The Single Use Carrier Bags (Scotland) Amendment Regulations 2021: business and regulatory impact assessment

4.0 Options

33. To ensure that an amendment to the Single Use Carrier Bags (Scotland) Regulations to increase the minimum SUCB charge from 5p to 10p is the correct measure for Scotland, alternative options have been considered and compared.

34. The alternative options need to contribute to four objectives:

• Ensure the reduction in SUCB use to date is maintained and further reductions are achieved 
• Support additional reductions in littering behaviour 
• Increase materials and carbon savings 
• Reduce waste sent to landfill 

35. A higher financial charge on SUCBs would make these products more expensive and could therefore reduce total consumption. It is thus expected to deliver on the stated objectives. The options considered therefore are:

• Option 1. No policy change – business as usual.
• Option 2. Amending Single Use Carrier Bags (Scotland) Regulations, increasing mandatory SUCB charges to 10p.

36. An outright ban on the sale of SUCBs has not been considered. The Scottish Government recognises the role that an SUCB can play in unplanned purchasing and that alternative bags, such as BfLs, can have a higher carbon cost when used for this purpose. Additionally, the Scottish Government recognises that certain groups of people, including some individuals with cognitive impairment and neurodevelopmental conditions, can find it hard to remember to bring their own bag each time they shop, so may be disproportionately disadvantaged by an outright ban.

37. An evaluation of these options was performed on a qualitative basis and draws upon experience from other countries, as information on the number of plastics bags sold in Scotland is not available. 

4.1 Option 1. No policy change – business as usual. 

38. This option is the baseline against which the costs and benefits of the amendment to the Single Use Carrier Bags (Scotland) Regulations are compared. In the absence of further policy changes, all retailers are obliged to charge customers at least 5p for SUCBs, excluding bags which are exempted from the charge. 

39. As shown in Table 3 below, major supermarkets in the UK have already taken measures beyond the 5p charge. These supermarkets together have a UK supermarket industry share of around 94%.^[29] However, the SUCB regulations apply not only to supermarkets but all food and non-food retailers so these findings cannot be extrapolated to other retailer segments. It is also not clear whether smaller retailers in Scotland have also taken additional voluntary measures. 

40. At present, retailers can charge more than the statutory minimum for SUCBs and some of the larger retailers do so. It is not known whether more stores will choose to bring in their own charges in the future, so consumption of SUCBs on a per capita basis may remain constant at current levels, with absolute consumption increasing over the years in line with projected population growth. Alternatively, retailers which currently charge more than the minimum could reduce their charge to the minimum, which could lead to a rise in the purchase of SUCBs Equally, businesses may take voluntary action and either increase charges or eliminate SUCBs from their stores altogether.

41. There is also a possibility that per capita consumption could increase at a rate higher than population growth, meaning that absolute consumption of SUCBs increases. This may happen in the following cases: 

i. Removal of voluntary measures: Retailers who currently voluntarily charge more than 5p for SUCBs may choose at any time to revert to the statutory charge. 

ii. Inflation: The effect of inflation can be such that, over time, the cost of the SUCB charge reduces in real terms. This means that without periodic increases, the charge will lose its effectiveness. 

42. In the Republic of Ireland, a charge of €0.15 (£0.09^[30]) per disposable plastic bag was introduced in 2002. This saw plastic bag use drop significantly within the first years. However, over time bag use increased again, in response to which the charge was increased to €0.22 (£0.15^[31]) in 2007.^[32] 

43. It is not likely that Option 1 would deliver against the policy objectives, as progress depends solely on voluntary action by retailers. Experience from other countries, including Northern Ireland and England, shows that without progressive increases of the SUCB charge, per capita consumption of these bags may increase over time. This could lead to an increase in the direct and indirect cost of SUCB litter. 

4.2 Option 2. Amending Single Use Carrier Bags (Scotland) Regulations, increasing mandatory charges for single-use carrier bags to 10p. 

44. This option includes an amendment to the Single Use Carrier Bags (Scotland) Regulations 2014 to increase the minimum financial charge on SUCBs from 5p to 10p. This increase would apply to all SUCBs, although certain uses of carrier bags would continue to make them exempt from the charge, for instance bags used solely to carry raw unpackaged meat or vegetables. Additionally, the increased charge would continue to apply to all retailers in Scotland. With the exception of increasing the amount of the SUCB charge, no other changes are proposed in the Single Use Carrier Bags (Scotland) Regulations 2014.

45. It is expected that the increase would ensure that the reduction in SUCB use to date is maintained, and that it could drive additional reductions. Compared to Option 1, this would lower SUCBs’ contribution to Scotland’s material use and carbon footprint, and to litter and its associated environmental impacts, particularly in the marine environment. 

46. As many retailers are either already charging 10p or more for SUCBs or have removed them completely, it is not expected that the proposal would result in significant costs for Scottish retailers or other stakeholders. 

47. Sectors and groups affected. 

• Environment: It is expected that there will be a net environmental benefit from a reduction in SUCB use and from the increase in the use of BfLs as a result of the charge increase. However, this can only be the case if BfLs are reused often enough to reduce their environmental impact in terms of material use and production emissions per use below that of a SUCB. This is because each type of carrier bag is designed for a different number of uses, with those that last longer requiring more resources in their production. In its meta-analysis of seven Lifecycle Assessments, the UN Environment Programme found that the environmental impact of carrier bags differs significantly, using indicators such as contribution to climate change, acidification, eutrophication, photochemical ozone creation, abiotic resource depletion, water use and littering potential. The study found that the environmental impact of carrier bags depends heavily on the number of uses, where reusable LDPE bags (plastic BfLs) can have a lower climate impact than conventional plastic SUCBs if they are used 5-10 times more than SUCBs, while cotton bags would have to be used 50-150 times. 
  Although the Scottish 2015 Post-Implementation Review found that, despite increased use of BfLs and small bin liners, 2,500 tonnes of CO2eq were saved within one year, concerns have been raised that BfLs may not be reused often enough and their consumption is increasing rapidly. A report by EIA and Greenpeace^[33] suggests that BfLs are now often considered to be a single-use option, and data published by retailers in England indicate mixed developments, with the number of BfLs sold by some retailers are reducing, while one retailer indicated an increase of 440%.^[34] However, reporting on the sale of BfL is not mandatory and it is not clear how complete this information is. 
  A further benefit would be the reduced disamenity impact of litter, and the direct cost of litter clean up, as there are likely to be fewer littered SUCBs. This expectation is based on the observations made by the Marine Conservation Society regarding the reduction in the number of SUCBs found on UK beaches following the introduction of the charge.^[35] There are also likely to be benefits to wildlife in the marine and terrestrial environment with less damage to organisms from fewer littered bags or pieces of bags. 
• Retailers: An increase in the SUCB charge will not result in a cost increase for retailers. The main impacts on retailers are the administrative costs of increasing the charge and, for retailers with more than 10 employees (FTE), the keeping of records on the number of SUCBs sold with a requirement of keeping these records for a minimum of five years. Costs may also be associated with voluntary reporting of carrier bag uptake and associated funds via the carrier bag portal^[36]. However, many larger food retailers have already increased charges on a voluntary basis and would not incur additional costs. Additionally, retailers can recoup any reasonable costs from the proceeds of the SUCB charge^[37], although they are encouraged to donate any net proceeds to charities and environmental causes. For BfLs, the costs associated with procurement and logistics will be reflected in the price charged to consumers for buying a BfL at the till point. As retailers can recoup any costs from having to buy fewer SUCBs and more BfLs there should be no negative impact on retailers, but the impacts instead apply to consumers.
• Consumers: Customers who currently receive SUCBs at a charge of 5p would have to pay more (10p) for these bags. After the charge is increased, more consumers are expected to switch to reusable BfLs instead of the equivalent volume of SUCBs necessary to carry their shopping. Consumers may be inconvenienced by a higher charge for SUCBs in stores where these have not already been phased out, or by a higher charge for BfLs, but this can be mitigated by a behavioural shift towards increased re-use of bags. 
• Carrier bag manufacturers/distributors: These businesses will be impacted, mainly through the net impact of reduced activity related to SUCB use and increased activity related to BfL and bin liner use. 
• Government: There will be no additional annual costs for the Scottish Government to increase and manage the enforcement of the carrier bag charge. For the UK Government, changes in revenues from VAT paid on the higher charge will depend on SUCB and BfL purchases after the increase of the SUCB charge, as well as voluntary measures to increase the charge above 10p which would affect VAT receipts. 
• Charitable and environmental associations: The net proceeds from the sale of SUCBs are treated here mainly as a ‘transfer’ between economic agents: from consumers to charitable and environmental associations. This is because many retailers have chosen to donate their proceeds from the charge, amounting to £2.5 million in 2019.^[38] An increase in the SUCB charge is expected to translate into a proportional increase in contributions to charitable and environmental associations. The scale and likelihood of benefits materialising in Scotland varies depending on which associations receive the net proceeds and how these associations choose to use the funds.  

48. Option 2 is the preferred option.