Case study: Deposit return schemes & packaging reuse — a city or utility pilot and the results so far

Scotland's deposit return scheme (DRS), launched on 16 August 2025 after years of delays and political debate, collected 360 million containers in its first five months of operation, achieving a 72% return rate for PET bottles and aluminum cans, according to Circularity Scotland's interim performance report (Circularity Scotland, 2026). That figure compares to a pre-DRS recycling rate for beverage containers of approximately 48% through kerbside collection alone, representing a 50% increase in material captured for closed-loop recycling within a single fiscal quarter. The Scottish experience, alongside established systems in Estonia, Lithuania, and the Nordic countries, offers concrete lessons for jurisdictions designing or scaling deposit return and packaging reuse programs.

Why It Matters

Europe generates approximately 35 million tonnes of packaging waste annually, and beverage containers represent one of the most visible and voluminous categories of littered waste. The European Commission's Packaging and Packaging Waste Regulation (PPWR), adopted in late 2024, requires all EU member states to implement deposit return schemes for single-use plastic bottles and metal cans by 2029, with a mandatory 90% separate collection target by 2030 (European Commission, 2024). Countries that already operate DRS programs consistently achieve collection rates of 85 to 97%, compared to 30 to 55% in jurisdictions relying solely on kerbside collection.

The financial stakes are significant. A well-designed DRS generates revenue through unredeemed deposits, material sales, and producer fees, while reducing litter cleanup costs and landfill volumes. The Norwegian system operated by Infinitum reported net operating revenue of NOK 320 million ($30 million) in 2024, with a 92.8% return rate for plastic bottles (Infinitum, 2025). Conversely, poorly designed schemes can impose disproportionate costs on small retailers, create logistical bottlenecks, and fail to achieve the collection rates that justify their complexity.

For executives responsible for packaging strategy, Extended Producer Responsibility (EPR) compliance, or municipal waste management, understanding what distinguishes successful DRS pilots from failed implementations is essential for capital allocation and regulatory preparedness.

Key Concepts

Deposit return scheme (DRS): A system in which consumers pay a small refundable deposit (typically EUR 0.10 to 0.25) when purchasing a beverage in a single-use container. The deposit is refunded when the empty container is returned to a designated collection point, usually a reverse vending machine (RVM) or manual take-back counter at a retail location.

Reverse vending machine (RVM): Automated equipment installed at retail outlets, public buildings, or dedicated collection hubs that accepts empty containers, validates them using barcode scanning or shape recognition, compacts or stores the material, and issues a refund receipt.

System operator: A typically not-for-profit organization established by beverage producers and importers to manage the operational infrastructure of a DRS, including RVM deployment, logistics, counting centers, and material sales. Examples include Infinitum (Norway), TOMRA-Returpack (Sweden), and Circularity Scotland.

Closed-loop recycling: The process of collecting used packaging, recycling it into the same material grade, and manufacturing new packaging from that recycled content. DRS programs achieve significantly higher closed-loop recycling rates because they collect cleaner, less contaminated material streams compared to mixed kerbside collections.

Packaging reuse systems: Complementary or alternative models in which containers are designed for multiple uses. Consumers pay a deposit, return the empty container for washing and refilling, and receive their deposit back. Loop, RECUP in Germany, and the Finnish Alko system for glass bottles exemplify different reuse approaches.

What's Working

Scotland's Phased Rollout with Retailer Support

Scotland's DRS covers PET bottles, metal cans, and glass bottles ranging from 50 mL to 3 liters. The deposit is set at GBP 0.20 per container. After initially attempting a "big bang" launch covering all material types, Circularity Scotland pivoted in 2024 to a phased approach: PET and cans launched first in August 2025, with glass containers added in February 2026. This sequencing allowed retailers to install and test RVM infrastructure before handling the heavier and more logistically complex glass stream.

By January 2026, over 14,500 return points were operational across Scotland, including 3,200 RVMs in supermarkets and convenience stores and 11,300 manual return points at smaller retailers. The system processed an average of 2.4 million containers per day. Crucially, the scheme operator negotiated handling fees of GBP 0.035 per container returned for retailers hosting RVMs, providing a revenue stream that offset space and operational costs. Retailers with fewer than 3,000 square feet of floor space were exempt from hosting obligations, reducing the burden on small businesses (Scottish Government, 2025).

Estonia's Rapid Achievement of High Return Rates

Estonia launched its DRS in 2005 and reached a 90% return rate by 2012, making it one of the fastest-achieving systems in Europe. The Estonian system, operated by Eesti Pandipakend, covers PET bottles, glass bottles, and metal cans with a deposit of EUR 0.10. A key design choice was mandating that all retailers selling beverages must accept returns, either through RVMs or manually, which created dense geographic coverage in a country with significant rural population. By 2025, Estonia maintained a 92% return rate with 3,100 collection points serving a population of 1.3 million, equivalent to one return point per 420 residents (Eesti Pandipakend, 2025).

Estonia's system also demonstrates strong financial sustainability. Producer fees average EUR 0.01 per container placed on the market, among the lowest in Europe, because high return rates generate sufficient material sales revenue and the system benefits from unredeemed deposits on the 8% of containers not returned.

Lithuania's Digital Integration

Lithuania's USAD system, launched in 2016, has consistently achieved return rates above 90% since 2019. The system's distinguishing feature is its integration with digital payment infrastructure. Since 2023, consumers can receive deposit refunds directly to their bank account via a mobile app linked to the RVM, eliminating the need for paper vouchers or in-store redemption. This digital pathway now accounts for 34% of all refund transactions, reducing retailer processing costs and increasing convenience for consumers. Lithuania achieved a 92% return rate in 2024 on a system handling 1.1 billion containers annually (USAD, 2025).

What's Not Working

Glass Inclusion Complexity

Scotland's experience highlighted the operational challenges of including glass in a DRS. Glass bottles are heavy (a standard 750 mL wine bottle weighs 350 to 500 grams versus 25 to 30 grams for a PET bottle), require separate handling logistics, and generate higher transport costs per unit. RVMs capable of accepting glass require larger footprints, stronger compaction mechanisms, and more frequent emptying. Several Scottish retailers reported that glass-capable RVMs occupied 40 to 60% more floor space than plastic-and-can-only machines, creating significant challenges for convenience stores and urban retail formats.

The weight and breakage risk of glass also increases logistics costs. Circularity Scotland's interim data showed that glass collection and processing costs were approximately GBP 0.08 per container, compared to GBP 0.03 for PET and GBP 0.025 for cans. Some industry observers have questioned whether glass should be handled through DRS at all, arguing that kerbside collection achieves adequate glass recycling rates (typically 70 to 80% in European markets) at lower system cost.

Small Retailer Burden and Exemption Gaps

Despite exemptions for the smallest stores, retailers in the 3,000 to 10,000 square foot range in Scotland reported significant operational disruption. Storing returned containers, managing RVM maintenance, and processing refunds required staff time equivalent to 4 to 8 hours per week per store location. In rural areas, collection logistics for returned material from small stores proved more expensive than anticipated, with some collection routes operating at only 40% vehicle capacity utilization.

The Republic of Ireland, which plans to launch its DRS in 2025, has faced similar concerns from the Convenience Stores and Newsagents Association, which estimates that compliance costs for small retailers will average EUR 8,000 to 15,000 per year in equipment, space, and labor (CSNA, 2025). Jurisdictions that fail to adequately address small retailer economics risk low participation, consumer inconvenience, and political opposition.

Cross-Border Leakage

In Scotland, cross-border dynamics with England (which has not yet implemented a DRS) created asymmetric effects. Consumers purchasing beverages in England and consuming them in Scotland cannot return those containers to the Scottish system because they lack the required Scottish DRS barcode. Conversely, beverages purchased in Scotland and consumed in England result in unredeemed deposits. While cross-border leakage was estimated at only 2 to 3% of total container volume, it generated disproportionate consumer confusion and negative media coverage, particularly in border communities (Zero Waste Scotland, 2025).

Key Players

Established Companies

• TOMRA: Norwegian manufacturer supplying approximately 80,000 RVMs across 60 markets globally, with a 75% share of the European RVM market
• Infinitum: Norway's DRS operator, managing a system with a 92.8% return rate for plastic bottles and annual processing of 1.2 billion containers
• Circularity Scotland: System operator for the Scottish DRS, managing 14,500 return points and processing infrastructure for three material streams
• Eesti Pandipakend: Estonia's DRS operator since 2005, maintaining 92% return rates at the lowest per-container producer fees in Europe

Startups and Innovators

• RECUP/REBOWL: German reusable cup and bowl system operating across 20,000 partner locations including McDonald's Germany, with over 3 million containers in circulation
• Vytal: Berlin-based reusable packaging platform providing smart containers with RFID tracking to restaurants and food service operators across Germany and Austria
• Canopee: French startup deploying AI-powered material recognition in RVMs to improve acceptance rates and reduce contamination

Investors and Funders

• European Investment Bank: Provided EUR 50 million in financing for DRS infrastructure development across multiple EU member states
• Closed Loop Partners: US-based investment firm with a dedicated circular economy fund supporting packaging reuse infrastructure, including investments in RVM technology and reuse logistics
• SYSTEMIQ: Advisory and investment organization supporting packaging system redesign, including DRS implementation in emerging markets

Action Checklist

• Conduct a container flow analysis to quantify current collection rates, material values, and the gap that a DRS would close compared to existing kerbside systems
• Model deposit levels using consumer price sensitivity data; deposits below EUR 0.10 consistently underperform on return rates while deposits above EUR 0.25 face political resistance
• Evaluate whether to include glass in the initial DRS scope or phase it in after system stabilization for PET and cans
• Negotiate handling fees for retailers that create a genuine economic incentive for hosting return infrastructure, not merely cost neutrality
• Design small retailer exemptions with clear size thresholds and alternative compliance pathways such as nearby collection hubs
• Integrate digital refund options (mobile payments, bank transfers) from launch to reduce retailer processing burden and increase consumer convenience
• Establish cross-border protocols if neighboring jurisdictions lack DRS systems, including consumer communication and barcode harmonization strategies
• Set contractual performance targets with the system operator, including minimum return rates, RVM uptime requirements, and material quality standards

FAQ

Q: What deposit level achieves the best return rate without excessive consumer resistance? A: Evidence across European systems indicates that deposits of EUR 0.15 to 0.25 achieve return rates of 85 to 95%, while deposits below EUR 0.10 typically plateau at 70 to 80%. Norway's NOK 2.50 to 3.00 (EUR 0.22 to 0.27) deposit achieves 92.8%, while Germany's EUR 0.25 achieves 98.4%. The Scottish GBP 0.20 (approximately EUR 0.23) is tracking toward 85% or higher within the first full year. Consumer surveys consistently show that deposit amounts above EUR 0.30 generate significant opposition, particularly for low-value purchases like bottled water.

Q: How long does it typically take a new DRS to reach 80% or higher return rates? A: Most European DRS programs reach 80% within 2 to 3 years of launch. Lithuania achieved 74% in year one and 91% by year four. Estonia reached 60% in year one and 90% by year seven. Scotland's early trajectory (72% in five months) suggests it will cross the 80% threshold within 12 to 18 months. The critical variables are geographic density of return points, consumer awareness campaigns, and deposit level. Systems with return point density below one per 1,000 residents consistently underperform.

Q: Should jurisdictions prioritize single-use DRS or reusable packaging systems? A: The two approaches serve different segments and can coexist. DRS is most effective for on-the-go beverage consumption where consumers are dispersed. Reusable packaging systems work best in controlled environments such as food service, events, and corporate campuses where container return logistics can be managed. Germany operates both a single-use DRS (achieving 98.4% return rates) and a mandatory reusable cup offering for food service (via the Mehrwegpflicht regulation), demonstrating that the systems are complementary rather than competing.

Q: What are the main cost drivers for DRS infrastructure? A: RVM procurement and installation represent 35 to 45% of initial capital costs, with individual machines costing EUR 15,000 to 45,000 depending on capacity and material acceptance. Logistics (collection, transport, counting center operations) account for 30 to 40% of ongoing operating costs. IT systems for deposit tracking, fraud prevention, and producer fee management represent 10 to 15%. The remaining costs cover administration, consumer communications, and compliance monitoring. Total system costs typically range from EUR 0.02 to 0.05 per container handled, which is funded through producer fees and unredeemed deposits.

Sources

• Circularity Scotland. (2026). Deposit Return Scheme: Interim Performance Report, August 2025 to January 2026. Glasgow: Circularity Scotland Ltd.
• European Commission. (2024). Regulation on Packaging and Packaging Waste (PPWR): Final Text and Implementation Timeline. Brussels: European Commission.
• Infinitum. (2025). Annual Report 2024: Norwegian Deposit Return System Performance. Oslo: Infinitum AS.
• Eesti Pandipakend. (2025). 20 Years of Deposit Return in Estonia: Performance Review and Future Outlook. Tallinn: Eesti Pandipakend OÜ.
• Scottish Government. (2025). Deposit Return Scheme for Scotland: Retailer Guidance and Exemption Framework. Edinburgh: Scottish Government.
• USAD. (2025). Lithuanian Deposit Return System: Annual Report 2024. Vilnius: USAD.
• Zero Waste Scotland. (2025). Cross-Border Impacts of the Scottish Deposit Return Scheme: Analysis and Recommendations. Stirling: Zero Waste Scotland.
• Convenience Stores and Newsagents Association. (2025). Impact Assessment: Deposit Return Scheme Compliance Costs for Independent Retailers. Dublin: CSNA.