Drinks producers will not pay a producer fee during the first 15 months of the UK Deposit Return Scheme (DRS), under fee rates announced by Exchange For Change.

The industry-led organisation responsible for delivering the UK-wide scheme has confirmed that the producer fee will be set at zero pence per container when the DRS launches in October 2027.

The 0p rate will remain in place until the end of December 2028, with fees then expected to be introduced from January 2029.

Exchange For Change said the initial zero-fee period would help limit costs for businesses as the scheme gets underway.

Russell Davies, Chief Executive of Exchange For Change, said: “We recognise the breadth of work being undertaken by industry to prepare for launch in October 2027. Setting a 0p producer fee for the first 15 months of the scheme is intended to support businesses in the early stages of the scheme."

“As a not-for-profit organisation, we are committed to ensuring that producer fees always remain as low as possible, while supporting the long-term financial sustainability of the scheme.”

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What is the producer fee?

Producer fees are intended to contribute towards the cost of running the DRS.

Based on current projections, the fee is expected to rise to 0.6p per aluminium and steel container and 2.3p per PET container from January 2029. These rates are currently forecast to remain in place until December 2032.

Exchange For Change stressed that the figures are not final, with the proposed fees due to be reviewed and validated in May 2027, ahead of the DRS launch.

The fees will also be subject to annual reviews once the scheme is operational, with changes possible as more information becomes available on costs, contracts and the performance of the system.

Exchange For Change said it had developed the proposed fee structure following consultation with businesses across the drinks supply chain.

Responses were received from producers and retailers of varying sizes, with the organisation saying the feedback had helped shape both the proposed rates and the approach to setting them.

The announcement follows confirmation from Exchange For Change that a flat 20p deposit will apply to all drinks containers covered by the scheme.

Consumers will pay the deposit when purchasing an in-scope container and receive the full 20p back when the empty container is returned.

Exchange for Change has unveiled a package of support measures designed to help retailers prepare for the introduction of the Deposit Return Scheme.

The deposit management organisation said the support arrangements, developed in collaboration with regulators in England, Scotland and Northern Ireland, aim to give retailers flexibility in deciding how they take part in the DRS.

Current regulations already exempt urban retailers with a retail footprint below 100 square metres from the requirement to provide a return point for eligible drinks containers. Exchange for Change has now confirmed that exemption eligibility will be widened.

Urban stores with sales areas between 100 and 199 square metres will be able to apply for size-related exemptions, while rural retailers with less than 200 square metres of selling space will also have access to the same route.

Further exemption criteria will cover circumstances such as being located close to another return point, operating from listed or heritage properties, having restricted site access, or lacking the utilities needed to support return infrastructure.

Russell Davies, Chief Executive of Exchange for Change, commented: “Retailers will play a fundamental role in transforming how we increase recycling and reduce litter in every corner of the UK through the Deposit Return Scheme.

“This package of support has been developed following extensive consultation with industry and intended to help retailers of different sizes make the best choice for their business, whether that’s installing an RVM or applying for an exemption.”

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Grants to Hit 10,000 Small Retailers

Along with the revised exemption arrangements, Exchange for Change announced a £60 million grant programme to assist smaller retailers with the installation of reverse vending machines.

The funding pot is expected to benefit as many as 10,000 independent stores across England, Scotland and Northern Ireland.

Eligible retailers will be able to claim grants worth £6,000 for each participating site, with the money distributed in three annual payments of £2,000.

According to Exchange for Change, each payment will be issued three months after an RVM has been installed.

The grants are designed to offset the initial costs associated with introducing reverse vending technology and will sit alongside the Return Handling Fee (RHF) available to participating retailers.

Earlier this month, Exchange for Change confirmed the RHF rates that will apply once the DRS is operational. Manual return points will receive 3p for every eligible container collected.

Retailers using reverse vending machines will receive payments based on annual volumes.

A fee of 5p per container will apply to the first 225,000 eligible containers processed each year, with returns above that level attracting a payment of 1.3p per container.

Exchange for Change has announced the return handling fees (RHFs) that retailers will receive for collecting beverage containers under the UK’s forthcoming Deposit Return Scheme (DRS).

According to the scheme administrator, the fee model was developed through a six-month process involving industry consultation, stakeholder engagement, and detailed technical assessment with retailers, producers, and trade organisations.

The RHF is designed to reimburse retailers for the costs incurred when accepting empty drinks containers returned by consumers through the DRS.

These payments are intended to offset expenses such as purchasing collection equipment, storing returned containers, training employees, and allocating retail space to support the scheme when it launches across England, Scotland, and Northern Ireland in October 2027.

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Tiered Payment Structure Introduced

Exchange for Change confirmed that retailers operating manual return points will receive 3p for every eligible container returned.

Businesses using reverse vending machines (RVMs) will be compensated through a tiered fee structure.

Automatic return points will earn 5p per container on the first 225,000 eligible items collected each year. Any returns above that volume will attract a reduced fee of 1.3p per container.

The organisation explained that the payment framework was created to accommodate the wide range of retail formats across the UK, recognising that operating costs and collection volumes differ significantly between small stores and larger retailers.

Russell Davies, CEO of Exchange for Change, commented: “The UK’s retail landscape is unique in the world, spanning large supermarket chains, medium-sized franchises and a very high ratio of small and independent convenience stores compared to other nations.

“This means the network of return points across the UK will be extensive, and the nature of collections will range from small convenience stores manually collecting and returning a small amount of containers, through to large multinational supermarket chains operating multiple reverse vending machines that collect several thousand containers each week at every store.”

Davies added that the fee model has been designed to reflect these differences and provide an equitable approach for retailers of all sizes.

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Financial Framework for the Deposit Return Scheme

The announcement provides additional clarity on the funding structure of the DRS. It follows recent confirmation that consumers will pay a standard 20 pence deposit on all eligible drinks containers and that the scheme will operate under the Exchange for Change brand.

Exchange for Change also stated that the RHF levels will be reviewed before the scheme becomes operational and reassessed annually thereafter.

Future evaluations will use real operational data gathered through the DRS, allowing assumptions and cost calculations to be adjusted as more evidence becomes available.

The organisation believes this process will help ensure the fee structure remains appropriate and responsive to the experiences of producers, retailers, and scheme operators.

Exchange for Change has announced that a fixed 20p deposit will apply to all eligible drinks containers under the UK’s upcoming Deposit Return Scheme (DRS).

The organisation, which is overseeing delivery of the scheme across England, Scotland and Northern Ireland, confirmed that the charge will cover single-use containers made from PET plastic, aluminium and steel. Containers between 150ml and three litres will fall within scope.

Consumers will pay the deposit when purchasing drinks and will receive the full amount back upon returning the empty container.

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Decision Made with Industry Input

The chosen deposit level follows a lengthy consultation process involving businesses across the supply chain, alongside a review of how similar schemes operate internationally.

According to Exchange for Change, various pricing models and deposit levels were assessed to strike a balance between encouraging consumer participation and ensuring the system remains workable for producers and retailers.

Russell Davies, Chief Executive of Exchange for Change said: “The deposit value is a pivotal part of how the deposit return scheme will work in practice.

“That’s why we’ve engaged widely with industry, and undertaken extensive market research and in-depth analysis on how schemes work in other countries.”

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Why Was 20p Selected?

Analysis carried out during the consultation explored how consumers respond to deposits ranging from 10p to 30p.

The findings indicated that lower deposits, particularly below 15p, are unlikely to provide enough incentive to meet the scheme’s target of achieving a 90% return rate within three years.

At the other end of the scale, a 30p charge was considered potentially too costly for consumers at the point of purchase.

Alternative approaches, such as variable deposits based on container size or material, were also reviewed but ultimately not taken forward.

Davies explained that a flat-rate model at 20p represents the most balanced and sustainable option for the UK market.

He added: “Confirming this now, with just under 18 months to go until the DRS is live, will help producers and retailers with their planning and preparation for the scheme, and we will continue to support them closely throughout this process.”

Exchange for Change has said it will continue working closely with producers and retailers to support implementation.

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View our previous Deposit Return Scheme stories here:

'Exchange for Change Publishes Updated DRS Material Guidance [22.04.26]'

'Deposit Return Scheme Announces Exemptions for Small Retailers [13.04.26]'

'Exchange for Change Standards for DRS Branding [24.02.26]'

Exchange for Change has issued updated guidance outlining material specifications for the upcoming Deposit Return Scheme (DRS).

Russell Davies, CEO of Exchange for Change, commented: “The publication of our material specification is a milestone in providing producers with the clarity they need to prepare for the Deposit Return Scheme.

“It sets out in practical terms how packaging should be labelled so it can work effectively within the system from day one.

“Our focus is on making sure businesses have the time, certainty and support they need.”

The publication forms part of wider efforts to support industry readiness before the planned launch in October 2027, with further updates and engagement opportunities expected as development continues.

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Key Elements of the Guidance

The specification covers several core areas, including:

• Materials that fall within scope
• Eligible container sizes
• Labelling and barcode standards
• Requirements for product registration and testing

It confirms that the scheme will apply to drinks containers used for water, soft drinks, and alcoholic beverages intended for human consumption. Eligible containers must hold between 150ml and 3 litres.

Only containers made predominantly from PET plastic, aluminium, or steel will be included.

The guidance also highlights potential issues with certain container designs. Non-cylindrical or top-heavy shapes may cause problems in reverse vending machines (RVMs), meaning they could require additional testing. Producers may be contacted if their products fall into this category.

Compaction standards are also specified:

• PET bottles must achieve at least 55% compaction
• Aluminium and steel cans must reach a minimum of 75%

Producers are required to register all existing products with Exchange for Change at least 12 weeks before the scheme goes live on 1 October 2027. This sets a registration deadline of 9 July 2027.

To support smaller businesses, the document also introduces a low-volume exemption aimed at reducing regulatory burden.

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Deposit Return Scheme (DRS)

The UK’s Deposit Return Scheme is scheduled to begin in October 2027.

Under the rules, all participants in the drinks supply chain – including producers, importers, wholesalers, and retailers – must apply a deposit to in-scope products. These items will also need to carry approved DRS labelling.

Products included in the scheme will be excluded from extended producer responsibility for packaging (pEPR), preventing duplication of obligations.

Exchange for Change is the not-for-profit organisation responsible for designing and implementing the DRS across England, Scotland, and Northern Ireland.

Its responsibilities include setting deposit levels, meeting collection targets, and providing guidance to businesses and consumers.

Exchange For Change has introduced details of an exemptions policy relating to reverse vending machines (RVMs) as part of the UK’s Deposit Return Scheme (DRS).

Under the proposed rules, shops in urban locations with a retail footprint smaller than 100 square metres will automatically be excused from the requirement to provide a return point. These businesses will not need to submit an application for exemption, though they may still choose to install a return facility if they wish.

Exchange For Change explained: “The Deposit Return Scheme is designed to ensure a comprehensive and accessible network of return points across the UK.

“At the same time, we recognise that a uniform approach would place disproportionate burdens on some retailers without necessarily enhancing scheme accessibility or improving return rates.

“The exemptions framework is therefore intended to balance accessibility for consumers with operational practicality for businesses.”

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Further Exemption Criteria in Development

In addition to the automatic exemption for the smallest urban stores, Exchange For Change is working on broader eligibility criteria that would allow other retailers to request exemptions.

Factors likely to be considered include how close a shop is to alternative return locations and whether installing an RVM is practical. This may involve assessing available space, store layout, potential health or hygiene concerns, building restrictions (including heritage considerations), and access to necessary utilities.

Current proposals suggest that urban shops with floor space between 100m² and 199m², as well as rural retailers under 200m², could qualify for exemptions if they can demonstrate such constraints.
Any approvals would depend on maintaining sufficient return point coverage in the surrounding area and would require sign-off from Exchange for Change.

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Financial Support for Smaller Stores

The organisation has also announced plans to offer financial assistance to retailers that are still required to operate return points.

This support will focus on smaller independent shops where installing an RVM is considered the most suitable option based on expected usage.

The proposed funding amounts to £6,000 per location, paid over three years in annual instalments of £2,000.

To fund the initiative, Exchange for Change intends to set aside £60 million during the first three years of the scheme. This funding will be provided in addition to the standard Return Handling Fee.

According to the scheme administrator, the grants are designed to help offset the upfront cost of installing RVMs, make participation more viable for small businesses, and ensure return points are evenly distributed.

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View our previous Exchange For Change story here: 'Exchange For Change Standards for DRS Branding [24.02.2026]'