Deposit return scheme - gateway review: final report

5.0 Background

5.1 Aims of the Programme:

5.1.1 In September 2017, the Scottish Government announced in the Programme for Government (PfG) that it would move to implement a Deposit Return Scheme (DRS) for Scotland for single-use drinks containers. Protecting Scotland's Future: the Scottish Government's programme for Scotland 2019-2020 reinforced this commitment following public consultation. The views shared via the consultation helped to design a system tailored to meet Scotland's specific needs, and with the specific aims of increasing recycling rates and reducing littering. This commitment was reiterated in the September 2021 PfG.

5.2 Driving force for the Programme:

5.2.1 DRS has a number of objectives; it is proposed that a Scottish DRS will:

• Increase the quantity of target materials collected for recycling.
• Improve the quality of material collected, to allow for higher value recycling.
• Encourage wider behaviour change around materials.
• Deliver maximum economic and societal benefits for Scotland.

Achieving these strategic objectives will help Scotland progress towards its 2025 waste targets, accelerating Scotland's transition from a 'linear' economy which is environmentally unsustainable and energy and resource intensive, to a more resource efficient and sustainable circular economy.

5.2.2 Growing global and national populations are expected to increase commodity price volatility and constraints on resources availability, which could lead to adverse social and economic effects. Adoption of circular economy measures like a Scottish DRS should help to provide resilience to such shocks and constraints, and aid in delivering significant environmental benefits and economic opportunities.

5.2.3 By placing a financial value on selected single-use drinks containers, a DRS will encourage consumers to return them for recycling, reducing the likelihood that they will end up as litter and increasing the likelihood they will be recycled. This will, in part, help to address a growing global concern about the volume and impact of plastic pollution, particularly in marine landscapes. Separate and material-specific collection of selected packaging materials under a DRS will also generate higher quality, higher value material streams.

5.2.4 The introduction of DRS will have an impact on businesses in Scotland. As a form of producer responsibility, it requires those businesses to take responsibility for the environmental impact of their products and for the costs of managing products at end of life. A system of producer responsibility for packaging has been in place in the UK since 1997 and that system has helped to drive significant increases in recycling. However, the rate of progress suggests further interventions are needed and the European Commission with reference to its Circular Economy Package, supports DRS as an effective response to the challenges faced.

5.2.5 The UK Department for Environment and Rural Affairs (DEFRA), Welsh Government and Department of Agriculture, Environment and Rural Affairs in Northern Ireland consulted on a potential DRS for England, Wales and Northern Ireland in 2021. Enabling provisions were included in the UK Environment Act which became law in November 2021.

5.3 Procurement/delivery status:

5.3.1 The Programme to design and implement a DRS for Scotland commenced in September 2017. Following extensive public consultation and industry engagement through an Implementation Advisory Group, a scheme design and Full Business Case, Phase 1, were developed, receiving Cabinet approval prior to public announcement on 08 May 2019. Legislation to establish the Scheme was laid down in The Deposit and Return Scheme for Scotland Regulations 2020 (the Regulations) which was passed by Parliament on 13 May 2020. The Regulations allow producers to establish a Scheme Administrator (SA) to meet the obligations on their behalf. In March 2021 an application was received from Circularity Scotland Limited (CSL) to be approved as the centrally important SA. Following a managed assessment process, CSL's application received formal ministerial approval on the 24 March 2021.

5.3.2 Originally the Regulations required that DRS 'producers' be registered with SEPA by 01 March 2022 and that DRS should be fully operating (go-live) by 01 July 2022. However, on the 14 December 2021 the Minister for Green Skills, Circular Economy and Biodiversity announced that the Scottish Government would seek to change the full implementation date (go-live date) for DRS to 16 August 2023 in light of the impact of COVID-19 and EU Exit. This amendment of the Regulations came into force on the 25 February 2022.

5.4 Current position regarding previous assurance reviews:

5.4.1 Gateway Reviews were previously carried out on the 25-27th March 2019, 19- 21 November 2019 and the 14-16 June 2021. A follow-up, Assurance of Action Plan was carried out on the 21-23 September 2021.