Scotland’s deposit return scheme will go live for consumers on 16 August 2023. It’s part of Scotland’s campaign to recycle more. Those of a certain age will remember well how we used to be able to return drinks bottles in Scotland and either get money back or the price knocked off our next purchase.

So we did this in the past – what is different now? and why are many businesses and opposition politicians kicking up a fuss about the Scottish scheme?

The Deposit and Return Scheme for Scotland Regulations 2020,was  passed by the Scottish Parliament in May 2020. Similar schemes in other countries have been working well for years.

Norway’s deposit return system is one of the most efficient in the world. With a sophisticated, convenient return infrastructure and a competitive deposit value that truly incentivizes consumers to return their empty containers, Norway’s deposit system helps keep containers in the loop and promotes sustainable habits to consumers. 

Tomra

The deposit return scheme in Norway is seen as just part of every day life. Click on this link to find out more: Norway’s deposit return scheme is world’s recycling role model

So it works well in other countries, are Scots genetically not programmed to produce a workable scheme?

The scheme in Scotland is being delivered by Circularity Scotland Ltd., an industry-led body representing drinks producers, retailers and trade bodies of all sizes. A business-led approach common among many of the most successful schemes in Europe, include Denmark, Finland, and The Netherlands.

In Scotland all drinks retailers will have a legal duty to accept returned drinks containers and refund the consumers deposit.

The scheme is designed to be self-financing with administrative costs covered by revenues from recovered materials and unredeemed deposits and a small producer fee.

And that is what has happened in other countries using similar schemes.

Circularity Scotland announced, 21 February, that there will be an investment of £22 million to support small businesses to prepare for the introduction of the scheme. A two month grace period will also be given to businesses as the scheme begins, to smooth the transition.

But still the calls continue to halt the long anticipated scheme.

Orkney Constituency MSP, LibDem Liam McArthur is amongst those wanting to pause the scheme. In addition to stopping it going forward in August this year he also wants to see an independent review set up.

Liam McArthur said:

“After weeks of mounting concerns from small producers, industry leaders and parties across parliament it is welcome that Circularity Scotland have come forward with cashflow support. However, fundamental concerns about how this scheme will work in practice remain unanswered.

“Without that essential clarity, Ministers risk inflicting serious damage on small producers and retailers across the country. Indeed, we are nowhere close to getting this scheme right for places like Orkney which pose specific logistical challenges.

“Scottish Ministers appear more concerned with going further and faster than the rest of the UK as an end it itself rather than listening to and addressing the concerns of those at the sharp end. Instead of learning from international best practice, this approach risks undermining the strong support there is for DRS.

“We know that DRS can help reduce waste, emissions and litter and urgency is certainly needed.  But those aims won’t be achieved, and will actually be set back, if a half-baked scheme is introduced. Time is running out but SNP/Green Ministers can still pause, undertake an independent review and set Scotland on the path to securing the benefits DRS can deliver.”

Is the scheme ‘half baked’?

The £22million package of support from Circularity Scotland includes:

• Up front charges removed for lower sales volumes
• Improved payment terms for lower sales volumes
• Simple labelling option for niche products, alleviating administrative burden

The support package is particularly designed to help SMEs, who have previously voiced concerns about the impact of the scheme on their business’ cashflow.

Circularity Scotland state:

“To address these concerns, Circularity Scotland is removing the day one and month one charges for all producers, up to a threshold of three million units per year. It is also providing two month credit terms on deposits and fees up to the same volume threshold to reduce the working capital impact on all producers.

“The three million unit threshold has been established to ensure that the thousands of smaller scale producers selling in Scotland benefit more proportionately from the cashflow support. This will particularly help companies like craft brewers, wine importers and craft spirit producers. The two month credit terms will be made available to all producers, regardless of their size, ensuring all producers within the scheme are treated equally.

“Circularity Scotland has also confirmed that it will be offering the option to use self-adhesive barcode labels for producers placing less than 25,000 units per year of a specific product on to the Scottish market. This will provide a simple and straightforward administrative solution for independent producers and importers for whom the cost of changing packaging to introduce new barcodes could be prohibitive.”

Friends of the Earth Scotland have welcomed the news that small businesses will be supported. Kim Pratt, circular economy campaigner at Friends of the Earth Scotland, said:

“The announcement demonstrates commitment from Circularity Scotland and the businesses they represent to start the scheme on time in August 2023, and we’re pleased to see that support is being given to smaller businesses to address their concerns.

“This announcement should end calls for further delays. To undo the building momentum for the scheme would be counterproductive for producers and retailers planning for an August introduction, as well as risking further environmental pollution from discarded drinks containers.

“It is fundamental to the long-term success of the scheme that the costs of Scotland’s  Deposit Return Scheme come from industry. Part of the purpose of a scheme like this is to make sure the responsibility for cleaning up is held by the companies that are producing the waste, rather than from the public purse, as is currently the case.”

Circularity Scotland Ltd are currently the only approved scheme administrator. They are an industry-led, privately owned and not-for-profit enterprise.

David Harris, Chief Executive of Circularity Scotland said: 

“Circularity Scotland was established by industry to meet their obligations under the deposit return scheme as efficiently and cost-effectively as possible. This announcement is further evidence of how we are continuing to innovate and identify additional ways to mitigate the pressure on businesses. We know that smaller producers in particular have been concerned about the cashflow impacts of the scheme, and these measures will address those concerns.

“Circularity Scotland has successfully secured over £100m of third-party funding to establish the infrastructure of the deposit return scheme, with only minimal up-front funding from the very largest producers. This funding approach allows producers both large and small to benefit on equal terms from this investment in world-class infrastructure and leading-edge technology and only pay their share of the costs once the scheme is in operation.

“We have already announced reductions in producer fees of up to 40%, while also being able to offer the highest return handling fees of comparable schemes anywhere in the world. These additional support measures further demonstrate our confidence in being able to deliver ongoing operational efficiencies once the scheme has gone live. We are committed to ensuring that the deposit return scheme works for Scotland, is cost effective for business and helps protect our environment for generations to come.”

Businesses looking for more information on these measures or how they can register for the scheme should contact Circularity Scotland’s customer support team at www.circularityscotland.com or on 0141 401 0899.

Fiona Grahame