GreenBargains Initiative

As the UK edges closer to a national Deposit Return Scheme (DRS), attention is turning to the organisation at its heart, the Deposit Management Organisation, or DMO. This body will be responsible for implementing DRS on the ground, encompassing tasks such as collecting and redistributing deposits, coordinating logistics, refunding consumers, and ensuring regulatory compliance.

It’s a task that sits at the intersection of policy, finance, operations, and public trust, and recent experience shows just how high the stakes are.

In 2023, Scotland’s planned DMO, Circularity Scotland Ltd., entered administration before its scheme could launch. The failure served as a reminder: delivering a DRS is not just about good intentions or legislation. It’s about designing a structure capable of withstanding complexity, adapting to uncertainty, and engaging multiple stakeholders without losing public confidence.

This moment presents an opportunity to reimagine what a resilient, inclusive, and effective DMO could look like, not just for operational delivery, but for long-term public legitimacy.

The Role of the DMO, And Why It’s So Complex

A Deposit Management Organisation may appear to be a back-end operator, but its responsibilities span across multiple sectors and user groups. A typical DMO is expected to:

• Manage the collection and redistribution of deposits on beverage containers
• Coordinate reverse logistics from return points to recycling processors
• Oversee fraud prevention, reporting, and transparency measures
• Operate digital systems that interface with retailers, producers, and regulators
• Ensure compliance with environmental laws and circular economy targets

These are not small tasks, and in the UK, they’re made more complex by devolved environmental policy, differing timelines, and technical interoperability needs across regions.

Learning from Scotland: What Happened and Why It Matters

Scotland’s DRS was intended to lead the way in the UK. Circularity Scotland, the non-profit chosen to deliver it, had mobilised industry, designed operational models, and engaged with suppliers. Yet, delays, regulatory friction, and concerns about financial sustainability ultimately stalled the project.

While it’s essential not to over-attribute blame, the experience offers several key lessons:

• Start-up capital and operational liquidity need more substantial backing before full implementation.
• Governance structures must include broad, balanced representation, not just major producers or retailers.
• Policy alignment and legal clarity (especially with the UK Internal Market Act) must be resolved early to prevent gridlock.
• Public engagement and transparency must be consistent throughout the setup phase, not just at launch.

Far from being a setback, Scotland’s experience should now inform a better, more collaborative approach for the rest of the UK.

Centralisation, Accountability, and Shared Ownership

Some advocate for a single, UK-wide DMO to drive efficiency and standardisation. Others caution that overcentralization risks creating a “single point of failure,” both operationally and reputationally.

A more balanced approach is to design a DMO with the efficiency of national coordination but the resilience of distributed participation. That means:

• Ensuring governance is representative of retailers, producers, waste operators, and local communities.
• Allowing region-specific rollouts or trials within a unified system architecture
• Designing with flexibility so that local needs (e.g., return point access in rural areas) can be addressed without fracturing national standards

Four Practical Principles for Building a Trusted DMO

To avoid future breakdowns and to earn public and investor trust, these four principles should guide the UK’s DMO design:

1. Phased Rollout with Regional Testing

Launch DRS incrementally, beginning with regional pilots or phased deployment. This enables the system to test logistics, refund flows, and digital tools in real-world conditions and adjust before national scaling.

Why it matters: A controlled rollout allows early learning without risking system-wide disruptions.

2. Blended Funding and Risk-Sharing

Rather than relying solely on producer fees or pre-launch loans, consider a blended model that involves public guarantees, transitional grants, or private risk capital. This reduces pressure on early-stage operations and builds financial resilience.

Why it matters: Liquidity shocks in the early phase can undermine public trust, even if technical systems are sound.

3. Transparent, Inclusive Governance

The DMO should be overseen by a board that reflects a diversity of perspectives, including:

• Industry (large and small producers, retailers)
• Local authorities and councils
• Waste and logistics providers
• Civil society and consumer voices

Regular public reporting, stakeholder feedback loops, and conflict resolution mechanisms should be embedded.

Why it matters: Shared ownership improves legitimacy, responsiveness, and trust.

4. Future-Ready Tech Choices

Rather than committing to bespoke software systems early on, DMOs should utilize interoperable digital tools that can securely integrate with common industry platforms and evolve.

Why it matters: Flexible, modular systems can evolve in response to user needs and policy updates, thereby avoiding costly replacements.

Rebuilding Trust Through Design

The failure to launch a DMO is not just a financial issue; it also has broader implications. It risks damaging the social contract that underpins participation in circular systems. People are less likely to engage with recycling initiatives if they believe the institutions behind them are unstable or opaque. But this is also a turning point.

The UK can now design a DMO that isn’t just efficient, but durable, inclusive, and built to earn trust at every level. One that brings government, industry, civil society, and citizens into shared stewardship of the circular economy. The challenge is real, but so is the opportunity.

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