Scottish ministers offload blame on UK government after country’s latest DRS delay

25 Apr 2023 --- Another delay to Scotland’s Deposit Return Scheme (DRS) implementation has thrown up concerns around bureaucracy and poor planning and led to calls for Scottish exemption from the UK’s Internal Market Act. 

The rollout has been delayed for a second time and is now planned for March, 2024. Scheme administrator Circularity Scotland says it was “fully prepared” to launch the scheme on August 16 this year as previously planned, but will continue to support the government’s policy decisions. 

Scotland’s first minister Humza Yousaf cited “the uncertainty created by the UK government in delaying a decision on the Internal Market Act” and “the concerns of businesses, particularly on the launch date,” as many producers fear potential financial and administrative burdens, as reasons for the seven-month delay to the scheme. 

Meanwhile, circular economy minister Lorna Slater called upon the UK government to “at long last issue an exclusion, and recognize the right of the Scottish Parliament to enact legislation in devolved areas without interference.”

Robbie Staniforth, innovation and policy director at Ecosurety, says “the new administration has clearly taken soundings and decided that preparations are not significantly advanced enough to launch the scheme on time.” 

“While a further delay adds unhelpful uncertainty, it represents a pragmatic approach. However, we are disappointed that ministers have not taken the opportunity to harmonize the scheme on a UK-wide basis and align launch dates. The UK remains a single market and having differing legislation across the four nations is an additional bureaucratic burden on businesses with little clear benefit,” he explains.

The Scottish government has delayed the Deposit Return Scheme to March 2024.Setback or solution?
Along with the seven-month delay, the other changes announced by Scotland include an exclusion of drinks containers of under 100 mL and products that sell fewer than 5,000 units per year.

Additionally, all hospitality premises that sell most of their drinks products for consumption on the premises will be exempt from acting as a return point. The online application process for retailers to apply for an exemption from providing a return point has been simplified.

“While the announcement proclaimed that Circularity Scotland is ‘fully prepared,’ businesses are not convinced of this fact. The delay appeases these concerns by giving UK businesses that operate in Scotland greater confidence in the scheme’s implementation,” Staniforth tells PackagingInsights.

“Very few drinks producers operate in Scotland only, so most would like a more joined-up approach across all UK governments. It also may give time for more forward-thinking digital solutions to be incorporated to ensure that citizens do not endure the inconvenience of having to take containers back to retailers when they can currently recycle them at home.”

Meanwhile, Slater asserts that to realize the benefits of a DRS, the changes are necessary. “Scotland’s deposit return scheme will reduce litter on our streets, massively increase the recycling of drinks containers and help meet our net zero ambitions,” she says.

“However, to realize these benefits, DRS needs to be delivered in a way that works for businesses, especially for small drinks producers. The changes I have set out will make the scheme easier for the industry to deliver – especially for craft producers – while ensuring that the vast majority of drinks containers are captured for recycling.”

Scottish scuffle 
The current DRS regulations in Scotland include all drinks from 50 mL to 3 L and place no lower limit on the sales volume to qualify for the scheme. But with the recently announced changes, the government is introducing a threshold of 5,000 units per year to exclude many craft drinks and limited edition products.The “damaging” Internal Market Act has caused uncertainty for a successful Scottish DRS.

“It is anticipated that this change will only remove around 0.5% of articles from the scheme but will remove the need for around 44% of businesses to apply a deposit to their products,” the Scottish government explains.

The country’s DRS is expected to raise the prices of goods in Scotland and, as such, requires an exemption from the Internal Market Act 2020, which governs the trading relationship between the UK nations.

“To move forward with certainty, the UK Government must stop delaying the long overdue exclusion from the Internal Market Act. This damaging act was imposed on the Scottish Parliament after Brexit without its consent and creates confusion and uncertainty for businesses,” emphasizes Slater.

“After that act was passed, we engaged in good faith, following the agreed process and have done so for nearly two years now to agree on an exclusion.”

Scotland’s DRS is reportedly more aggressive than its UK counterparts. “We hope to see DRS aligned across the UK. By taking the same approach, retailers can use efficiencies of scale to make the system work effectively,” Ewan MacDonald-Russell, deputy head of the Scottish Retail Consortium, previously told PackagingInsights.

Drink retailers also expressed fears over Scotland implementing the scheme before other UK nations. It may create a separate domestic drinks market, with producers accountable for filling in the gaps in the different regulations.

DRS delay
Circularity Scotland highlights that the new launch date gives businesses almost ten months to prepare and register until January 12, 2024, for an effective DRS.

“The Scottish Government’s announcement puts an end to speculation about the timescales for the launch of the scheme and we urge all producers and retailers who have yet to register for the scheme to contact us so we can support them through the registration process” it suggests. 

According to Staniforth at Ecosurety, businesses are not convinced of Circularity Scotland’s preparedness.“It remains the case that the DRS is a vital element in Scotland’s path to net zero and will prevent billions of bottles and cans yearly from ending up as waste and polluting our landscape.”

Earlier in February, Circularity Scotland injected £22 million (US$27.4 million) of cash flow support measures to help Scotland’s brewers, distillers, importers and drinks manufacturers prepare for the DRS. The scheme administrator removed day-one and month-one charges for all producers up to a threshold of three million units per year.

It also provides two-month credit terms on deposits and fees up to the same volume threshold to reduce the working capital impact on all producers and help small and medium-sized enterprises who have previously voiced concerns about the scheme’s impact on their cash flow.

A Zero Waste Scotland spokesperson tells us: “Scotland’s DRS will deliver substantial environmental benefits for Scotland in terms of litter reduction, carbon savings and an increase in the quantity and quality of recycling.”

However, regarding the implementation delay’s impact on Scotland’s goal of net zero, Staniforth at Ecosurety says the carbon impact is likely to be small as “this scheme has not explicitly been designed to move drink provision into refillable containers.” 

“It is a collection scheme to improve the quality of recycling, for which rates are already quite high. The impact is most likely to be felt in the continuation of littering that the government hopes to reduce once the containers have a redeemable deposit value.”

Additionally, Staniforth remarks that businesses should continue to aim for circularity. “[Businesses should] explore refillable drink provision options, rather than continuing to use single-use containers. If they continue to use one-time containers, try to incorporate increasing amounts of recycled content in each bottle or can,” he concludes.

By Radhika Sikaria