Senior Consultant at Resource Futures, Carla Worth, explores how a digital system could enhance a deposit return scheme in the UK, and why she thinks Government should “seriously consider it”.
When was the last time you used cash to pay for something? For me it was a couple weeks ago, at my favourite Thai restaurant. I got my phone ready to pay using my mobile wallet as I always do, when I was told that their card machine wasn’t working. I had to leave the restaurant in search of a cash point to pay my bill.
Since then, I’ve come to realise how probably 95% of all payments I make are either online or contactless using my phone. Just this week I bought a bike from someone on Gumtree with a speedy bank transfer. It’s little wonder why. It’s fast, it’s easy, you can track your transactions, spend trends, payment requests, fare splitting… and these are just some of the benefits of cashless payments.
Now, imagine I told you that there were plans to roll out a new suite of cash points across the country. Businesses accepting cash payments would be required to have a cashpoint in their shop. These cash points are going to cost the government nearly £2 billion (over 11 years), and all this just when physical cash and payments are moving online. It’d feel pretty backwards, wouldn’t it?
A lot has changed since the 80s. Digital solutions have been applied to nearly all aspects of our lives…
Well, you’ll be relieved to know that this isn’t actually happening, but it’s a comparison that was made to me at a recent industry event about Deposit Return Schemes (DRS) that I haven’t been able to shake off.
The Government is planning to introduce a deposit return scheme (DRS) in 2024. Instead of disposing of your drinks containers in your recycling bin as you do now, the idea is that you store your containers at home, and then return them using a reverse vending machine (RVM) the next time you do your shop.
This system is not new – those of a certain age may fondly remember taking empty ‘pop’ bottles back to the shop to collect cash refunds in the ‘80s and DRSs has been proven to work in Europe – countries like Sweden, Iceland, and Finland all introduced a DRS around the 1980s as well, with others like Germany and Norway following suit in the early 2000s.
A lot has changed since the 80s. Digital solutions have been applied to nearly all aspects of our lives. Smartphones and apps have revolutionised how we order food and taxis, how we work, and how we meet each other.
What’s more, while Sweden and Germany have been investing in the smooth operation of their DRS, the UK has over the past two decades invested heavily in developing a well-functioning kerbside recycling system.
As a result, Wales has achieved the fourth best recycling rate in the world, largely due to their segregated waste collections at kerbside. It seems wrong somehow to introduce a policy today that relies on manufacturing heavy and expensive electronic machinery (which will one day itself become waste) that are centrally located in retail shops… an innovation of the early 2000s.
What is a DDRS?
DDRS, or digital deposit return scheme, refers to a type of DRS design that gives consumers the ability to scan a serialised code on a drinks container to redeem a financial deposit using a smart phone app. The consumer would then place the container in their existing kerbside recycling bin instead of travelling to an RVM.
Serialisation provides a unique code for each container and is required in a DDRS to prevent the user scanning the same drinks container multiple times to fraudulently claim extra deposits. By having uniquely serialised barcodes, each deposit is linked to a single specific drinks container and can only be redeemed once.
It’s only natural that there is increasing talk of how technology could support a modern-day DRS, particularly whilst taking advantage of this UK kerbside recycling infrastructure. At Resource Futures, we’ve taken a lead in researching the feasibility of how technology could work alongside the traditional DRS model, to offer and enable more flexible and convenient returns in a modern-day DRS.
Digital solutions applied to DRS could enhance existing systems, whilst reducing the burden on RVM infrastructure and increasing convenience for the consumer. At a high level, Digital DRS (DDRS) is understood to be half the cost, consumers can continue using their kerbside bins, and it can facilitate smart waste tracking – increasing visibility and transparency in supply chains. This last point alone I believe should be reason enough to seriously consider a DDRS.
Serialising consumer products is not new, all pharmaceutical and tobacco products already require serialisation.
There are many reasons to serialise products beyond supporting a DDRS, such as targeted consumer engagement, directly engaging consumers through rewards and loyalty programmes, producer mapping of their own supply chains, and tracking consumption and confirming authenticity of products.
There are several innovative projects drawing together technology and packaging, such as the Holy Grail 2.0 project, which is investigating applying digital markers on products to enable smarter recycling. In the EU, the Sustainable Products Initiative is investigating the development of digital product “passports”, which will likely contain unique product identifiers. While there is no obligation on the UK to implement similar product passports, the direction of travel in the EU market toward digital tracking and recording of product information may be important to consider for future policy.
The Government is expected to publish their response to the DRS consultation imminently. In it, they will likely recognise digital DRS as a potential technology solution. While the Government’s interest in this space is encouraging, placing more importance on DDRS’s potential for innovation and scale up is needed. For example, applications for DMO could include a question on how the applicants would implement a comprehensive DRS including digitally enabled kerbside returns. This question could receive a score relative to how important it is to each devolved administration.
Technology is needed to design flexible, future-proof policy.
In the future, a DRS for drinks containers may not be enough. A DRS, arguably, may be more effective on items which people do not typically recycle or dispose of correctly, and which we know contribute massively to litter. Serisalisation could help support the proper disposal of food packaging, crisp packets, and vape products.
Rather than having to change the physical attributes of each individual RVM to accept new/different products, printing a serialised code on these products could nudge consumers to identify them as in scope of a DDRS, and they could recycle them at home. By placing a financial value on the items which people most commonly litter, we can incentivise people to care more about how they dispose of these items. A DDRS has the agility to help support that scale-up to other materials and packaging formats.
Packaging, like payments, is going digital. So should DRS. The UK is in the exciting position of developing new and ambitious policies to propel us into a low-waste future – not incorporating data and technology in this transition would represent a huge missed opportunity. While RVMs still have their place and would be needed for a fully accessible DRS, future innovations around product tracking and digitisation are heading in the direction of serialisation-enabled solutions. The potential benefits of material resource management are clear and looking to implement a future-proofed DRS solution that is digitally-enabled and flexible is the optimum solution.
Have something you’d like to say? Get in touch with Carla Worth at email@example.com, or catch her at RWM on 14 September, where she will be speaking about DDRS with other waste and recycling industry experts.
To find out more about Resource Futures’ work in this space, read our high level economic impact assessment, and DDRS Feasibility Study reports for the Welsh Government. Phase 1 report examines stakeholder perceptions of DDRS design and feasibility, and Phase 2 investigates potential end-to-end designs for a DDRS.