Deposit return scheme for Scotland: SEA

5. The reasons for choosing the preferred DRS option, in the light of the other reasonable alternatives dealt with

The selection of the preferred DRS option reflects the evidence gathered, the assessments undertaken, the results of modelling and the consultation findings.  The development of the final DRS design option is in full compliance with the HM Treasury Five Case Model and Impact Assessment^[21]. The rationale for its selection is presented in the Full Business Case. 

5.1 Reasons for choosing the preferred DRS option

5.1.1 The final design of the DRS has been selected to balance environmental benefits with commercial viability – and technical practicalities.  Features of the selected DRS model include:

• a focus on the collection of PET bottles, steel and aluminium cans and glass bottles;
• return to retail for convenience; 
• 20p deposit to incentivise participation; 
• an obligation on producers to fund the scheme thus encouraging continuous monitoring and operational improvement; 
• national coverage (both urban and rural).

5.1.2 A comprehensive suite of modelling, undertaken by Zero Waste Scotland, shows that the preferred DRS option could deliver an increased capture of the target materials of over 90%.  The preferred DRS option will lead to a significant reduction in littering rates of collected materials and will also reduce carbon emissions.  This is documented in the Full Business Case Stage 1.

5.1.3 Zero Waste Scotland has engaged extensively with DRS operators and regulators across the world. Feedback from systems overseas, and experience at site specific schemes in the UK, show that material quality for targeted materials is very high compared to other collections methods.  Although this evidence is qualitative rather than quantitative, no counter-examples have been identified at any point in the research.

5.1.4 The Scottish Government has undertaken extensive public consultation on the DRS, with the majority of respondents identifying that a DRS offers a positive opportunity for Scotland’s environment.  Two risks (low participation and accessibility) were highlighted by respondents, who considered that either could affect the performance of a DRS.  The design of the preferred DRS has taken these concerns into account and they will be mitigated by adopting a return to retail model that is national in scope and local in availability, provides an attractive deposit level, and can be integrated into consumer habitats.

5.1.5 The selected DRS model also aligns with the recommendations raised by respondents:

• ensure consumer awareness: a comprehensive campaign of consumer information will be provided in advance of the scheme launch (and for the duration of its operation) to help and inform consumers and support sustained use of the scheme;
• ensure ease of access/ease of use: a return to retail model has been selected in preference to a scheme that requires material being returned to dedicated sites in order to ensure that the DRS is national in scope and local in availability, with return points sited to maximise convenience to users;
• ensure national coverage: adopting the return to retail model provides a wide range of locations across Scotland (both urban and rural) where target materials can be returned.  Principles for co-operation on DRS have also been agreed with other governments^[22];
• ensure it pays: the DRS provides a financial incentive to return target material, and a financial penalty should customers choose not to;
• ensure it is regulated: the DRS will be implemented by regulation and supported by a monitoring and evaluation framework;
• ensure local authority involvement: the development of the DRS has involved engagement with a variety of sectors including local government and the Scottish Government will expect the scheme administrator to work collaboratively with local authorities to realise benefits where possible.

5.1.6 While HDPE, single use cups and beverage cartons also contribute to the four objectives of the DRS there were specific concerns identified in the Outline Business Case (OBC) and public consultation that have resulted in their exclusion. For all three materials, the Full Business Case Stage 1 identified that there were no national schemes that used a primarily automated (RVM) collection approach which included these three materials. Furthermore, the results of the wider consultation and stakeholder engagement process show that the commercial risks of capturing drinks cartons /cups would outweigh the benefits. 

5.1.7 In addition, the January 2019 Scottish Budget announcement signalled support in principle for the use of charging and other measures to reduce the use of single-use disposable cups.

5.1.8 HDPE is primarily used for dairy products and there was the lowest support (53%) for including this in the scheme. Concerns primarily centred around perceived hygiene risks which could impact on participation in the scheme. As it is primarily used for dairy products there is limited potential for market distortion by excluding HDPE. In addition, cartons are primarily used in dairy, dairy alternatives and fresh juice categories, so again there is limited scope for market distortion especially when combined with excluding HDPE.

5.2 Reasons for the rejection of reasonable alternatives

5.2.1 The preferred DRS option has been identified as the optimal configuration of component features, maximising environmental benefit while balancing technical limitations and economic considerations.

5.2.2 Conversely, while many reasonable alternative configurations of the twelve DRS components were shown to produce environmental benefits, none were found to achieve a superior balance of outcomes, and therefore were rejected. For a full account explaining how the preferred DRS Option was developed, refer to the Full Business Case.