Slater concedes DRS ‘cannot go ahead as planned’

Scheme administrator now looking at ways forward ahead of the planned launch date next March

Scotland's planned Deposit Return Scheme (DRS) "cannot go ahead as currently planned", the minister in charge of it has admitted.

Lorna Slater said the scheme - which was to have been the first of its kind in the UK - had been "shot down by Westminster".

First Minister Humza Yousaf has already warned the UK Government's insistence that glass should not be included in the Scottish scheme puts the future of the environmental initiative in "grave danger".

He had set a deadline of Monday for the UK Government to change its mind over the key issue.

When that did not happen, Circular Economy Minister Slater told MSPs: "It is clear that Scotland's Deposit Return Scheme, in the scope and form passed by this Parliament, cannot go ahead as currently planned."

She, together with Circularity Scotland - the company set up to administer the scheme - were now "looking at how we can take an alternative scheme forward in Scotland, because the one that this Parliament passed has been shot down by Westminster".

Slater added she was seeking urgent talks with politicians at Westminster – but said the intervention from the UK Government had also created "significant uncertainty" around other parts of the scheme as passed by Holyrood.

This includes whether the deposit to be levied on drinks cans and bottles - which would be returned to shoppers when the empty containers are brought back for recycling - would be set at 20p.

Pressed on the future of DRS at Holyrood, Slater said: "Right now, we are urgently establishing to what extent there is a way forward for a modified scheme, its scope, terms and timescales.

"That crucially depends on whether the UK Government can provide timely, stable and reliable assurances on basic operational matters, such as trading standards, the 20p deposit and producer fees.

"It also depends on to what extent there is industry support for an alternative scheme."

Asked by Conservative MSP Graham Simpson if a "modified" DRS, without glass bottles in it, could be up and running by the current launch date of March 2024, Slater told him removing these from the remit of the scheme was a "substantial change".

She added: "To decide whether we can go ahead with an alternative scheme without glass is a very substantial decision."

Slater said she and Yousaf would be meeting with industry representatives on Wednesday to discuss this as part of efforts to "decide whether it is feasible for us to go forward".

Circularity Scotland has already made clear it can "absolutely" go ahead with the scheme without glass bottles being included.

Small business leaders, meanwhile, claimed that while DRS was "well intentioned", the scheme was "fundamentally flawed".

Andrew McRae, Scotland policy chair of the Federation of Small Businesses, said: "As time went on, it became apparent it wasn't going to work in its current form and was going to damage small producers and retailers on its way down.

"We now need to get on with developing a system that stands a better chance of working – one that makes it as easy as possible for consumers, producers and retailers.

"Key to that will be learning the lessons from this episode and bringing the sort of small businesses, on whom government will be relying to deliver any such scheme, in on the ground floor."

While the Scottish Government was seeking to bring in its DRS in March next year, similar initiatives for the rest of the UK are not planned until 2025 at the earliest.

The Deposit Return Scheme (DRS) has become the latest political battleground between the Scottish and UK governments.

Essentially a plan to boost recycling, it aims to reduce littering and improve the environment. However, some businesses have voiced concern about the impact it will have on them.

Wrangling over its introduction has led to claim and counter-claim from politicians in Edinburgh and London.

So, first of all, what is the DRS?

Under the scheme, consumers will pay an extra 20p deposit on the container when they purchase a drink in shops. This deposit would be returned when the container is handed back, either at a shop or a reverse vending machine.

Details of the scheme were first drawn up by the Scottish Government in 2019, including the target materials of glass, PET plastic and cans.

Circular Economy Minister Lorna Slater, a Green MSP who joined the Scottish Government after the last Holyrood election, is overseeing the introduction of the DRS.

However the scheme administrator is Circularity Scotland – a not-for-profit company funded by the drinks industry rather than a Government agency.

What do businesses think about DRS?

Some business groups in Scotland were vociferous in their opposition to the initial proposed launch date of August 2023.

The Scotch Whisky Association has raised concerns about the inclusion of glass.

In November 2022, hundreds of business leaders in the drinks and hospitality sectors called on Slater to pause and revise the scheme, saying the August 2023 date was not realistic.

The Scottish Conservatives also called for the scheme to be delayed, and they called on SNP backbenchers to support the move at Holyrood.

However, other business groups, including the trade body for soft drinks, backed the DRS.

Why was it delayed?

The SNP leadership election earlier this year led to Humza Yousaf becoming First Minister, replacing Nicola Sturgeon.

In April, he announced the DRS launch would be delayed to March 2024 as part of a "reset" between government and business.

But he also blamed the UK Government for creating uncertainty around the scheme by delaying an exemption under the Internal Market Act (IMA).

This post-Brexit law seeks to govern trade around the UK.

What did UK ministers want to change?

Initially, the UK Government said Scottish ministers had not formally applied for an exemption, something the SNP and Scottish Greens strongly disputed.

In May 2023, UK ministers decided the scheme could go ahead but the glass element of DRS was not granted an exemption under the IMA.

Including glass would create "permanent divergence" in the market, UK ministers argued, as a planned DRS scheme in England will not encompass glass bottles.

How did the Scottish Government react?

The Scottish Government said the refusal to allow glass in its DRS undermines devolution, with Westminster accused of intruding on measures agreed by Holyrood.

Slater said it was an attempt to "sabotage" the Scottish DRS, while Yousaf said it will be "extremely difficult" for the scheme to go ahead without glass.

However, the head of Circularity Scotland has said it is possible for the DRS to launch without glass.

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