UK aluminium industry to witness production shortfall and plant closures if flat rate deposit return scheme is adopted

The prosperous aluminium industry in the United Kingdom may see a shortfall in annual production by about 4.7 billion units and also the plant closures if a flat rate deposit return scheme (DRS) is adopted, according to Aluminium Packaging Recycling Organisation’s (Alupro) analysis on the implications of a poorly designed national scheme.

Alupro has reportedly launched a report today, on January 27, analysing the environmental and economic effects of a flat rate scheme versus a variable rate deposit fee. The report has been developed in partnership with independent think-tank London Economics, alongside experts from across the UK packaging sector.

The long-awaited DRS scheme is expected to come into effect in 2023, aiming at tackling plastic pollution, increasing recycling rates, improving recyclate quality and minimising litter. The scheme will see a deposit value added to the price of a beverage product in store, which will be refunded to the customer when empty packaging is returned to a designated collection point.

While a variable fee could be charged for containers allocated with a deposit value based on container size, a flat rate model would apply a fixed fee to all beverage containers. This may result in customers paying an additional £4.80 for a 24-can multipack (on top of product purchase price) compared to just 80p for a 2 litre plastic bottle. Research suggests the consequence could be an immediate surge in demand for less sustainable plastic alternatives and drop in aluminium can consumptions.

Besides, shoppers could opt for large bulk containers, resulting in increase in portion sizes and unnecessary hike in product waste.

Rick Hindley, executive director at Alupro, commented: “While we are fully supportive of a well-designed DRS, research surrounding best practice design is limited. Our report aims to fill the gap and provide extensive modelling into the real-world implications of differing deposit fee options.”

He added, “While some may think that a flat rate deposit fee would be easier to implement, this isn’t necessarily the case. What’s more, it would result in a whole host of negative implications – a number of which the scheme is fundamentally trying to solve. Our concern is that simplicity will override sustainability in senior-level decision making. As such, we are imploring the government to take our statistics and modelling into close consideration when discussing the design of the UK’s DRS.”