Deposit Return Scheme: Financing reverse vending infrastructure

As the UK prepares for its DRS launch in October 2027, Kathryn Vassilissin, Vendor Finance, Siemens Financial Services UK, explores the implications, from ‘reverse vending’ infrastructure and retailer readiness to the financing models that could support rollout.

After a stuttering start, the UK’s Deposit Return Scheme (DRS) is now moving from policy to implementation. Once the scheme is in force, businesses across the drinks value chain will need to help consumers return in-scope containers efficiently. Central to making it work at scale will be automated collection infrastructure, i.e. reverse vending machines. This must be implemented without creating an excessive upfront capital burden on retailers, suppliers and manufacturers.

The Deposit Return Scheme in brief

The aim of the DRS is for billions more plastic bottles to be recycled each year. From 1 October 2027, consumers will pay a refundable deposit of 20p on single-use drink containers and receive it back when they return the empty container to a collection point.

In England, Northern Ireland and Scotland, the scheme will cover PET plastic bottles, and steel and aluminium cans, between 150ml and 3 litres. In Wales, glass will also be included, though with a phased transition over 2027-2031.[1]

The shift involved in this is immense. Consumers must acclimatise to paying a deposit and returning containers. Grocery retailers will need to operate manual or automated collection points unless they qualify for an exemption, based on size and location. Drinks producers must register products and meet barcode requirements. Vending machine operators and hospitality businesses must understand sales and return requirements. And equipment vendors must move quickly to grasp the business opportunity. Each party has a role in ensuring that compliant return points are available where containers are sold and consumed.

With regard to vending machines, the Department for Environment Food and Rural Affairs has confirmed that drinks sold through vending machines will be subject to the DRS where they fall within scope, although the machines themselves will not be required to operate as return points. [2]

This creates new commercial opportunities. Vending machine operators could consider offering nearby or integrated container collection facilities that improve convenience for consumers. Equipment suppliers and reverse vending providers can target sites where DRS-compliant beverages are sold but returns points are not currently available.

KEY DATES

Q3 2026 Producer and retailer registration opens in England, Scotland and Northern Ireland

1 October 2027 Deposit Return Scheme (DRS) goes live

October 2027 to October 2031 Glass transition period in Wales

Normalising container collection

Through this shift, the DRS is expected to reduce litter, improve recycling rates and promote a circular economy. Each year, consumers in England, Northern Ireland and Scotland buy an estimated 30 billion single-use drinks containers, and 6.5 billion single-use drinks bottles and cans go to waste rather than recycling.[3]

Exchange for Change, the deposit management organisation delivering the scheme in England, Scotland and Northern Ireland, is targeting 70% of in-scope containers to be returned in year one, 80% in year two, and 90% thereafter.[4] That would see billions more containers recycled each year.

Experience from elsewhere suggests these targets are feasible, with mature schemes showing a normalisation of reverse vending among consumers and retailers. Europe’s existing schemes have an average 87% beverage container return rate.[5]

Reverse vending: The key to success

The backbone of a successful DRS in the UK is likely to be its reverse vending infrastructure – as is the case in countries with high return rates, such as Germany, Norway and Finland.

Norway introduced its deposit return scheme for single-use beverage containers in 1999[6] and has become a world leader in recycling, achieving a 98% total collection rate in 2025, according to Infinitum, the operator of Norway’s deposit system.^[7]  Though manual collection points significantly outnumber automated return locations, the latter account for 94% of returned containers.^[8]

Germany was another early mover, introducing its scheme in 2003. It too has one of the highest return rates globally, at 98%.^[9] Reverse vending machines are central to the system, with 90% of returns now automated.^[10]

Reverse vending machines do much of the operational ‘heavy lifting’ of a DRS, enabling fast and convenient consumer returns and providing barcode and container recognition, fraud prevention, integration with DRS systems, and data management.

To access these benefits, retailers, hospitality businesses and vendors must get to grips with the practicalities of reverse vending machine deployment across the UK, including machine procurement and installation, enclosure and signage, connectivity, servicing and maintenance, and financing.

Clarifying reverse vending criteria

Over 2025-26, progress on the detail of the DRS and its reverse vending infrastructure has accelerated:

• The publication of technical and performance specifications for reverse vending machines in October 2025[11], followed by material specs in 2026[12], gave businesses the green light to move forward on planning, development and procurement of reverse vending machines.

• Confirmation in April 2026 of a flat rate 20p deposit provided further clarity over how the DRS will work in practice.[13]

• Also in April 2026, the UK government amended planning regulations to allow retailers to install reverse vending machines without requiring full planning permission, as long as they meet conditions on size, placement and location.[14] Scotland has equivalent – though not identical – permitted development rights.

For businesses, this clarity is welcome, but it’s also bringing home to them the financial realities of reverse vending machine deployment.

Doing the sums

In 2024, the government estimated a capital cost of £14,000 for a reverse vending machine for bottles and cans in a small convenience store; for a large supermarket installing a reverse vending machine with four in-feeds, the cost would be £84,000, plus £70,000 housing costs for an outdoor machine.[15] Overall, the government estimated businesses in England and Northern Ireland alone would face a capital spend of £0.7 billion on reverse vending machines and £0.6 billion on logistics.[16]

These equipment costs are not the end of it. Firstly, there are continuing costs associated with software, servicing and maintenance. Secondly, the demands on management time, as well as on capital, are considerable. Exchange for Change has provided the framework for deployment but businesses must deliver it, fund it and operate it.

Fees & funding: Implementation support

Support is available. Return handling fees paid to return point operators will help to offset the costs of collection equipment. Where equipment is financed, those payments may also help offset monthly financing costs, reducing the upfront burden of DRS participation.

Tiered fees for reverse vending machines have been set at 5p per container (3p for manual return points) for up to 225,000 in-scope items returned annually, with 1.3p per container above that.[17]

In addition, Exchange for Change is exploring a more flexible exemptions framework for retailers with under 200m² of sales area, and it has announced £60 million in grant funding to help up to 10,000 small independent retailers meet the cost of reverse vending machines.[18] However, the maximum grant is £6,000 and will be phased over three years following installation.[19]

With outright purchase of reverse vending machines unrealistic for most businesses (regardless of size), they need more support upfront, especially when the DRS is just one of several regulatory changes competing for operational attention and capital budgets.

Many of the organisations affected by the DRS are already navigating Extended Producer Responsibility for packaging, the UK government’s Simpler Recycling reforms, the energy drinks ban for young people under 16, and in Scotland, proposals for a single-use cup charge.

Smart & integrated finance for affordable rollout

Nonetheless, it is important not to overlook that DRS is a once-in-a generation infrastructure roll-out in the UK. Yes, it’s challenging, but early planning enables smoother roll-out and competitive advantage.

For many businesses, the key challenge is not only the need for reverse vending machines infrastructure, but how to fit investment into already stretched capital budgets. This is where flexible, tailored finance from a specialist provider becomes a strategic enabler, allowing organisations to move forward with deployment while preserving working capital and maintaining operational flexibility.

For example, for a retailer, a specialist finance solution for reverse vending machines could convert the upfront capital cost of rolling out the DRS into predictable monthly payments – preserving working capital and supporting affordable phased deployment.

The finance arrangement could cover the hardware, installation and associated infrastructure, enabling phased multi-site rollout and staged payments that align with expected returns volumes, handling-fee income and wider business cashflow requirements. 

Thanks to the handling fee paid on each eligible container returned, a reverse vending machine can effectively generate income from the volume of containers processed. Where return volumes are strong, handling fee revenues could offset much of the monthly financing cost, making deployment cost-neutral or even cashflow-positive.

Elsewhere in the value chain, financing can become a competitive differentiator for vendors of reverse vending machines. Vendors that can offer equipment, installation, servicing and financing through a single proposition may be better positioned to capture demand as rollout accelerates.

Specialist finance providers can tailor these arrangements to individual customers, and also support them with technology expertise, drawing on experience from successful DRS schemes around the world.

An infrastructure challenge

The UK’s Deposit Return Scheme is often discussed as an environmental policy, but its success will depend equally on infrastructure delivery. The businesses best prepared for October 2027 will be those that begin planning now, looking at investment support, supplier partnerships and procurement as part of their readiness strategy. In this context, finance is not simply a way to pay for equipment. It is a tool that can accelerate deployment, preserve capital and help turn DRS ambitions into operational reality.

As well as being an opportunity in its own right, the creation of the reverse vending infrastructure is a new test case for suppliers and retailers. As future sustainability infrastructure programmes emerge, the lessons learned from financing reverse vending may prove just as important as the technology itself.

Note about the author: Kathryn Vassilissin is Sales Manager for the vendor channel at Siemens Financial Services UK. She has over 20 years of experience in sales, account management and vendor finance, including 11 years at SFS UK. Connect with Kathryn on LinkedIn

Notes:

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[1] Clarity, Wales Given Approval to Include Glass in Deposit Return Scheme https://clarity.eco/news/wales-given-approval-to-include-glass-in-deposit-return-scheme/ (accessed 21 August 2026)

[2] AVA: The Vending & Automated Retail Association, Newsletter: The Policy Edit, 15 July 2026 https://mailchi.mp/340628431dbe/help-us-stop-the-blanket-ban-across-all-vending-5857181?e=b7cb8dc594

[3] GOV.UK, Government to clean up communities with deposit return scheme for plastic bottles and cans, 27 January 2025 https://www.gov.uk/government/news/government-to-clean-up-communities-with-deposit-return-scheme-for-plastic-bottles-and-cans

[4] Ecosurety, The Deposit Return Scheme in the UK explained, 30 April 2026 https://hub.ecosurety.com/article/5wwvy3s8mGsdGX7ir2oODI

[5] Reloop, Global Deposit Book 2025 https://www.reloopplatform.org/global-deposit-book/

[6] TOMRA, Norway’s deposit return scheme is world’s recycling role model, 15 October 2024 https://www.tomra.com/reverse-vending/media-center/feature-articles/norway-deposit-return-scheme

[7] Infinitum, Facts and figures, https://infinitum.no/en/the-deposit-system/facts-and-figures/ accessed 11 August 2026

[8] Reloop, Global Deposit Book: An Overview of Deposit Return Systems for Single-Use Beverage Containers 2024, https://www.reloopplatform.org/wp-content/uploads/2024/12/Reloop-Global-Deposit-Book-2024.pdf

[9] ibid

[10] ibid

[11] Exchange for Change, RVM Specifications: DEPOSIT RETURN SCHEME https://www.exchangeforchange.co.uk/wp-content/uploads/2025/10/UK-DMO-RVM-Specification.pdf accessed 11 August 2026

[12] Exchange for Change, Deposit Return Scheme (DRS) Material Specification, April 2026  https://exchangeforchange.co.uk/wp-content/uploads/2026/04/Exchange-for-Change-Material-Specification-FINAL-v5-April-2026.pdf

[13] Exchange for Change, Newsletter #11, April 2026 – https://exchangeforchange.co.uk/news/newsletter-11-april/

[14] letsrecycle.com, New rules to allow reverse vending machine installation to be fast-tracked, 24 March 2026 https://www.letsrecycle.com/news/new-rules-to-allow-reverse-vending-machine-installation-to-be-fast-tracked/

Legislation.gov.uk, The Town and Country Planning (General Permitted Development etc.) (England) (Amendment) Order 2026 https://www.legislation.gov.uk/uksi/2026/313/made

[15] Legislation.gov.uk, Introducing a Deposit Return Scheme on beverage containers in England and Northern Ireland, 25 November 2024 https://www.legislation.gov.uk/ukia/2024/167/pdfs/ukia_20240167_en.pdf

[16] Regulatory Policy Committee, Introducing a Deposit Return Scheme on beverage containers in England and Northern Ireland, 11 September 2024 https://assets.publishing.service.gov.uk/media/6747342b77462f7809147501/RPC_Opinion_-_The_Deposit_Return_Scheme_for_Drinks_Containers__England_and_Northern_Ireland__Regulations_2024.pdf

[17] Exchange for Change, Exchange For Change Announces Deposit Return Scheme Return Handling Fee

https://exchangeforchange.co.uk/news/exchange-for-change-announces-deposit-return-scheme-return-handling-fee/ accessed 11 August 2026

[18] Exchange for Change, Exchange For Change Announces DRS Support for Retailers – https://exchangeforchange.co.uk/news/exchange-for-change-announces-drs-support-for-retailers/ accessed 11 August 2026

[19] ibid