Why Wales’ DRS has become a political hot potato

Having made headline news in Scotland for months prior to the collapse of its “pioneering” scheme in 2023, Wales is the latest country to be engulfed in a political row over the deposit return scheme (DRS), with the food and drink industry at the centre.

The refusal of the Welsh government to play ball with the UK over a planned October 2027 DRS rollout, already seen as wildly ambitious by many in the industry, is wreaking havoc with Defra’s scheme.

While the UK government is, on the surface, insistent the timetable is on track across the other nations, behind the scenes enormous pressure is growing for a further delay. And with its own elections due to take place next year, many believe a scheme in Wales might not be operational until 2029 or even later.

Even by the standards of DRS, the latest situation is hard to believe. 

The growing DRS crisis

Once Labour had triumphed in the general election, it was widely thought the new UK government would be in a prime position to cajole its fellow Labour administration across the border to fall in line on DRS, despite the long-running disagreement over how the scheme should operate.

However, with Wales including glass in its scheme and remaining vehement in its insistence that the rollout must not prejudice the country’s “world-leading” position in recycling, the UK government has so far been unable to bring them on board.

Cynics suggest the situation might have as much to do with the Welsh government wanting to differentiate itself to its left-leaning voters from Keir Starmer’s floundering administration, as it does with the intricacies of DRS.

But the results of the split are having a huge impact on the rollout across the UK, as DRS finds itself at the heart of a growing crisis faced by Labour on the impact of its regulation on business costs and consumer prices. 

Last week, despite insisting its plans did not represent a “breakaway” because the “schemes were and are legally separate”, the Welsh government contacted industry figures and other groups calling for them to attend a DRS conference at the seaside resort of Llandudno in March to discuss more details of its proposals, with an official consultation on its plans due to launch in the summer.

By then the UK government is due to have appointed a deposit management organisation (DMO) to run the scheme in England, after a solitary bid by soft drinks companies and supermarket bosses was submitted two weeks ago. It is likely to be rubber-stamped by Defra in April.

However, that masks the fact the would-be board members of the DMO disagree fundamentally over the practicality of a 2027 start date, with supermarket bosses continuing to argue it is “impossible”.

Retailers say the Welsh government has made it clear it has no intention or “returning to the fold”, which poses a gigantic headache for how a DRS scheme would work between the border of England and Wales. It also adds yet more cost, at a time when the burden of environmental regulation is already dominating the agenda.

It’s hardly the dream start for the DMO, with industry and politicians desperate for it to avoid the infighting and eventual collapse that hit the ill-fated Circularity Scotland.

Wales’ recycling record

Meanwhile, Wales is also facing questions over the extent to which its recycling record justifies its reluctance to climb on board the UK scheme.

The Grocer reported last week that while it is second in the world for items collected, Wales ranks 13th for materials “separated for recycling”, with only 33% of household plastic, including soft drinks bottles, actually recycled. 

Vast quantities of plastic are, rather than being turned back into food-grade plastic, being turned into bags for life, refuse sacks and LDPE pellets. 

Sources have contrasted the figures to those of the Republic of Ireland, where, just one year since the launch of its DRS, 88% of bottles collected through the scheme are being recycled back into plastic bottles.

Claims that Wales’ track record is not as good as it suggests have attracted a strong defence from the Welsh government, which reiterated its claim that it did not so much leave the UK scheme, as it left them.

“Wales has not left a UK scheme, the schemes were and are legally separate and we continue to follow the same policy we consulted upon,” a spokesman says. 

“We continue to work on a four-nation basis – focused on joint working throughout the development of the scheme.”

The spokesman adds that the range of plastic packaging used by food and drink manufacturers makes it “challenging” to recycle plastic back into reusable food-grade packaging. “We are working with the food and drink industry to ensure the packaging they use can be recycled back into new food-grade packaging.

“We have played our part by supporting most of our local authorities to collect plastic packaging separately from other packaging materials that could contaminate it – making it easier for it to go back into food-grade applications.”

However, the extent to which the Welsh government works with retailers and suppliers – and the UK government – to make it easier to rescue a joined-up approach to DRS is another matter.

If there is no breakthrough soon, the repercussions for the already troubled DRS scheme look set to be huge.