequences. 

“After a period of delay and uncertainty, the metal packaging sector needs clarity, momentum and a practical route to interoperability if UK-wide schemes are to be on schedule and deliver the environmental benefits they promise. With a little over a year until the launch date in October 2027, there is no room for further delay. Success will depend on rapid, coordinated action to establish infrastructure, prepare businesses and build consumer buy-in. 

“Ultimately, Deposit Return Schemes exist to increase collection and recycling rates. The aluminium beverage can and its role with the circular economy isn’t just a ‘sustainability’ concept, it’s a proven, functioning, real-world supply chain. Successful schemes across the globe recognise the can’s inherent circularity and its role in supporting decarbonisation and resource efficiency. But as implementation progresses, Exchange for Change and policymakers must be mindful of the unintended consequences that can arise from seemingly simple policy decisions.

“One area requiring careful reconsideration is the proposed use of a flat-rate deposit across all beverage containers, regardless of size, material and recyclability. The financial burden on consumers should not be underestimated. A shopper buying 10 x 250ml canned beverages would face an additional £1.80 upfront deposit versus a single 2.5l plastic bottle through the flat-rate deposit of 20p per container. At a time when household budgets remain under pressure, these additional fees risk undermining public support for the scheme.

“While simplicity has its advantages, policy design should not inadvertently incentivise consumer behaviour that runs counter to wider goals. Put simply, a flat-rate deposit across all container sizes encourages consumers to choose larger-format, less-circular packaging, undermining environmental objectives. Portion control and minimising food waste are additional goals that are undermined by a flat-rate deposit approach that guides the consumer to larger-sized containers. Achieving high-performing recycling systems requires policies that are supportive of the most circular packaging, evidence-led and well thought-through.

The EPR connection – glass in Wales DRS

MPMA’s view is that the discussion around Deposit Return Schemes cannot be separated from wider reforms to packaging Extended Producer Responsibility (EPR).

Galley continued: “A 2021 ministerial decision to exclude glass from the Deposit Return Scheme in England, Northern Ireland and Scotland is already distorting the market. It remains to be seen how consumers will react to the choice between DRS and DRS-exempt containers.

“With Wales including glass in DRS collection, we expect future calls for the transition of collection funding away from EPR to DRS, increasing the burden on the remaining EPR packaging formats. This is especially damning for the steel can, which due to its 9 times higher density, will pick up a disproportionate burden under Defra’s weight-based system compared to competing plastic and fibre-based composite cartons.

“The call to introduce an immediate 75% reduction in glass pEPR fees while a wider review of the scheme is undertaken poses further real-world issues. How will it be paid for? If funded from outside the EPR budget, it would make the fee for a steel container some 40% higher than for a glass food jar which does not make sense considering the relative amounts of material each container uses.

“And it could get worse depending on how it is proposed that this £300 million or so discount is funded. One thing that has to be avoided is the redistribution of costs across other packaging formats. MPMA calculations show that such a move would increase the already perverse EPR premium to buy steel – the most recycled packaging material – to around 75% vs plastic and fibre-based composite cartons and 50% vs glass.

“Changes that reduce fee obligations for one material inevitably alter the cost burden elsewhere. So depending upon how the Government reacts, jobs saved in one packaging sector can translate to jobs lost in another. There is a risk of creating market distortions, undermining investment confidence and generating unintended outcomes across not only packaging supply chains but across those vital metals that are the subject of strategic government intervention elsewhere. 

“While Defra faces a complex challenge of its own making, a wholesale discounting of glass pEPR fees is not the answer if it increases the burden on steel. Ministers, policymakers, Exchange for Change and PackUK must consider not only the impacts on one industry but also the knock-on consequences for others. 

“As governments refine Deposit Return Schemes and wider packaging reforms, it is important that policy reflects the environmental contribution of highly circular materials. Successful recycling systems depend on recognising the value different materials bring and ensuring incentives support, rather than undermine, established circular supply chains. The objective of packaging reforms should be to reward circularity performance, not to create winners and losers through skewed policy intervention.

“Metal packaging manufacturers possess considerable technical expertise and operational knowledge that can help support successful implementation. Constructive engagement between MPMA and the Deposit Management Organisation will be particularly important as scheme details are finalised and we work together to create a successful, effective recycling system that maximises circularity. The priority now is to get on with its delivery.”