Executive Summary: European deposit return schemes (DRS) for beverage containers dramatically increase recycling rates and yield higher-purity aluminium and steel scrap [6] [9]. By diverting cans from mixed waste, DRS provide a steady stream of clean, sorted feedstock, reducing contamination and processing losses. This high-quality secondary material supports closed-loop packaging production. However, global market pressures – from scrap shortages to energy costs – are driving up metal prices [4] [23]. Packaging buyers and procurement teams must factor DRS-driven recyclate availability, EU regulations e.g. PPWR, BPA bans[33][6], and cost volatility into supplier evaluations and sourcing strategies.

Introduction

Europe’s packaging sector faces intense pressure to increase recycling and close material loops. Under the new Packaging and Packaging Waste Regulation (PPWR), EU law now mandates deposit systems for single-use metal beverage containers [3] [32] and sets a 90% collection target for bottle and can DRS by 2029 [28]. For ESG-focused procurement and finance leaders, understanding the real-world impact of deposit schemes on recycled metal quality and material availability is crucial. High return rates in DRS not only cut litter and waste management costs, but produce nearly pure aluminium/steel scrap – a far cleaner feedstock than curbside or incinerator routes [9] [8]. In practical terms, this means packaging makers can more reliably use recycled content. However, recent market trends (e.g., tight scrap supplies, rising energy prices) are squeezing margins. This article examines DRS in Europe – how they work, what benefits they deliver for metal packaging, and how buyers can evaluate their effects on supply, price, and sustainability goals.

Deposit Return Schemes in Europe: Context and Scope

Deposit return schemes (DRS) require a small deposit on beverage containers (often €0.10–€0.30), refunded upon return. In practice, consumers return empty bottles and cans to reverse-vending machines or collection points. Across Europe, about a dozen countries have DRS in place (e.g. Germany, Sweden, Finland, Norway, Ireland, Denmark, the Netherlands since 2023) [10]. Typically, DRS cover plastic (PET/HDPE) and metal (aluminium and tinplate steel) drink containers, with competitors or EU law nudging expansion to 90% of containers by 2029 [3] [28].

How DRS differ from curbside collection: Unlike kerbside recycling where household waste is mixed and later sorted (often yielding contamination and metal loss), DRS generate single-stream, returnable-only flows. Each returned can or bottle is scanned for eligibility (e.g. barcode/logo) and sorted by material at the refund station. This pre-sorting means contaminants (food residue, plastics) are minimal. For example, Norway’s DRS (in place since 1999) covers all beverage cans and achieved a 92.5% return rate for cans in 2023 [10] – virtually ensuring that few aluminium cans escape recycling.

Regulatory Drivers: The EU’s PPWR (Reg 2025/40) explicitly highlights DRS benefits: “Well-functioning deposit and return systems ensure a very high collection rate and high-quality recycling, especially of beverage bottles and cans, and contribute to increasing the supply of good quality secondary raw material suitable for closed-loop recycling” [6]. In other words, EU law recognizes that DRS deliver cleaner recyclate streams tailored for “can-to-can” reuse. The PPWR now requires all single-use metal beverage containers to enter DRS by 2029 [31] (with some exceptions like wine bottles), aligning policy to push the entire sector toward high recovery.

DRS Performance: Recycling Rates and Recyclate Quality

Collection Rates: Real-world data confirm DRS outperforms voluntary systems. As noted, Norway recovers 92.5% of aluminium cans via DRS [10]. Other long-standing DRS countries report similar success: Sweden (introduced 1984) recycles ~88% of PET bottles [30] (a proxy for overall beverage container returns), Finland ~96%, Germany ~98%. Even newer adopters see rapid gains – Ireland’s DRS launched in 2023 targets at least 85% return on PET and cans [30]. In 2023, a French study found ~15 European countries had DRS and some already surpassed 90% beverage container recycling [29]. These rates greatly exceed typical curbside collection (often 40–60%) and help meet the PPWR’s 90% by 2029 target [28].

Recycling Yields: Crucially, deposit-collected metal fetches higher metal yields with less processing loss. A recent Dutch analysis illustrates the contrast [9] [8] (summarised in Table 1). When cans enter a dedicated DRS stream, sorting and remelting losses are minimal – only ~2–3%. Combined with 85–97% return rates, overall recycling yields of 80–95% are typical [9]. By contrast, aluminium cans recovered via mixed waste (e.g. incinerator bottom ash or mechanical sorting of municipal waste) suffer far greater losses. In an incineration route, about 10% of aluminium oxidizes in the boiler and another ~15% is lost post-incineration, yielding only ~76% recovery [8]. Kerbside sorting (“PMD” streams) can miss up to half of cans, and require further processing; even in best-case 90% sort efficiency, practical yields were ~78% [27].

*Note: Losses include sorting, decoating, oxidation and residue removal [8] [26].

Purity of Recovered Metal: DRS-delivered scrap is not just higher yield – it is purer. Council Regulation 333/2011 (EU criteria to end the waste status of scrap) demands aluminium scrap be at least 90% metal and <5% non-metallics [1]. Deposit-collected beverage cans inherently meet this: they contain no food or plastic components, just thin lacquer/ink coatings. In practice, returned cans are “decoated” through thermal or chemical processes (burning off paint/labels) to produce premium aluminium alloy (primarily Al-Mg-Mn, the standard “beverage alloy”). This café-grade alloy can often be remelted directly into new cans (“can-to-can recycling”) without needing dilution with virgin material [7] [11]. By contrast, mixed municipal scrap may include zinc, dirt, glass, etc. DRS scrap’s quality translates into higher metal yields and lower refining costs. The EC’s PPWR explicitly notes DRS “will contribute to… supply of good quality secondary raw material suitable for closed-loop recycling” [6], underlining this technical benefit.

Environmental Impact: The cleaner loop also improves ESG metrics. Using recycled aluminium uses ~95% less energy and emits ~95–97% less CO₂ than primary (bauxite) production [11]. In Europe, 39% of aluminium demand is already met by recycling [23] – mostly via packaging scrap. Higher DRS returns can further shift supply toward these low-carbon recyclates, reducing reliance on energy-intensive imports [25]. One industry study warns that if scrap is diverted abroad, Europe might have to import higher-emission primary aluminium, an environmental setback.)[11]. Thus, beyond quantity, DRS plays a key role in Europe’s carbon and resource goals.

Implications for Packaging Supply and Costs

Secondary Metal Availability

Europe’s metal packaging producers depend heavily on recycled feedstock. Per 2023 data, 39% of EU aluminium came from recycling, 54% from imports and only 7% from local primary smelting [23]. (For steel, EU is also net importer despite high domestic recycling. High DRS recovery should boost the domestic scrap pool available for new cans and trays. For example, aluminium beverage cans themselves constitute ~40% of Dutch domestic metal packaging market [24], so diverting them through DRS frees a large, dedicated scrap flow. Over time, increased DRS coverage across Europe will raise the proportion of aluminium (and tinplate) scrap coming from ‘closed-loop’ consumer streams, as opposed to mixed municipal waste or exports. In turn, can manufacturers may secure more recycled input locally, reducing dependence on imported scrap or primary ingot (a key consideration given the EU’s projected supply crunch)[22][23].

However, global market factors complicate availability. Even with robust DRS, overall scrap supply can tighten. In early 2026, trade data and producer reports revealed persistent aluminium scrap shortages across Europe [22]. A Fastmarkets report noted domestic scrap inflows were “very low” as yards held onto scrap ahead of anticipated EU export taxes [22]. The 2025 US tariffs on primary aluminium (25% duty since early 2025) led US consumers to import more recycled aluminium (which is exempt), bidding up global scrap prices [5] [21]. In short, even if DRS captures nearly all cans, other uses and exports of EU scrap may still outstrip supply. Packaging producers must thus navigate an environment of constrained secondary metal availability.

Market Pricing and Cost Trends

Tight scrap supply has driven prices upward. As of January 2026, European scrap aluminium (standard “floated” scrap) traded around €1,900–2,000/tonne [4], up 2–3% in a week and well above year-ago levels. Secondary aluminium ingots (for casting) were near €2,600–2,700/t [20]. One commentator called 2026 scrap prices “firm”, noting current margins for alloy producers are razor-thin – scrap costs often exceed finished ingot prices [19]. The EU’s new Carbon Border Adjustment Mechanism (CBAM) will likely raise costs for imported aluminium, further strengthening the case (and price) for domestic remelted material [4]. In short, feedstock inflation is real: aluminium recyclers “cannot make a profit at the proposed price” of scrap, warns one foundry manager [18].

For steel packaging (tinplate), the picture is similar. EU hot-dip galvanised steel (for cans) is linked to broader steel scrap markets. While steel scrap is more abundant in Europe ( ~70% domestic recycling), recent dynamics (e.g. energy costs, Chinese imports) have also pushed scrap values and flat-rolled steel prices. Packaging buyers must watch both aluminium and steel scrap indices.

Impact on packaging costs: Higher scrap prices translate to cost pressure. Can sheet producers, beverage can manufacturers and food packers may face rising material costs or margin squeeze. In some cases, premium for “high-grade scrap” (intact can alloy) widens the price gap. The Dutch RAVN study noted that post-DRS, “the potential value of can-to-can recycled aluminium is considerably higher” [7]. Suppliers may adjust contracts to reflect the better quality recyclate – or pass higher costs upstream. Plus, investment in sorting or compaction (for deposit packs) may involve capital expense for retailers and manufacturers [17].

On the other hand, stable DRS streams could mitigate volatility. A guaranteed source of nearly pure scrap might reduce reliance on spot markets or exports. It could also reduce processing costs: sorting firms receive a ready-made aluminium stream, simplifying logistics. Contract agreements might evolve where packaging buyers secure recycled content at fixed prices, backed by DRS suppliers.

Regulatory and ESG Considerations

In addition to DRS, other regulations are driving packaging costs and design choices:

• BPA Ban (2025): The EU’s Commission Regulation (EU) 2024/3190 (effective 20 January 2025) bans Bisphenol A (BPA) in food-contact materials, including coatings for metal cans [2]. This forces all beverage and food can linings to switch to alternatives (e.g. BPS-free epoxy or phenolic resins). Transition costs (new formulations, approvals) may raise coating prices, affecting can suppliers and ultimately shrinkers. Buys must confirm packaging (cans, closures, jugs) comply with the new BPA-free standards [16], adding one more supplier qualification criterion.
• Recycled Content Targets: The PPWR emphasizes use of recycled content (especially mandated for plastics). While no explicit direct targets for metal exist before 2030, EU policy clearly favours recyclate use. Companies should note that using DRS-sourced aluminium scrap can help meet voluntary or future required recycled content levels, and earn EPR fee reductions [15] [14] (similar schemes exist in some countries). Having documentation of scrap origin (e.g. DRS supply certs) could become a competitive advantage or compliance proof.
• Food Contact Material (FCM Safety: Packaging SCM teams must ensure all materials (including recycled aluminium) meet food safety standards リ. The BPA ban followed an EFSA opinion on health risks [13]; other substances (e.g. PFAs, heavy metals) are increasingly scrutinized. One advantage of DRS scrap is its traceability and purity, easing testing burdens. Procurement should require certificates confirming scrap meets FCM regs post-purification.

Overall, almost all large packaging players now list sustainability metrics in procurement specs. Deposit-return recycling resonates with ESG goals (lower carbon footprint, waste reduction). Many beverage producers even adjust packaging strategy: with both refillable and recyclable DRS-compatible pack options, they diversify reliance on metal vs glass vs plastic. Notably, DRS also “levels the playing field” between beer in returnable glass and beer in cans [12], influencing strategic shifts to metal containers for certain products.

Best Practices and Evaluation Framework

Supply chain and procurement leaders should treat DRS integration as both an opportunity and risk factor. The following framework can help:

1. Assess Feedstock Quality Needs: Determine the alloy grade and quality tolerance of your packaging lines. If high recycled content is desired, prioritize suppliers sourcing from DRS-collected scrap. For can sheet mills, evaluate whether incoming scrap meets EU “End of Waste” criteria (Reg 333/2011) – ideally scrap should have >90% aluminium metal and <5% impurities [1]. DRS-origin scrap typically satisfies this, reducing supplier QA risk.
2. Evaluate Supplier Capabilities: When qualifying metal sheet or recycled alloy suppliers, include questions on their sourcing channels. Ask explicitly if and how they utilize DRS returns, and what return rates their feedstock streams achieve. Suppliers sourcing via DRS may market “higher purity” recyclate – this should be documented. In contrast, suppliers reliant on kerbside might disclose lower yield and potential contaminants (some scrap standards classify e.g. Grade A “baled cans” vs Grade B mixed scrap).
3. Cost and Contract Terms: Given volatile scrap prices, negotiate flexible contracts. Consider fixed-price agreements for a portion of supply to hedge right (with quality conditions). If scrap costs rise (as seen in 2025–26), examine scaled pricing or surcharges tied to official metal indices. Explore whether your country’s DRS scheme allows “unredeemed deposits” (unreturned containers) to contribute to scheme revenue – in some systems the scheme operator sells them as scrap, indirectly affecting metal markets.
4. Monitor Regulatory Changes: Stay updated on EU and national compliance deadlines (e.g. BPA ban Jan 2025, new packaging label laws under PPWR, recycled content guidelines). Packaging sources should be certified for these. Document compliance in procurement tender criteria (for example, “packaging must comply with Reg 2024/3190 by Jan 2025 and use labelling from 2026”).
5. Life-cycle & Carbon Accounting: For ESG or finance teams, quantify the carbon/energy savings of using DRS-derived scrap. A key selling point: every tonne of recycled aluminium saves ~12 MWh of electricity (about 95% energy) and up to 8 tonnes CO₂ vs primary [11]. Demonstrating such benefits supports sustainability reporting and may justify paying a slight premium for high-grade recyclate.
6. Scenario Planning: Model supply scenarios with/without DRS for metal packaging. For instance: if your key market country introduces DRS in 2029, expect domestic scrap yields to jump. Would your supply contracts pivot at that time? Conversely, if DRS import rising (as US case shows), plan for scrap procurement risk.

Figure – Key Considerations When Evaluating DRS Impact: (Can be conceptual or bullet.)
– Material Collection: percent of containers in DRS, expected collection rate (e.g. 90%).
– Recyclate Quality: contaminants, alloy composition – required vs offered.
– Supply Security: scrap price trends, export policies, local demand (e.g. CBAM).
– Compliance Alignment: meeting EU’s PPWR mandates and FCM regs.
– Cost/Benefit: scheme fees/deposit costs vs reduced waste management.
– Brand/ESG Value: consumer perception, reporting metrics on circularity.

Key Takeaways

• Deposit Schemes Drive High Recovery: European DRS consistently achieve >85% return on beverage cans, far above curbside rates. For example, Norway’s scheme recovers ~92.5% of cans [10]. This means nearly all aluminium and tinplate in DRS markets are captured for recycling.
• Improved Recyclate Quality: By isolating drink cans and sorting at source, DRS scrap is far cleaner. Independent analyses show DRS streams yield ~80–95% end recovery (vs ~76–78% in non-DRS routes) [9] [8]. The metal content is high-grade (beverage alloy), ideal for making new cans (“can-to-can” reuse) [7]. EU law acknowledges this, requiring DRS to boost supply of “good quality secondary raw material” [6].
• Impact on Packaging Supply: Greater availability of quality scrap means packaging producers can substitute more recycled content without performance loss. However, rising scrap demand (e.g. diverted to the US market)[5] and regulatory costs (BPA ban, PPWR) may raise material prices. In 2025-26, European aluminium scrap prices climbed to €1,900–2,000/t [4] amid tight supply. Packaging buyers should expect volatile markets.
• Regulatory Drivers: The new EU Packaging & Packaging Waste Regulation (PPWR) mandates deposit for metal beverage containers by 2029 [3], aligning supply chain needs with DRS outcomes. Meanwhile, the EU’s 2025 ban on BPA in can coatings forces packaging redesign [2]. Companies must ensure suppliers meet these evolving rules.
• Supply Chain Strategy: Evaluate metal packaging suppliers on their DRS integration. Suppliers sourcing DRS-derived scrap can often offer more stable and eco-friendlier feedstock. Conversely, reliance on mixed scrap may incur higher processing costs. Procurement criteria should include scrap origin, compliance documentation (e.g. scrap meets EU end-of-waste criteria)[1], and risk buffers for price swings.

References

[1] eur-lex.europa.eu – https://eur-lex.europa.eu/eli/reg/2011/333/oj/?locale=de#:~:text=Aluminiumschrott%2C%20einschlie%C3%9Flich%20Schrott%20aus%20Aluminiumlegierungen%2C,%C3%9Cbertragung%20vom%20Erzeuger%20an%20einen

[2] EU prohibition on the use and trade of Bisphenol A from 20 January 2025 | Access2Markets – https://webgate.acceptance.ec.europa.eu/portal9/en/news/eu-prohibition-use-and-trade-bisphenol-20-january-2025#:~:text=From%2020%20January%202025%2C%20Commission,contact%20materials%20across%20the%20EU

[3] eur-lex.europa.eu – https://eur-lex.europa.eu/legal-content/EN/TXT/?qid=1762178441061&uri=CELEX%3A32025R0040#:~:text=%28142%29%20%20,Member%20States%20should%20ensure

[4] EU Secondary Aluminium Prices Firm Amid Shortages – Fastmarkets – https://www.fastmarkets.com/insights/eu-secondary-aluminium-prices-firm-as-scrap-shortages-bite/#:~:text=Fastmarkets%20assessed%20the%20price%20for%C2%A0aluminium,per%20tonne%20a%20week%20ago

[5] www.lemonde.fr – https://www.lemonde.fr/en/economy/article/2025/04/02/how-us-tariffs-are-disrupting-europe-s-aluminum-industry_6739780_19.html#:~:text=implemented%20by%20the%20Trump%20administration,As

[6] eur-lex.europa.eu – https://eur-lex.europa.eu/legal-content/EN/TXT/?qid=1762178441061&uri=CELEX%3A32025R0040#:~:text=%28141%29%20%20,bottles%20laid%20down%20in%20Directive

[7] RAVN | Verbetert de recycling van aluminium verpakkingen
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[8] RAVN | Verbetert de recycling van aluminium verpakkingen
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[9] RAVN | Verbetert de recycling van aluminium verpakkingen
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[10] www.tomra.com – https://www.tomra.com/reverse-vending/media-center/feature-articles/norway-deposit-return-scheme#:~:text=%2A%20Container%20return%20rates%3A%2092.3,of%20plastic%20bottles

[11] www.lemonde.fr – https://www.lemonde.fr/en/economy/article/2025/04/02/how-us-tariffs-are-disrupting-europe-s-aluminum-industry_6739780_19.html#:~:text=decades.%20,10%20times%20more%20greenhouse%20gases

[12] RAVN | Verbetert de recycling van aluminium verpakkingen
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[13] EU prohibition on the use and trade of Bisphenol A from 20 January 2025 | Access2Markets – https://webgate.acceptance.ec.europa.eu/portal9/en/news/eu-prohibition-use-and-trade-bisphenol-20-january-2025#:~:text=approved%20by%20EU%20Member%20States,the%20reproductive%20and%20endocrine%20systems

[14] eur-lex.europa.eu – https://eur-lex.europa.eu/legal-content/EN/TXT/?qid=1762178441061&uri=CELEX%3A32025R0040#:~:text=of%20recycled%20content,facility%20where%20packaging%20is%20manufactured

[15] eur-lex.europa.eu – https://eur-lex.europa.eu/legal-content/EN/TXT/?qid=1762178441061&uri=CELEX%3A32025R0040#:~:text=for%20recycled%20content%20in%20plastic,basis%2C%20increased%20targets%20should%20apply

[16] EU prohibition on the use and trade of Bisphenol A from 20 January 2025 | Access2Markets – https://webgate.acceptance.ec.europa.eu/portal9/en/news/eu-prohibition-use-and-trade-bisphenol-20-january-2025#:~:text=It%20affects%20packaging%2C%20such%20as,distribution%20coolers%20or%20other%20kitchenware

[17] RAVN | Verbetert de recycling van aluminium verpakkingen
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[18] www.lemonde.fr – https://www.lemonde.fr/en/economy/article/2025/04/02/how-us-tariffs-are-disrupting-europe-s-aluminum-industry_6739780_19.html#:~:text=choice%3A%20instead%20of%20importing%20primary,he%20said

[19] EU Secondary Aluminium Prices Firm Amid Shortages – Fastmarkets – https://www.fastmarkets.com/insights/eu-secondary-aluminium-prices-firm-as-scrap-shortages-bite/#:~:text=%E2%80%9CThe%20European%20market%20is%20being,prices%2C%E2%80%9D%20the%20ingot%20maker%20added

[20] EU Secondary Aluminium Prices Firm Amid Shortages – Fastmarkets – https://www.fastmarkets.com/insights/eu-secondary-aluminium-prices-firm-as-scrap-shortages-bite/#:~:text=%E2%80%9COur%20scrap%20suppliers%20are%20delaying,%E2%80%9D

[21] www.lemonde.fr – https://www.lemonde.fr/en/economy/article/2025/04/02/how-us-tariffs-are-disrupting-europe-s-aluminum-industry_6739780_19.html#:~:text=The%20difficulties%20faced%20by%20recyclers,Risk%20of%20foreign%20competition

[22] EU Secondary Aluminium Prices Firm Amid Shortages – Fastmarkets – https://www.fastmarkets.com/insights/eu-secondary-aluminium-prices-firm-as-scrap-shortages-bite/#:~:text=Tight%20scrap%20availability%20has%20been,values%20despite%20mixed%20downstream%20demand

[23] www.lemonde.fr – https://www.lemonde.fr/en/economy/article/2025/04/02/how-us-tariffs-are-disrupting-europe-s-aluminum-industry_6739780_19.html#:~:text=The%20difficulties%20faced%20by%20recyclers,from%20recycling

[24] RAVN | Verbetert de recycling van aluminium verpakkingen
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[25] www.lemonde.fr – https://www.lemonde.fr/en/economy/article/2025/04/02/how-us-tariffs-are-disrupting-europe-s-aluminum-industry_6739780_19.html#:~:text=used%20in%20the%20EU%20came,Risk%20of%20foreign%20competition

[26] RAVN | Verbetert de recycling van aluminium verpakkingen
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[27] RAVN | Verbetert de recycling van aluminium verpakkingen
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[31] eur-lex.europa.eu – https://eur-lex.europa.eu/legal-content/EN/TXT/?qid=1762178441061&uri=CELEX%3A32025R0040#:~:text=match%20at%20L1731%20,Member%20States%20should%20ensure

[32] eur-lex.europa.eu – https://eur-lex.europa.eu/legal-content/EN/TXT/?qid=1762178441061&uri=CELEX%3A32025R0040#:~:text=production%20and%20distribution%20systems%2C%20deposit,However%2C%20Member%20States%20may%20establish

[33] EU prohibition on the use and trade of Bisphenol A from 20 January 2025 | Access2Markets – https://webgate.acceptance.ec.europa.eu/portal9/en/news/eu-prohibition-use-and-trade-bisphenol-20-january-2025#:~:text=Bisphenol%20A%20,bottles%20or%20food%20transport%20equipment