Deposit Return Schemes: Germany

Deposit return schemes, a circular-economy policy tool, incentivizes consumers with a monetary reward to return their glass and plastic bottles to retail stores, where they are collected and recycled.

Overview

A deposit return scheme, or DRS, incentivizes consumers to return their glass and plastic bottles to retail stores, where they are collected and recycled. An additional fee is added to the retail sale of bottled drinks, and the consumer can recover that fee when the empty bottle is returned to a collection point.

Germany became the first European country to initiate a DRS scheme in 2003, adding a deposit of up to €0.25 ($0.27) at the cash register for each bottle purchased. A successful DRS policy must offer enough of a monetary reward for it to be worthwhile to return the bottle, and it must be convenient for consumers to participate by offering well-distributed, accessible collection points.

Impact

Over the past 20 years, Germany’s DRS has become the most successful in the world. It achieved a 94% PET (polyethylene terephthalate) bottle recycling rate in 2019 thanks to take-back mandates for all retailers and sufficiently high incentives for consumers to return their containers. In addition to a DRS, the country also enforces extended producer responsibility to improve recycling rates. Together, these policies helped Germany reach a recycling rate of 67.9% for all packaging in 2021.

Consumers in Germany are rewarded differently for returning single-use and reusable containers, with a €0.25 ($0.27) rate for all single-use plastics bottles, aluminum cans and glass bottles. Reusable bottles carry a lower rate of €0.15 per plastic bottle and €0.08 per glass bottle. The disparity is used to incentivize higher return and recycling rates for single-use bottles and a higher reuse rate for resealable containers. Fee discrepancy has worked as planned, with plastic bottles and aluminum cans experiencing the highest return rates of accepted containers. All retailers are required to take back containers, making it extremely convenient for consumers to participate.

By contrast, in California, retailers are not required to take back bottles, and deposit incentives are much lower, ranging from $0.05-$0.10. In this case, returning bottles is neither worthwhile nor convenient to consumers, resulting in a lower statewide bottle recycling rate of 59%.

Opportunity

Deposit return schemes both divert waste from landfills and increase recycled plastic feedstock, which increases the availability of recycled materials to be used by brand owners for a variety of products. In a 2015 study, it was estimated that nearly 50% of recycled PET in Germany was repurposed for plastic sheets, films and textile fibers, while just 34% was allocated for new PET bottles.

However, it is a better practice to primarily allocate recycled PET to the packaging industry. PET can be mechanically recycled many times into new bottles, but redirecting recycled plastic to other industries, such as clothing and other textiles, can increase the demand for virgin PET for new plastic bottles. Maximizing the supply of recycled PET for packaging is a much more efficient way to contribute to the circular economy and minimize plastic waste.

Policymakers could expand the scope of DRS programs to other types of plastic packaging. HDPE, or high-density polyethylene, is a thicker material than PET and is commonly for detergent containers, shampoo bottles and yogurt containers. It is easily sorted and can be mechanically recycled, yet recycling rates for this material remain low, at around 10-15% in Europe. While DRS has been applied primarily for PET bottles, it has not been widely deployed for HDPE.

A BNEF scenario comparing plastic types and recycling rates estimates that inclusive and widespread DRSs in Europe could help HDPE achieve a 74% recycling rate by 2050, if the policy capabilities of DRS are maximized. This scenario also assumes that the efficiency of mechanical recycling increases from 70% to 90% due to brand owners simplifying their packaging to be more easily recycled. BNEF estimates this scenario is likely in countries that already have highly successful DRS programs for PET, such as Germany.

An incentive-based system like DRS could also be useful for flexible packaging, which is notoriously difficult to sort and recycle. In some states and countries, consumers can bring flexible plastics back to stores for collection, although this is not always an option and is seldom rewarded. Consumers can return flexible plastics from bread and crisps packaging in several UK stores, including food retailer Co-op, no matter where they purchased the item. These initiatives are driven primarily by industry trends as brand owners accelerate their use of recycled materials for their products, rather than by policy or direct consumer incentives.

Since DRS is modeled around returning waste to a collection point, it does not necessarily drive additional investments in collection and sorting infrastructure, which are also necessary to reach circular economy targets. Nonetheless, these programs still increase the amount of plastic waste that is being collected, adding to the supply of recyclable materials and making it easier for companies to source recycled feedstock for new packaging.

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