Scotland aims to become the first part of the UK to introduce a deposit return scheme for single-use drink containers. Ministers claim it would speed up recycling – but the plan is controversial, with critics calling for a delay. So what do we know about the scheme – and why is it coming under fire?
What is a deposit return scheme?
Deposit return schemes (DRS) are used in many countries around the world to encourage people to recycle drinks containers such as bottles and cans.
Many older Scots will remember being able to get money back on their bottles of “ginger” (fizzy drink) when they were children – and it works the same way.
Anyone who buys a drink in a certain single-use container is charged a small deposit which is returned to them when they pick up the bottle or take the bottle to a recycling point.
The aim is to encourage recycling but also to reduce litter and help tackle climate change by reducing the amount of material going to landfill.
How would it work in practice?
A deposit of 20p would be added to all single-use drink containers made of PET plastic, metal or glass. It applies to both alcoholic and soft drinks.
The consumer gets their money back by returning the container to retailers and hospitality establishments that sell such single-use products for take-out.
Some retailers will accept goods over the counter and large stores, shopping centers and community hubs will operate automated acceptance points known as reverse vending machines (RVMs).
Payment can be made in cash over the counter, or by voucher from RVM. Vouchers can be used to pay for shopping or cash can be requested instead.
Who runs the scheme?
Drinks producers and importers are responsible for delivering the scheme but, to help them, a private not-for-profit company called Circularity Scotland has been created to administer it on their behalf.
Producers have the option of administering the scheme themselves but in most cases working with Circularity Scotland will be more cost effective.
Retailers also play a key role by operating the container return points.
The way the scheme works, in more detail, is that the administrator charges producers 20p for each bottle or can put it on the Scottish market – but they get this back by adding it to the cost of their products .
This 20p deposit is passed down the chain, through wholesalers and retailers – and ultimately to the customer who gets it back when the item is brought in for recycling.
In addition, the administrator charges producers a small fee to help cover the cost of running the service – around 2p per item for plastic or aluminum bottles and 4p per glass bottle.
Circularity Scotland will pay retailers a small handling fee for fulfilling their role as return points – around 2p or 3p per item depending on the collection method.
The retailers pay customers for recycled items out of their own funds, but are reimbursed by the administrator.
The scheme, which covers all drinks producers selling their products in Scotland, is designed to be largely self-funded.
The Scottish Environmental Protection Agency (Sepa) will act as regulator, carrying out inspections to ensure compliance.
When is it going live?
The plan was first announced in 2019 and was due to start in July 2022 but this was pushed back after a review found that date to be “unworkable”, with Covid interference being blamed.
It is currently scheduled to start operating from 16 August 2023.
Producers have until the end of February to register with Sepa and pay a flat rate registration fee of £365.
They can do this through Circularity Scotland but if they choose this route they are advised to register earlier.
Why are some businesses worried?
Some businesses fear it will impose additional costs and other burdens on them at a time when they are already struggling.
Small producers such as craft breweries say they are not opposed to the idea in principle – but warn there are problems with the timetable and details of the scheme.
Producers are being encouraged to label goods to be sold in Scotland with a special Scottish barcode – and if they choose not to do this, they will face a surcharge of just over 1p per item.
Smaller businesses argue that the cost of adding new barcodes or paying a flat-rate registration fee will have a disproportionate impact.
Retailers can request an exemption from providing a collection service – unless they can demonstrate that a nearby collection point is willing to accept material on their behalf, or if the collection of material would breach other rules such as fire safety or environmental health.
They are also concerned that they will have to pay higher prices to producers but there will be a delay in getting that money back from customers, hitting their cash flow.
A prominent lawyer recently claimed that Scotland’s scheme could create an illegal trade barrier with other parts of the UK, as it would result in different prices being charged on each side of the border.
Aidan O’Neill KC also warned that it could be impossible to enforce the rules on imported products – which would leave producers based in Scotland at a disadvantage.
Similar schemes are due to be introduced in England, Wales and Northern Ireland in 2025 (although glass bottles are not expected to be included in the scheme in England).
What is the government saying?
The Scottish government insists it is listening to concerns but some now argue it would be wiser to delay the Scottish scheme again, allowing more time for preparation and better alignment with the rest of the UK .
Circular Economy Minister Lorna Slater says she is confident the scheme will not be scrapped.
She told BBC Scotland’s The Nine programme: “Scotland’s deposit refund scheme is such an important part of how we tackle the blight of litter on our streets and in our parks and how we achieve net zero. And the year last year we gave businesses a full extra year So I’m confident of a successful launch in August this year.
“The UK government has been working with us on this scheme for years. Only last week I received correspondence from the UK Treasury which clarifies the VAT rules but also said that the UK government fully supports the environmental objectives of the Scheme Scottish Treasury returns and is committed to ensuring that it operates effectively.
“We are currently working to support businesses to be able to register with the scheme by the deadline, but we have always said that we will take a pragmatic approach so that businesses really have the information they need and are able to there. participate fully in this scheme.”