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Ireland takes a significant step towards environmental conservation with the introduction of the Deposit Return Scheme (DRS) on 1 February 2024. Spearheaded by Minister of State Ossian Smyth, this initiative is poised to dramatically enhance Ireland’s recycling efforts and reduce littering, marking a milestone in the nation’s commitment to a circular economy.

The Circular Economy in Action

The DRS, a central element of the Programme for Government 2020, aims to transform Ireland’s approach to single-use drink containers. Minister Smyth heralded the scheme’s launch as a transformative move for both the environment and the economy. He remarked, “This scheme is a once-in-a-generation development for the Irish beverage industry,” acknowledging the collaboration and leadership of the industry in its rapid implementation.

How the Scheme Operates

The scheme operates on a simple principle: when consumers buy a drink in a plastic bottle or aluminium can carrying the Re-turn logo, they pay an additional small deposit. This deposit is 15 cents for containers from 150ml to 500ml and 25 cents for containers between 500ml and 3 litres. The deposit is fully refundable when the empty, undamaged container is returned to any participating outlet.

Deposit Return Scheme Ireland (DRSI) CLG, trading as Re-turn and appointed by Minister Smyth in July 2022, administers the scheme. CEO Ciaran Foley expressed his enthusiasm, noting:

“The introduction of Deposit Return is a proven method of increasing recycling rates.”

Practicalities and Benefits

The scheme offers over 2,000 return points nationwide, including larger retailers with automated Reverse Vending Machines (RVMs) and nearly 200 smaller retailers operating on a manual basis. Consumers can receive their deposit back either through a voucher from an RVM or as a cash refund for manual returns, provided the container is undamaged and features the Re-turn logo.

This initiative not only increases recycling rates but also reduces litter, lowers emissions, and lessens the strain on natural resources. By ensuring separate collection and recycling of these containers, the scheme guarantees high-quality recyclate material without cross-contamination.

Toward a Sustainable Future

The Deposit Return Scheme represents a significant stride towards establishing a circular economy in Ireland. It aligns with the EU’s ‘European Green Deal’ and Ireland’s own Circular Economy Strategy, set out in December 2021 and further reinforced by the Circular Economy Act 2022.

For more information on the scheme and participating outlets, visit www.re-turn.ie. The scheme not only symbolises a shift in recycling practices but also embodies a broader commitment to sustainable living and environmental stewardship in Ireland.

Is VAT charged on the deposit?

The deposit is charged at each stage of the supply chain when the drink product is supplied. There is no Value-Added Tax (VAT) on the deposit when the drink product is supplied. Businesses in a supply chain supplying Deposit Return Scheme products will not have to account for VAT on the deposit they charge. An example of such businesses are:

• producers
• wholesalers
• or
• retailers.

Under VAT law, the deposit amount will be regarded as nil when the drink product is moving through the supply chain.  A VAT liability will arise on the deposits when empty plastic bottles or cans are not returned. In this case, the operator of the scheme will be the person who is liable for the VAT due.

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