Examples of Deposit Return Schemes (Questions 40 to 48)
In this section we set out four example models for how a deposit return scheme could operate, showing how the system components outlined in the previous section could be combined to create a functioning scheme. More detail is provided on this in the Outline Business Case ( OBC).
These four models have been chosen to illustrate common features of models used in other countries and to present different options for return locations and materials; two of the components likely to be of most interest to stakeholders and the public.
We have made a qualitative assessment of each of the models against the wider social and economic objective we have set for establishing a deposit return scheme. This allows us to test the extent to which each of the models meets the policy objectives that we have established. This was done through a 'weighting and scoring approach' which considered four measures:
- Ensuring fairness for all demographic groups
- Maximising accessibility for all demographic groups
- Creating employment opportunities for socially disadvantaged groups
- Creating opportunities to raise funds for charitable causes
A representative stakeholder group was asked to score which of the criteria should have the most weight, i.e. which would make the most overall difference to the success of the scheme. System accessibility and fairness were considered the most important factors. Each of the measures was then scored. This allows us to compare how well the different systems do.
We have also calculated a 'net present value' or ( NPV) for each example. The NPV is a measure of what we think the economic impact would be. An expanded explanation of the NPV modelling is being published alongside this consultation paper in the accompanying OBC. This should be looked at with the score the example gets for the wider policy objectives. All the numbers in this section are compared to the situation where we don't introduce a deposit return scheme called 'the base case'.
The Base Case used for the NPV Calculations
HM Treasury guidance is clear that a base case should reflect the world as it would be without the intervention under consideration, not just the world as it is now. Therefore, the base case against which the NPVs has been calculated takes into account the adoption, in June 2018, of the EU Circular Economy Package. This introduces more ambitious recycling targets for packaging materials and a requirement for 100% cost recovery of recycling costs from producers. Where the tables show savings for industry they are reflecting the relative efficiency of a deposit return system as a mechanism for satisfying these requirements.
This avoided cost (compared with a position where a deposit return system is not available to satisfy these requirements) is noted as a benefit for producers in the NPV calculations.
Example 0 - No scheme is introduced
This is the do minimum example which will enable the assessment of the impact of a deposit return scheme. It is assumed that there are no changes beyond those introduced by the circular economy.