Digital DRS is the key to unlocking a true circular economy

The UK is facing a defining moment in its journey toward a circular economy. From extended producer responsibility (EPR) and shifting recyclability assessment methodology (RAM) standards, to the long-anticipated deposit return scheme (DRS), the legislative landscape of fmcg packaging is evolving rapidly.

Pressure is mounting on brands and retailers to do more than just claim their packaging is recyclable – they now have to prove it. Yet, in 2025, most still can’t.

Despite decades of well-meaning recycling campaigns, our systems remain reliant on guesswork and too much packaging ends up downcycled, incinerated or exported. But we now have the technology that can help us change course.

Digital DRS – a breakthrough moment

Wales just became the first nation in the world to commit to a digital deposit return scheme (DDRS), a landmark move that redefines what modern, inclusive recycling can look like. Instead of relying solely on reverse vending machines, consumers in Wales will be able to scan a QR code on packaging and place it in normal kerbside recycling to reclaim their deposit. Introducing the digital aspect creates a more inclusive system, as well as a lower carbon-footprint and lower cost.

Importantly, a DDRS is made possible with item-level traceability. Every scanned code can tell us where and when packaging is disposed of in a recycling bin. If the UK is serious about DRS delivering on its promises, digital must be part of the solution, and traceability must be the foundation.

Third-party proof of recycling is now a reality

Using invisible UV data matrix tags, brands like M&S and Ocado are already capturing verified recycling data at scale. These tags, detected in real-time at recycling centres, provide solid data that packaging has been recycled. This closes the loop and builds trust with consumers and regulators alike.

This is where traceability becomes vital for extended producer responsibility (EPR). With barcode-level data, brands can prove their packaging has been correctly collected and recycled, demonstrating higher recycling rates and potentially reducing EPR fees. The granular data also allows brands to analyse which packaging formats are being successfully recycled and which are falling through the cracks.

Digital product passports are going global

Digital product passports are transforming how we authenticate products, trace supply chains, and drive circularity. From raw materials to end of life, these passports enable smarter reuse, better recycling, and more informed consumer choices – laying the groundwork for a truly circular economy.

Traceability enables evidence-based design improvements that improve RAM ratings, close the loop, and unlock long-term value from recycled content.

Without this visibility, we’re stuck in the status quo of reactive policymaking, unreliable reporting, and packaging that is “technically” recyclable, but rarely recycled properly.

The value gap, the data gap and the commercial imperative

As we build a new circular economy, traceability offers the backbone needed to make it resilient, transparent, and commercially viable.

Rather than seeing complexity as a barrier, it should be viewed as an opportunity to work together to unlock the data that drives real progress. Circular economies must be commercially sound to succeed, and that means closing the value and data gaps through innovation, collaboration, and shared purpose.

Wales’ commitment to a digital DRS shows what forward-thinking leadership can achieve, and EPR provides the necessary momentum for change. But it’s traceability that turns ambition into action.

Alice Rackley, CEO at Polytag