Scotland is aiming to be the first part of the UK to introduce a deposit return scheme for single-use drinks containers. Ministers claim it would boost recycling – but the plan is controversial, with critics calling for a delay.
All three SNP leadership contenders now say it would not go ahead in its present form – Kate Forbes and Ash Regan want it paused, while Humza Yousaf would exempt smaller firms for a year.
Lorna Slater, the Scottish Greens minister leading the scheme, says she is “actively considering” such a grace period for small businesses but has still urged them to sign up ahead of a deadline on Tuesday. The scheme itself is due to go live on August 16.
So what do we know about the scheme – and why is it coming under fire?
What is a deposit return scheme?
Deposit return schemes are used in many countries around the world to encourage people to recycle drink containers such as bottles and cans.
Many older Scots will recall being able to get money back on their “ginger” (fizzy drink) bottles when they were children – and it works in a similar way.
Anyone who buys a drink in a certain single-use container is charged a small deposit which is returned to them when they take the bottle or can to a recycling point.
The aim is to incentivize 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 20p deposit would be added to all single-use drinks 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 premises that sell such single-use products to take away.
Some retailers will accept items over the counter while larger stores, shopping centers and community hubs will operate automated receiving points known as reverse vending machines (RVMs).
Payment may be made in cash over the counter, or via a voucher from an RVM. Vouchers can be used to pay for shopping or you can ask for cash instead.
Who runs the scheme?
Drinks producers and importers are responsible for delivering the scheme but, to help them, a private non-profit company called Circularity Scotland has been created to administer it on their behalf.
Producers can administer the scheme themselves if they want to, but in most cases working with Circularity Scotland is the only practical and cost-effective option.
Retailers also have a key role to play by operating the container return points.
The way the scheme works, in more detail, is that producers are billed 20p by the administrator for every bottle or can they plan to put 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 eventually to the customer, who gets it back when the item is handed in for recycling.
In addition, producers are charged a small fee by the administrator to help cover the cost of running the service – about 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 – roughly 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 who sell their products in Scotland, is designed to be largely self-financing.
The Scottish Environment Protection Agency (Sepa) will act as regulator, carrying out inspections to achieve compliance.
Why are some businesses worried?
Some businesses fear it will place extra costs and other burdens on them at a time when they are already struggling.
Small producers such as craft breweries say they are not against the idea in principle – but warn that the timetable and details of the scheme are problematic.
Producers are being encouraged to label items destined for sale in Scotland with a special Scottish barcode – and if they choose not to do this, they face a surcharge of just over 1p per item.
Smaller firms argue that the cost of adding new barcodes and paying a flat rate £365 registration fee will have a disproportionate impact on them.
Some complain they have been given a deadline to sign up to a legally-binding agreement which potentially jeopardizes their business – but if they fail to register they risk being barred from selling their goods in Scotland.
Trade bodies say thousands of firms could end up being forced out of the Scottish market, and many products will disappear from the shelves.
Retailers can ask for an exemption from providing a collection service – but only if they can demonstrate a nearby collection point is willing to accept material on their behalf, or if collecting material would breach other rules such as fire safety or environmental health.
They are also worried that they will have to pay higher prices to producers, but there will be a delay in recouping that money from customers, hitting their cashflow.
Circularity Scotland recently announced £22m of cashflow support to help smaller producers, exempting them from fees and upfront charges for the first month, and offering two month credit terms for payments. Smaller firms can also use stick-on barcodes.
But firms claim they need a longer adjustment period. Jamie Delap, director of the Society of Independent Brewers, told the BBC they had been asking for a grace period for small businesses since October and there was still no clarity about who would be considered a “small” producer.
“I have to sign this agreement by Tuesday and I still don’t even know, even if I do choose to sign it, if I can actually comply with my legal obligations under the agreement. It’s kind of crazy,” he told BBC Radio’s Good Morning Scotland.
A leading lawyer recently claimed that the Scottish scheme could create an illegal trade barrier with other parts of the UK, as it would result in different prices being charged on either side of the border.
Aidan O’Neill KC also warned that it may prove impossible to enforce the rules on imported products – which would leave Scotland-based producers at a disadvantage.
Scottish Secretary Alister Jack has hinted that the UK government might not grant an opt out from the UK Internal Market Act, which would be a severe blow to the project.
Mr Jack cited inflationary concerns, telling MPs the scheme would see the cost of 12 bottles of Scottish water sold in Aldi rise from £1.59 to £3.99.
Similar schemes are due to be introduced in England, Wales and Northern Ireland in 2025 (although in England the scheme is not expected to include glass bottles).
The Scottish government insists it is listening to concerns, but some now argue it would be wiser to delay the Scottish scheme once again, allowing more time for preparation and better alignment with the rest of the UK.
Circular Economy Minister Lorna Slater remains confident that the scheme will not be paused. She told the BBC’s The Sunday Show there was “great momentum” towards the 16 August launch date.
“I did give them a one year delay last year to help them recover from Covid. Industry has invested tens of millions in this, and we are going ahead,” she said.