DRS Grant and Exemption Confirmation Welcomed by the Fed

The Fed has welcomed confirmation that grants of £6,000 will be available for small independent shops which install a Reverse Vending Machine (RVM) as part of the Deposit Return Scheme (DRS) for recycling bottles and cans after the scheme launches in October 2027. The confirmation was provided by Exchange for Change, the Deposit Management Organisation (DMO), which will administer DRS and which the Fed serves through its advisory board.

The scheme will add a 20p returnable deposit to all bottles and cans sold between 150ml and 3 litres and this week’s announcement follows confirmation of the Retail Handling Fee which the Fed responded to cautiously earlier this month. The grants will be available in three annual payments of £2,000, which will be funded three months after the installation of an RVM.

Throughout preparations for the launch of DRS, the Fed has called for DRS to be revenue neutral for small shops so as to drive up participation rates by small shops and help the scheme reach its ambitious goals to boost recycling. Exchange for Change has an overall goal of improving recycling rates to 90% of bottles and cans, up from approximately 70% today, thereby driving down littering.

The announcement also included confirmation that retailers in urban areas with a retail footprint of less than 100m² will be automatically exempted from operating a return point for DRS items if they wish and can apply for an exemption if they have a floor area below 200m². Meanwhile, retailers in rural areas can also apply for an exemption if their floor space is anything up to 199 m².

However, the Fed has urged members to think carefully about applying for an exemption, as it is widely predicted that DRS will shift footfall toward shops with a DRS return point, whether that is a manual return point or RVM. It has shared a series of updates for members through the Fed website, Your Fed magazine and will be hosting a panel discussion on the topic at its annual conference in Birmingham next year.

Commenting on the new grant announcement, Hetal Patel, National President of the Federation of Independent Retailers said: “The Fed has long backed the goals of DRS but we have also called for DRS to work for small shops so our members can drive return rates. Confirmation of the grant that the Fed has lobbied for is very welcome news and a positive development after the recent announcement of what the Retail Handling Fee.”

Russell Davies, Exchange For Change CEO said: “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.”