Deposit return scheme consultation: analysis of responses

11 Infrastructure and logistics (Q27–Q29)

11.1 The consultation paper discussed the different physical components of a DRS. These included (i) the method by which people can return their bottles and other containers (either through a reverse vending machine (RVM) or manual over-the-counter take-back arrangements), (ii) counting and bulking centres, and (iii) the logistics of transporting material from return locations to counting and bulking centres. The consultation paper also discussed the potential job opportunities that these various components might create.

11.2 Respondents were asked about three aspects of DRS infrastructure and logistics:

Question 27: Which sorts of take back do you think the system should include? [Reverse vending machines / Manual take back / Combination of the two]

Question 28: How should the handling fee paid to retailers be calculated?

Question 29: Do you agree with the assessment of the potential job creation of between 12 and 116 jobs? Please explain your reasoning.

Type of take back system used by the DRS (Q27)

11.3 Question 27 was a closed question asking for views about the sort of take-back arrangements the DRS should have. Three options were offered: (i) RVMs, (ii) manual take-back, or (iii) a combination of the two. (This question did not include space for comments.)

11.4 Table 11.1 shows that a large majority of respondents (83%) thought the system should allow for a combination of manual take-back and RVMs. Moreover, there was general agreement among organisations and individuals on this issue, although organisations were even more strongly in favour of a mixed approach than individuals (94% vs 82%). One in seven (15%) of individual respondents favoured RVMs on their own, compared to just 6% of organisations.

Table 11.1: Q27 – Which sorts of take back do you think the system should include?

	RVMs		Manual take back		Combination of the two		Total
Respondent type	n	%	n	%	n	%	n	%
Public sector organisations	2	9%	–	0%	20	91%	22	100%
Food and drink producers	–	0%	–	0%	21	100%	21	100%
Charities	–	0%	–	0%	12	100%	12	100%
Retailers	1	7%	–	0%	14	93%	15	100%
Recycling / waste mgmt orgs	–	0%	–	0%	14	100%	14	100%
Packaging manufacturers	2	17%	–	0%	10	83%	12	100%
Community bodies	1	17%	–	0%	5	83%	6	100%
Environmental consultancies	–	0%	–	0%	7	100%	7	100%
Hospitality and restaurant trade	1	17%	–	0%	5	83%	6	100%
DRS companies	–	0%	–	0%	4	100%	4	100%
Other organisations	–	0%	–	0%	6	100%	6	100%
Total organisations	7	6%	–	0%	118	94%	125	100%
Total individuals	201	15%	37	3%	1,100	82%	1,338	100%
Total (organisations and individuals)	208	14%	37	3%	1,218	83%	1,463	100%

Percentages may not total 100% due to rounding.

Calculation of handling fee to retailers (Q28)

11.5 Respondents made a wide range of both general and specific suggestions on how the handling fee to retailers should be calculated. The four main suggestions were that:

• Retailers should not be paid any handling fee. This was mainly suggested by individual respondents who thought that (i) it was part and parcel of the retailer’s responsibility to deal with the waste which was generated through sales of these products, and (ii) since retailers profited from selling these products they should pay for them to be recycled.
• Retailers should be reimbursed in full for the costs incurred through collecting and recycling containers. Respondents described this variously as the ‘actual cost’ or the ‘true cost’ of participation in the DRS. The costs mentioned by respondents (particularly organisations) included: (i) the costs of ‘losing’ commercial space which would be required for storage of returned containers and / or for RVM machines, (ii) staff costs arising from the time required for processing and handling returns, (iii) costs for purchasing and servicing RVMs, (iv) potential reduction in sales due to the DRS, (v) labelling costs, (vi) transport costs associated with taking the returned containers to a suitable central location, and (vii) the requirement for new security measures. Some respondents suggested that in addition to a requirement for ‘cost recovery’, retailers should be paid a small incentive to participate in the scheme.
• Retailers should be paid a flat fee for participating in the scheme. It was often suggested that this fee should be set at different levels for retailers who were operating a manual take-back scheme as compared to those who were operating an automated (RVM) type return system. This differentiation would recognise the different costs incurred depending on the method of collection and / or the different quality (in terms of sorting and compacting) of the recyclate. Whilst some respondents argued that small retailers without RVMs should be paid more – because manual handling incurred more costs – other respondents argued that retailers with RVMs should be paid more given the higher quality of the recyclate.  
• Retailers should be paid a variable fee. In general, those who suggested this thought the fee should vary according to (i) the number, (ii) the volume (by weight or cubic metres), (iii) the value / quality (i.e. the price leveraged for the recycled materials), and / or (iv) the time taken to process the returned containers. However, a minority of respondents wished to link the variable fee to the proportion of the containers which were returned (i.e. to the ‘return rate’.) Some respondents went on to specify the level of the variable fee. Different suggestions were that this could be ‘a proportion of the deposit’ (5%, 10%, 40%, 50% and 100% of the deposit were all suggested) or ‘a proportion of the revenue of the collected materials’.

11.6 In addition, it was common for respondents to say that the handling fee should be made up of a flat fee (as described in the third bullet point above) combined with a variable fee based on the volume of returns (as described in the fourth bullet point above).

11.7 Irrespective of which of the four suggestions they favoured, it was common for respondents to link their preference to a view that this was the way to ‘make the scheme successful’, ‘to increase the amount of recycling’ or ‘to incentivise the scheme’. 

11.8 Other issues which various respondents addressed in their comments were as follows:

• It was important to recognise the particular difficulties for small retailers, and for those based in rural locations. The handling fees for these retailers might have to be higher to ensure fairness. Indeed, occasionally respondents suggested that only these types of retailers should receive handling fees (or that large retailers should not receive handling fees).
• RVMs are very expensive to obtain and needed to be funded upfront by the scheme administrator.
• It was appropriate for retailers to cover their costs, but ‘abuse through profiteering’ was not acceptable.
• Non-retailers should get a higher handling fee for ‘hosting’ an RVM than a retailer because for those organisations (schools, leisure centres, etc.) this represented a public service they were providing.
• Handling fees should be different for different product categories.
• The handling fees should be determined by the scheme administrator / the management company and reviewed on a regular basis.
• The calculation of the handling fees should be informed by ‘best practice’ in relation to other schemes already in operation.
• More investigation was required into the best way to calculate handling fees.

11.9 It should be noted that it was also common for respondents, especially individuals, to say they ‘didn’t know’, were ‘unsure’, or had ‘no idea’ how handling fees should be calculated. 

Assessment of potential job creation (Q29)

11.10 The consultation paper suggested that an estimated 12 to 116 jobs could be created to support the functions of the counting, sorting and bulking centres. Question 29 asked respondents if they agreed with this assessment of the job creation opportunities provided by a DRS in Scotland.

11.11 Nearly half of respondents who addressed this question answered ‘don’t know’. Among those who provided further comments, there were five main types of response:

• It is not possible to form a judgement on whether these figures are reasonable.
• The number of jobs created are likely to be higher than the estimates suggest.
• There would also be job losses; the focus should be on the net effects on employment.
• Any job creation would be welcome.
• A DRS is not primarily concerned with job creation.

11.12 Each of these types of responses is described in more detail below.

Not possible to form a judgement on the estimates for potential job creation

11.13 It was common for both organisational and individual respondents to say that it was not possible to form a judgement on whether the estimates for potential job creation (of between 12 and 116 jobs) were reasonable. Respondents highlighted that:

• The number of jobs that would be created would depend on the type of DRS implemented, and in particular on the degree of automation introduced. Given that the type of DRS to be adopted was not yet known, it was not possible to predict the impact on jobs.
• The range offered (12 to116) lacked precision. Some respondents argued the range was so broad as to be meaningless.
• There was no information set out in the consultation paper to justify or explain how these numbers had been reached.
• It was not reasonable for respondents to be asked to comment on such complex technical assessments.
• The introduction of a DRS was complex, and it would take a long time once the system was established to assess the impacts on job creation; these could not be predicted in advance of implementing the scheme.

Number of jobs created are likely to be higher than the estimates given

11.14 It was also common for respondents, particularly individuals, to say they thought the number of jobs created would be higher than the high end of the range suggested (116). These respondents often went on to elaborate the range of jobs which would be required to implement a DRS including those associated with: manufacturing and servicing RVMs; transportation arrangements; collecting, sorting, and cleaning returned containers; and administration. It was thought that many hundreds of jobs – perhaps even thousands – would be required to operate the scheme successfully across Scotland. Research from the Campaign to Protect Rural Scotland, and also from Denmark and New Zealand was cited in support of these higher estimates.

Job creation estimates should take into account possible job losses

11.15 It was common for organisational respondents, especially food and drink producers, retailers, packaging manufacturers, recycling and waste management organisations and public sector organisations, to discuss the jobs which may be lost when a DRS was introduced, as well as the jobs created. These respondents thought any new jobs created would be the result of ‘displacement’, and they argued that the focus should be on the net impact on jobs not on job creation per se. Respondents talked about ‘unintended consequences in other parts of the supply chain’, and they highlighted the lack of consideration in the document of (the employment relating to) current recycling processes. A range of respondents cited research from Germany which indicated that the introduction of a DRS had a negative overall impact on jobs in that country. Some individual respondents also discussed job losses as a consequence of introducing a DRS; in general, these respondents focused on the negative impacts on local authority employment if a DRS was introduced. 

Any job creation would be welcome

11.16 Less often, respondents (particularly individuals) simply said that a DRS will create some new jobs. These – however many – were vital and would be welcomed. Respondents highlighted research from Norway, Estonia, South Africa and Lithuania which indicated a fairly small number of additional jobs (consistent with the kind of numbers suggested in the questions) had been created.

A DRS is not primarily concerned with job creation

11.17 Very occasionally, respondents emphasised that the rationale for introducing a DRS was based on achieving objectives in relation to recycling and reducing littering. Thus, any impacts on job creation were of secondary importance.