What is a deposit return scheme?
A deposit return scheme (DRS), also known as a deposit return system or container deposit scheme, is a way of incentivizing the return of drink containers for recycling – by charging a deposit when a drink is purchased, and refunding it when the container is brought back for recycling.
High-performing deposit return systems achieve collection rates of more than 90%.
In the European Union, DRS is now becoming a regulatory requirement for many beverage containers. The Packaging and Packaging Waste Regulation requires member states to set up deposit systems for beverage cans and plastic bottles by 2029, unless they qualify for an exemption by achieving an 80% collection rate by 2026 and submitting a plan to reach 90% collection by 2029.
How does a deposit return scheme work?
Deposit return systems for beverage containers work by adding a small extra deposit on top of the price of a beverage – such as those in plastic/glass bottles, cans and other kinds of packaging – which is refunded to the consumer when they return the empty drink container for recycling. Deposit return systems are typically established through legislation passed by state, provincial, or national governments.
Adding a financial value to the used container motivates people to recycle, and communicates the materials also have a value to society as a resource.
What is a deposit return scheme called?
Throughout most of the world, these programs for incentivizing drink container recycling are called a deposit return scheme or deposit return system (DRS). In the US, this type of legislation is called a "bottle bill". Throughout Australia, it is termed a container deposit scheme (CDS). Other geographies use different terms, such as beverage container return scheme in Singapore, or deposit refund schemes in Europe. Countries also translate the term into their local languages.
How do deposit schemes benefit the environment?
DRSs help combat litter, increase recycling, reduce greenhouse gas emissions, and drive a circular economy. Beverage container litter as a proportion of all litter is 54% less in regions with a deposit system than in regions without one¹. The European median collection rate for PET plastic beverage containers is 87% for deposit return systems, compared with 50% for curbside systems.² Across the US, deposit containers are captured for recycling at an average rate of 67%, compared with 25% for non-deposit containers³, with Oregon achieving return rates above 85%.⁴
Curbside recycling and DRS
These systems complement each other in fighting waste. To achieve “circularity”, manufacturers need systems that retain material quality. For food safety, bottle manufacturers have more rigorous quality specifications for recycled content than a producer of carpet or fiberglass. Producers gain food-grade material from a DRS, to achieve recycled-content commitments for new drink containers.⁵ For example, in April 2025, PET post-consumer bales collected and processed through California’s DRS had a value 88% greater than PET collected through the state’s curbside program.⁶ There are many examples where DRS and household recycling together achieve high collection rates, but none where curbside is the sole collection system.⁷ Saskatchewan, for example, achieves an 84% deposit container collection rate and a 66.3% packaging and paper product collection rate via curbside.⁸ ⁹ By separating containers, drink containers are collected without contamination from other types of waste. This means they can be recycled into new containers (rather than lower-quality uses like landfill cover), reducing reliance on raw materials to produce containers.
Which countries have the best deposit return schemes?
DRS success and performance is typically measured by the percentage of eligible containers returned for recycling. Germany today achieves a drink container return of over 98%, and Norway (considered a role model for DRS design) reaches 92%. Before its deposit return system was implemented, Lithuania achieved a 34% beverage container recycling rate through its EPR-funded curbside collection system. Once the country introduced a €0.10 deposit, the container recycling rate increased to 92% in two years.
Retailer involvement in deposit return schemes
Why does a return-to-retail model boost deposit return performance?
“Return to retail” is a DRS model in which retailers who sell eligible drinks also take back empty containers for recycling. Nine out of 10 of the world’s best-performing deposit return systems use some form of return-to-retail collection, achieving an average return rate of 92%.
The model ensures a convenient network of return locations, and makes use of existing infrastructure. This can lower set-up costs, and enables pick-up logistics. It means no extra trips are required to return containers, and makes recycling part of consumers' existing habits. For retailers, it gives consumers a reason to visit, and research has found 87% of recyclers spend their deposit refund in store.
Do all retailers participate in a deposit return scheme?
Retailers play a critical role by charging the deposit to consumers when they sell eligible drink containers. Since DRSs strive to make redeeming one’s deposit money as easy as it was to charge the deposit in the first place, retailers who sell beverages are often required to take back containers and refund deposits. Local DRS legislation sets out which retailers participate as return points for drink containers. Policymakers often make allowances for small stores (e.g. less than 100 m²) by limiting the number of containers a consumer can redeem per day, or allowing such stores to opt in to the system. In some markets, depots complement the return-to-retail network by offering an option for those returning high volumes of bottles and cans for recycling. In markets where retailers are not required to take back containers, such as New South Wales in Australia, network operators may compensate retailers to use space in their parking lots for return kiosks.
Are retailers compensated for accepting containers?
Mostly yes, and compensation varies among states and territories – but in some cases, like Oregon, Germany and the Netherlands: no. It may be specified in statute (e.g. New York), or set as a percentage of the unredeemed deposits (e.g. 25% in Michigan). In Europe, compensation in the form of a handling fee is typically set by the Central System Administrator (CSA) in ways that progressively encourage cost-efficient investments by the retailer. For example, Norway and other markets award a higher handling fee to retailers who use compacting reverse vending machines rather than manual redemption, because automation improves storage and pick-up logistics.
Economic impact of deposit return schemes
What are the economic benefits for communities?
A common finding is that deposit systems result in net savings for local communities.¹⁰ A 2025 study found that a modernized DRS in New York state, achieving a 90% return rate, would result in net savings for municipalities statewide of between US$39 million and US$109 million. Although municipalities would lose an estimated US$42 million in material revenue, this would be more than offset by savings on garbage collection, recycling collection, disposal, and litter cleanup. In addition to economic savings, deposit systems can create jobs. The 2025 New York study found that an expanded and high-performing DRS would create an estimated 1,866 additional jobs compared with 2025, including roles servicing retail reverse vending machines, operating redemption centers, collecting beverage containers, and supporting other recycling activities.¹¹
Is a deposit return scheme a tax?
A container deposit in a deposit return system is not a tax, because it is refunded in full to the consumer when they return their empty drink container for recycling. To fulfill that promise, producers, retailers, policymakers and system administrators have an obligation to provide a convenient network of redemption points that makes it easy to return containers. If container return is too cumbersome for consumers, the deposit might be perceived as an unauthorized tax or “eco-fee”. The deposit charged to consumers at purchase should be separately charged from the drink price and exempted from value-added or sales taxes on the product itself.
What happens to unclaimed deposits?
In high-performing systems, unclaimed deposits are retained by the producer-operated, non-profit Central System Administrator. Most importantly, this allows for sustainable reinvestment in the system’s redemption infrastructure, material processing and marketing to consumers.
What is the cost of purchasing return infrastructure?
Many redemption providers offer reverse vending machines (RVMs) for more efficient and convenient return of containers, compared to manual handling. RVMs range in size (from standalone machines as little as 0.6m², to through-the-wall machines with multiple storage cabinets) and capability (like number of storage areas and material types accepted). So, the choice of RVM and its cost depends on the size of redemption site and DRS container types. RVMs might be paid through the purchase, rental or leasing of the unit, and service packages. In some markets, payment is instead based on the volume of containers returned through the machines. This lets redemption providers gain the benefits of an RVM upfront and pay it off over time (known as a "throughput lease"). In most DRSs, redemption locations are paid a “handling fee” to compensate for the labor associated with container returns, space, consumables, and their monetary investment in return infrastructure. Compacting reverse vending machines can also reduce system costs by lowering storage, transport, processing, and clearing needs. Compaction reduces PET bottle volume by about 2.5:1 and aluminum can volume by about 6:1. In Norway, expanded use of compacting RVMs helped reduce transport costs by 35%, even as return rates increased.
How is the risk of “fraudulent” redemption managed?
Policymakers or Central System Administrators design systems with this in mind, putting in place protocols, governance and technology to enhance the integrity of the DRS. High-performing systems use a redemption network connected to the internet to collect and monitor data, which can be used for auditing and enforcement to prioritize responses and help ensure compliance. High-performing systems use market-specific barcodes, visual deposit markings, and electronic verification to confirm that each redeemed container belongs to the system. For containers returned through reverse vending machines, compaction helps ensure they cannot be redeemed a second time. Containers returned manually are typically sent to central counting centers for proper counting and identification. Reverse vending machines are highly sophisticated and can identify fraud attempts, rejecting containers that do not belong to the system. Smaller collection points will accept containers manually, identifying their eligibility through the visual marking.
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1 “Understanding the effects of marine debris on wildlife,” CSIRO. 2014.
2Calculated based on collection rates from Global Data, deposit system Central System Administrators, and “PET Market in Europe: State of Play,” Eunomia. 2020. Data available upon request.
3 “Beverage Market Data Analysis 2015,” Container Recycling Institute. 2017.
4 BottleBill.org 2019.
5 “The Journey to 100% rPET Bottles,” Beverage Daily. 2020.
6 “RecyclingMarkets.net lists baled PET market value data from deposit streams as 58% to 93% higher than baled PET from non-deposit streams. This refers to deposit vs non-deposit PET in the northeast USA. January-June 2020. Susan Collins of the Container Recycling Institute commented that this is higher than normal due to COVID-19 implications and deposit PET is typically 40% higher.
7 “PET Market in Europe: State of Play,” Eunomia. 2020. Data available upon request.
8 “Global Deposit Book 2020,” Reloop. 2020.
9 “2019 Annual Report,” Recycle BC. 2020.
10 "Fact Sheet: Economic Savings for Municipalities,” Reloop. 2020.
11 “Employment and Impact of Container Deposits – New York,” Eunomia. 2019.