The decision to delay Scotland’s Deposit Return Scheme for almost a year to address concerns with the initiative has been welcomed by many in the industry.
By Liz Wells
Scotland’s Deposit Return Scheme (DRS) has been delayed once more, this time until 1 March 2024, Humza Yousaf has announced.
The First Minister revealed the delay on 18 April, as he set out his priorities for his government over the next three years in his first major address at Holyrood since taking over the reins from Nicola Sturgeon.
He said: “I remain committed to this scheme as a way to increase recycling, reduce litter and help achieve our net zero ambitions, but we recognise the uncertainty that continues to be created as a result of the UK Government delaying the decision to exclude the scheme from the Internal Market Act. We had hoped for that decision this week – but it has not come.
“At the same time, I – and the Circular Economy Minister – have heard the concerns of business, particularly about the scheme’s readiness for launch this August. As a result, we will now delay the launch of the scheme to 1 March 2024 – this provides 10 months for businesses to get ready.”
Yousaf used his first address to offer an olive branch to business, repeatedly reiterating how he intended to work closer with industry to understand their concerns and said the Scottish Government would use the additional time to work with businesses and scheme administrator Circularity Scotland (CSL) to address concerns with the scheme to ensure a successful launch next year.
Yousaf said a package of measures would also be put in place to “simplify and de-risk” the scheme. The big question is, can all of the many serious problems that still beset the scheme be overcome in less than a year?
Retailer reaction
Association of Convenience Stores (ACS) Chief Executive James Lowman commented: “We are disappointed that we’ve not been able to meet the timetable for DRS in Scotland, but local shops will welcome the additional time to ensure that the scheme can run as smoothly as possible when it is introduced next March.
“Despite the delay, there will still be a 19-month period where the scheme will be operating in Scotland but not in the rest of the UK and this will cause issues, particularly for wholesalers and smaller suppliers.
“It is important to remember that businesses at all levels of the supply chain will need to commit to tackling the significant operational challenges that the introduction of DRS will present, in order for it to work effectively for businesses and consumers. This is still a tight timetable, but we will continue to engage with the Scottish government and support retailers with the implementation of this scheme.”
The Scottish Wholesale Association (SWA) welcomed the news, with Chief Executive Colin Smith stating: “We welcome the First Minister’s announcement of a 10-month delay and his continued commitment to support small businesses impacted by the scheme.
“It’s now essential that the Scottish Government, CSL, SEPA and business work together so we can address the myriad practical issues still standing in the way of a workable DRS being launched in March.
Similarly, the NFRN welcomed the delay but called for retailers who have already signed contracts for reverse vending machines to be compensated for the postponement [see boxout].
DRS changes
A few days after the First Minister’s announcement, Circular Economy Minister Lorna Slater unveiled a range of measures to make it easier for retailers and drinks producers to prepare for the DRS, while making sure environmental benefits are still delivered.
The changes are:
- drinks containers of under 100ml will be excluded, removing miniatures and other smaller containers from the scheme;
- products that sell fewer than 5,000 units per year will be excluded, which will particularly benefit craft producers;
- all hospitality premises that sell the large majority 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.
Slater said: “Scotland’s DRS will reduce litter on our streets, massively increase the recycling of drinks containers and help meet our net zero ambitions.
“However, to realise 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 industry to deliver – especially for craft producers – while still making sure the vast majority of drinks containers are captured for recycling.”
In response to the changes, SWA’s Colin Smith said: “One of our aims, and we have been pushing for this since 2019, has been to have a de-minimis approach to ensure wholesalers putting small volumes of a product onto the market aren’t hit hard by DRS.
“We were extremely pleased that our ongoing engagement with the Circular Economy Minister resulted in her announcement today of a de-minimis for all products below 5,000-unit sales.”
“This will not only help our wholesalers and smaller producers, but also reduce the numbers of producers CSL has to deal with, thereby simplifying and de-risking Scotland’s DRS.”
Internal Market Act
Slater also repeated her call for the UK government to issue an exclusion from the Internal Market Act for the scheme.
She added: “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.
“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 an exclusion. The UK Government needs to at long last issue an exclusion and recognise the right of the Scottish Parliament to enact legislation in devolved areas without interference.”
Meanwhile, Circularity Scotland said it will continue to support businesses of all sizes across Scotland in getting ready for the scheme’s launch on 1 March 2024.
The organisation said: “This new launch date now gives those businesses almost 10 months to prepare and those businesses who have yet to register now have until 12 January 2024 to do so.
“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.”
The NFRN is calling for retailers who have already signed contracts for reverse vending machines (RVMs) to be compensated for the delay.
The organisation says it will be demanding compensation for those retailers that have already entered into expensive contracts for the RVMs required to operate the scheme. Many of NFRN’s members, it says, have spent large sums of money buying RVMs and altering the layout of their stores to be prepared for the launch of the scheme in August.
NFRN also says it will continue to push the government for grants to help pay for the machines.
Andrew McCaffery, Chief Strategy Officer at environmental compliance data specialist Ecoveritas, said the Scottish Government was coming under pressure to compensate companies that had invested in DRS, when thousands of others had failed to sign up.
“You do have to feel for responsible businesses that have kept on top of this legislation, developed and changed to meet these new requirements,” he said. “Any delay penalises those that have acted quickly.
“You have to wonder whether there might be temporary support or reimbursement for those who have diligently prepared and significantly invested.”
