Deposit return scheme for Scotland: accompanying statement

Overview of The Regulations

6. The Deposit and Return Scheme for Scotland Regulations 2020 are to be made in exercise of the powers conferred by sections 84, 89, 90 and 96(2) of the Climate Change (Scotland) Act 2009.

7. The main policy driver for the Regulations is to promote and secure an increase in recycling of materials, forming part of the Scottish Government's response to the global climate emergency.

8. The Scottish Government is committed to creating a more circular economy where products and materials are kept in a high-value state of use for as long as possible – maximising resources to benefit the economy and the environment. We recognise that fresh interventions are needed to bring about the systemic and behavioural change necessary to fulfil these aspirations.

9. It was against this backdrop that in the 2017-18 Programme for Government, the Scottish Government announced its intention to introduce a Deposit Return Scheme (DRS) for drinks containers for Scotland. Many other countries operate similar schemes, including:

• Croatia
• Denmark
• Estonia
• Finland
• Germany
• Iceland
• Lithuania
• Netherlands
• Norway
• Sweden

10. An extensive programme of consultation and stakeholder engagement followed the Scottish Government's announcement and on 8 May 2019 Scottish Ministers published "A Deposit Return Scheme for Scotland: Full Business Case Stage 1".^[3] That document ("the FBC") identifies the Scottish Government's preferred scheme design for DRS. The Regulations take account of the scheme design set out in the FBC.

11. That design enables consumers to take single-use containers back and redeem a 20p deposit from any retailer selling drinks covered by the scheme. This is within the range of deposit levels adopted by successful international schemes, adjusted for inflation.

12. The scheme will include plastic bottles made from polyethylene terephthalate ("PET plastic", which is the most common type of bottle for products such as fizzy drinks and bottled water), aluminium and steel cans and glass bottles.

13. Businesses that sell drinks exclusively to be opened and consumed on-site, such as pubs and restaurants, will have the choice whether to charge the deposit to the public and will only be required to return the containers they sell on their own premises.

14. Online retailers will be included in the scheme. This means that those customers who are dependent on online delivery, because for any reason they are unable to travel to shops, will be able to easily get back the deposits paid on containers.

15. Non-retail spaces will be able to act as return locations. These could include recycling centres, schools or other community hubs. While retailers will be required by legislation to provide a return service unless exempted, non-retail spaces will operate on an opt-in basis.

16. Retailers can choose to install reverse vending machines (RVMs) to collect the bottles and cans and return deposits. Alternatively, they will have the option to return deposits over the counter, collecting the containers manually.

17. Specifically, the Regulations:

• Prohibit the marketing or sale to consumers of single-use drinks in containers made of polyethylene terephthalate (PET plastic), steel, aluminium or glass which are ultimately intended for retail sale in Scotland, if the producer of those articles is not registeredwith the Scottish Environment Protection Agency (SEPA). Theproducer is either the brand owner (for products branded in the UnitedKingdom) or the importer (for products branded outside the UnitedKingdom).
• Require that a 20p deposit is applied each time one of those single-use drinks containers is sold in Scotland. The seller must also make clear that the packaging can be returned in exchange for reimbursement of the deposit. These obligations do not apply to products sold in export (duty-free) shops, on hospitality premises where a closed loop exists, or for sale to a consumer outside Scotland.
• Require producers to collect a target percentage of the scheme packaging which they place on the market in a calendar year, by collecting their own scheme packaging from retailers and return points, and accepting the return of their scheme packaging from wholesalers. Producers will reimburse deposits for any packaging returned or collected.
• Provide for targets which will increase over the first three years of the scheme's operation (70% in year 1, 80% in year 2 and 90% in year 3). This approach builds on the experience in other countries which have successfully introduced similar schemes.
• Provide for producers to appoint a scheme administrator to meet the above obligations on their behalf. Anyone seeking to act as a scheme administrator must be approved by the Scottish Ministers.
• Require retailers to operate a return point at premises from which sales of scheme products are made. This involves accepting (subjectto certain exceptions) packaging returned by consumers, reimbursingdeposits for that packaging and retaining the packaging for collectionby or on behalf of producers.
• Provide that, where specified criteria are met, the Scottish Ministers may exempt a retailer from acting as a return point and may approve any other person who wishes to act as a return point.
• Require retailers selling products by means of distance sales (e.g. through an online grocery sale and delivery service) to provide takeback services from the site of delivery to consumers who have purchased those items.

18. The Scottish Government is satisfied that the Regulations fall within the competence of the Scottish Ministers and are compliant with EU law. To the extent they have the potential to impact on free movement of goods, the Scottish Government considers that they are proportionate and justified on environmental grounds. Similarly, the Scottish Government is satisfied that the Regulations are fully compliant with the European Convention on Human Rights. The different treatment of actors in the scheme has a purpose and does not amount to discrimination under the ECHR.