Why are countries all around the world implementing Deposit Refund Schemes?

Why are countries all around the world implementing Deposit Refund Schemes?
| 3 Min read

Deposit Refund Scheme is not a novel concept. Late in 1971, Oregon charged a 5 cents’ deposit for every bottle bill. But slowly, this practice became extinct, and due to the increasing population, littering has become a habit. 

The deposit refund scheme retook its shape in recent times, but this time with a technology-enabled system. Many countries implemented deposit refund systems into their policies with over 90% return rate. Still, their importance is not known to many. 

So, before we talk about countries that implemented deposit refund systems, let’s understand about deposit refund systems and the importance of implementing them. 

What is the Deposit Refund System?

A Deposit Refund System or DRS is a simple incentive system that encourages consumers to bring back their waste (plastic packaging or e-waste) for a refundable deposit collected at the time of purchase.

When a consumer purchases a bottle, he is charged a deposit over MRP. On  returning the bottle back, he receives the deposit as a refund. This initiative promotes consumer awareness while providing a solution for non-littering and waste in landfills.

What challenges can DRS solve? 

  • DRS reduces the cost of material recovery and acquiring packaging to fulfill Extended Producer Responsibility targets.

  • As DRS focuses on collecting the uncontaminated material, it increases the quality of the material segregated for recycling.

  • Creates awareness among consumers and adds value to waste. People who litter now get motivated to deposit them for a refund.

How popular is the Deposit Refund Scheme world-wide? 

The deposit refund system has been implemented in around 45 countries. Witnessing the positive results, many regions have been practicing it throughout the years.

  • Countries like Germany, Denmark, Estonia, Finland, Croatia, Norway, Sweden, Switzerland, Hungary, and the Czech Republic have implemented DRS. 

  • In northern European countries, the deposit refund system has been an excellent practice for at least a decade.

  • The most successful example in Europe is Norway, with an impressive recycling rate of 97% for plastic bottles. 

  • Germany also has high results, with a 98.4% return on plastic, glass and aluminum. 

  • The least successful country is Estonia, with a reasonable 82.7% return rate including can, PET and glass – which is already higher than many European countries.

Because of the growing concern about climate change and promoting circular economy around the world, many countries are enacting laws restricting the use and production of plastic. 

In this case, the deposit refund system has proven to be the best solution to recover plastic waste, reduces the cost for companies to acquire packaging to fulfill EPR targets, and instill a sense of responsibility in consumers to deposit recyclables. More and more countries are taking steps to implement DRS in their policies. 

Has the Deposit Refund Scheme been implemented in India?

Recykal implemented a deposit refund system in Kedarnath in collaboration with the Uttarakhand government. The project was implemented in two phases from Guptkashi to Kedarnath temple keeping in mind the littering caused by pilgrims along the trek and in the town of Kedarnath. 

Read “Sabka sath swachh kedarnath” to know more about India’s first digital deposit refund system. 

  • Recykal DRS implementation at Deoria Taal Vikas Mahotsav was successful, where 1000 QR code stickers were distributed to all stall owners, and 670 used bottles were deposited at the deposit centre.

  • Recykal deposit refund system is not just for plastic waste, the DRS implemented in Dr Reddy’s laboratories encouraged all employees to deposit their E-waste at the collection centres installed on the campus, and the implementation was successful.

DRS leverages technology at all levels and enables end-to-end traceability and efficiency of material and money flows. Witnessing its huge potential, many states in India have partnered with Recykal to implement the same. 

Would you like to implement Recykal’s Deposit Refund System in your state? Talk to us. 

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