Investing.com -- Shares of Tomra Systems (OL:TOM) jumped more than 5% on Wednesday after the UK government passed regulations for the implementation of a Deposit Return Scheme (DRS) in England and Northern Ireland.
Barclays (LON:BARC) analysts noted that the new regulation could create growth opportunities for the Norwegian recycling technology company, especially within its Collection segment.
As per Barclays' estimates, Tomra could deploy between 15,000 and 17,000 reverse vending machines in the UK as part of the DRS rollout, which is set to go live on October 1, 2027.
With Tomra expected to capture a market share of 50-60%, the initiative could generate an incremental €500-600 million in revenues spread across fiscal years 2026 and 2027.
This represents a substantial potential upside of 40-50% to Tomra’s and analysts’ current projections for Collection revenues in 2027.
The UK decision aligns with a broader push across Europe to establish similar recycling systems, driven by regulatory mandates under the EU’s Packaging (NYSE:PKG) and Packaging Waste Regulation (PPWR).
While the UK represents one of the larger opportunities, Barclays also pointed to other promising developments in countries like Poland, Portugal, Singapore, and Spain, which are expected to roll out their DRS programs between 2024 and 2027.
Poland’s DRS is anticipated to go live later this year, with Portugal scheduled to launch its system in early 2026.
Analysts expect additional markets to follow suit ahead of the EU’s 2029 deadline, further solidifying Tomra’s long-term growth prospects.