Unclaimed Deposit Return Scheme Funds Exceed €66 Million
Ireland’s Deposit return Scheme: First Year Results & Future Outlook
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Ireland’s Deposit Return scheme (DRS), launched in February 2024, has seen significant success in its first year, with over 877 million containers returned for recycling.The scheme, managed by Re-Turn, is already making a substantial impact on the country’s circular economy, though initial financial reports reveal expected challenges related to unredeemed deposits. This article details the scheme’s performance, financial standing, and future plans.
DRS Performance in 2024: A Nation Embraces Recycling
The initial uptake of the DRS has been remarkably positive. Re-Turn CEO Ciaran foley highlighted the “unbelievable buy-in and adoption from the Irish public,” resulting in 877 million containers returned in 2024. This translates to an average recycling rate of 66% post-transition, demonstrating a significant shift in consumer behavior.The scheme experienced peak performance during warmer months, with a return rate reaching 75% in August, driven by increased consumption of soft drinks.The Christmas period also saw exceptionally high returns,with daily volumes exceeding 5 million products. Each 1% increase in the return rate equates to approximately 19 million containers,illustrating the scheme’s scalability and potential for further growth.
Understanding Unredeemed Deposits & Financial Performance
As anticipated with any new deposit return scheme, a portion of deposits remain unredeemed. The report acknowledges this as a “routine scenario,” notably during the initial transition period.Re-Turn explains that these unredeemed deposits are being strategically reinvested to support the scheme’s long-term sustainability.
These reinvestments include:
Initial Set-Up Costs: paying down expenses incurred during the scheme’s establishment.
Infrastructure Advancement: Expanding and improving the collection and processing infrastructure.
Consumer Education: Funding campaigns to raise awareness and encourage continued participation.
Contingency Reserve: Contributing to a legally required reserve fund to ensure financial stability.
While unredeemed deposits currently provide a revenue stream, re-Turn expects this income to diminish as the scheme approaches its target redemption rate of 90%. Looking ahead, any higher-than-forecast unredeemed amounts will be used to further boost scheme adoption and invest in innovative circular economy projects.
Re-Turn closed the year with a cash balance of €89.8 million. However,this figure is expected to decrease considerably in 2025 due to several planned draw-downs,leaving an adjusted cash balance of approximately €32 million.
Key Financial Draw-Downs Scheduled for 2025
The anticipated reduction in cash reserves is primarily due to the following commitments:
VAT Settlement: A €23.7 million settlement related to VAT on unredeemed deposits.
Contingency Reserve Provision: €13.8 million allocated to Re-Turn’s contingency reserve fund.
Bank of Ireland Facility Settlement: Finalizing the remaining €11.7 million balance of a loan facility.
Retailer Grant Settlement: Approximately €3.2 million in grants to retailers for their participation in the scheme during 2024.
* Corporation Tax provision: €5.4 million set aside for corporation tax on surplus funds.
A Defining Milestone for Ireland’s Circular Economy
Tony Keohane,Chair of Re-Turn,emphasized the meaning of the DRS launch,calling it “a defining milestone in the country’s journey toward a more lasting future.” He highlighted the scheme’s ability to not only increase recycling rates but also to produce high-quality recyclate, crucial for building a robust circular economy.
The success of the DRS demonstrates a strong commitment from Irish consumers to environmental duty and positions Ireland as a leader in sustainable waste management practices. Continued investment in infrastructure, education, and innovation will be key to maximizing the scheme’s long-term impact and achieving its enterprising recycling targets.
Read more: 1.6bn containers returned through Deposit Return Scheme