Earlier this week, Alister Jack, the Secretary of State for Scotland, made it clear that he intends to deny a request from the Scottish government for a trade exemption that might prove to be critical for its Deposit Return Scheme (DRS), a recycling program set to launch later this year.
Whilst Scotland claims that protection of the environment is a devolved issue over which they ought to have complete jurisdiction, the UK believes that the regulations are not compatible with the requirements for the UK’s internal open market.
As the second piece of controversial Scottish policy to be blocked this year, many are wondering whether these constitutional crises were avoidable and whether Westminster is simply determined to prove a point to its stubborn, independence-seeking Northern neighbours.
What is the Deposit Return Scheme?
In 2017, Scotland announced its intention to introduce a Deposit Return Scheme (DRS) that would operate similarly to other deposit-based recycling schemes used across Europe.
The idea behind such a policy is simple. A 20p surcharge will be added to the price of every can or bottle, which a customer will be able to claim back by returning the bottle to a store. This is meant to incentivise recycling of bottles and cans and reduce littering.
The DRS was designed in partnership between the Scottish Government and Zero Waste Scotland, which is a publicly funded organisation that is working to accelerate the circular economy in Scotland.
The logistics of how this scheme would operate in Scotland are still largely unclear, but it would likely see “reverse vending machines” installed in major supermarkets across the country, in addition to manual return points at smaller stores.
Circularity Scotland Ltd, a non-profit private sector enterprise, was set up in 2021 to run the scheme.
In most cases, retailers will pay back customers who return their empty containers with a voucher for their shop. Through the DRS, participating retailers will then be reimbursed for the cost of the voucher as well as for a small handling fee that will cover the operation of the recycling points.
Notably, the scheme is designed to be funded by producers, meaning that the producers of single-use beverage packaging will have to pay a fee for every single-use item they put on the market, which will cover the cost of the scheme’s administration and operation.
This element of the scheme is meant to be an example of a “polluter pays” system, but has led to intense pushback from beverage producers, many of whom claim that the initial costs will be detrimental for smaller producers.
The DRS is intended to be largely self-financing, without any burden to the taxpayer; it is expected that its three funding sources will be unredeemed deposits, revenue from the sale of materials and any producer fees charged by the scheme administrator.
The scheme aims to have 90% of deposit containers returned, but the surplus profit from any bottles which are not returned will help to fund DRS operation.
What is the challenge to a Deposit Return Scheme in Scotland?
Early last week, the Scottish government officially applied for an exemption from the UK’s Internal Market Act to facilitate the DRS. The act stipulates that any product sold in the UK can be sold anywhere else within the UK without adhering to different regulations.
According to this law, any beverage producers outside of Scotland have the right to sell the same product in Scotland as they would in England, Wales or Northern Ireland without having to alter the cost to include the 20p deposit.
This would put Scottish producers at a disadvantage within the Scottish market, because products made in Scotland, which would have to adhere to Scottish regulation, would be sold at a significantly higher price than similar products made elsewhere.
Whether or not this exemption is absolutely necessary to the launch of the scheme has been debated.
The bill’s supporters recently commissioned a legal opinion from Stuart MacLennan, a professor of law at Coventry, who said the scheme could operate without one. However, UK ministers believe the exemption is necessary in order for the scheme to apply to any of the drinks sold in Scotland that are made elsewhere.
When asked about the challenges posed to the scheme by the issue of cross-border trade, member of the Scottish Parliament Lorna Slater, who is the current Minister for Circular Economy and in charge of the DRS rollout, responded:
“Scotland’s Deposit Return Scheme is an ambitious step to protect our environment, and protection of our environment in Scotland is a fully devolved matter. It is right that as the Scottish government and the Scottish parliament has passed these regulations that we take them forward. Meeting net zero isn’t an option; this is something we have to do, and while I am delighted that the rest of the UK is going to be coming along with their deposit return schemes, I’m disappointed by their lack of ambition and by their slow time table, but of course we’re working closely with them to make sure those schemes will be fully interoperable.” (bolding added)
Westminster hasn’t officially rejected the exemption yet, but reports say that Alister Jack is campaigning for cabinet members to refuse Holyrood’s request.
The scheme is currently set to launch on August 16, 2023, after being delayed from its original launch date in July 2022 due to intense lobbying from industry members who claimed that the complications arising from COVID and Brexit made the original launch date impossible.
The initial delay was met with dismay from environmental advocates. The director of the Association for the Protection of Rural Scotland, John Mayhew, claimed at the time that it would result in 173,000 tons of avoidable carbon emissions, 55m pieces of litter and £7.3m in avoidable refuse and street cleaning costs for local councils.
The reports from yesterday have been met with equal outrage from environmental activists.
“Westminster is at risk of dragging the devolved nations down to the lowest environmental standards as they sit on their hands and the plastic crisis worsens around them.”
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What is holding up the UK’s nationwide scheme?
Controversy, concern and outrage have surrounded discussions around deposit return schemes on both sides of the border since they were announced.
The UK announced plans in 2018 for a DRS that would operate seamlessly throughout the four countries of the UK, but five years later the plan still isn’t in operation. In fact, the UK-wide DRS isn’t expected to go live until 2025 and will exclude glass bottles.
Scotland’s original announcement of its plan for a DRS in 2017 only pre-empted Westminster by six months, and at the time, the Westminster government said it would talk to the devolved administrations about working together on the issue.
Nonetheless, six years later, Scotland is ready whilst the UK continues to stall, despite Michael Gove, then-Secretary of State for environment, pointing out in 2018 that “it is absolutely vital we act now to tackle this threat and curb the millions of plastic bottles a day that go unrecycled.”
The Scottish scheme has been a focal point of the Scottish National Party’s (SNP) environmental platform since 2017, but a vocal sect of people have expressed concerns about the policy which has been described as “shambolic.”
There you have it folks. The supposed industry scheme can’t be paused by industry despite industry calling for a pause.
It’s the Scottish Government calling the shots on this shambles. It’s time they took responsibility for the mess they’ve made of deposit return. pic.twitter.com/mo7OJeIKof
— Maurice Golden (@mgoldenmsp) March 10, 2023
Alister Jack has previously criticised the scheme for being badly designed and inflationary, telling the Commons recently that, under the DRS, the price of a 12-pack of Scottish water sold at Aldi would rise from £1.59 to £3.99.
Nonetheless, polling shows that the scheme has the broad support of the general Scottish public, with one poll showing that 72% of those questioned would like to see a DRS introduced throughout the UK.
I am sorry. I am so bloody tired of people refusing to understand how a bottle deposit return scheme works. Refusing to accept that other countries have implemented it. Refusing to accept that it can be implemented in a European country of 5 million people. This is ridiculous.
— James K Puchowski (@kvisleis) February 27, 2023
A large share of the perceived controversy about the policy, the delay to Scotland’s original DRS launch date and the general lethargy of the UK to introduce a nationwide scheme is attributable to intense lobbying from the beverage industry, i.e. the producers of these single-use bottles and cans who are determined not to change the status quo.
It is understood that Tesco, Scotland’s most popular supermarket, and Coca Cola pushed especially hard for the launch date to be postponed until 2023.
Coca Cola has been guilty of this outside the UK as well, as shown in a leaked internal memo which explicitly calls to “fight back” against an “EU scheme for deposit systems,” which was classed as high risk to their business.
And whilst the scheme’s opponents in Scotland are in an uproar over the unprecedented cost, schemes like this operate very well at reducing plastic waste in many countries throughout Europe.
Currently, Croatia, Denmark, Estonia, Finland, Germany, Malta, Norway, Lithuania, and Latvia all have bottle return schemes for which PET bottles, aluminium cans, and glass bottles are eligible. In the Netherlands, Sweden and Slovakia, deposit return schemes operate exclusively with PET bottles and aluminium cans.
In Germany, the return rate for bottles now sits at about 98%, and across the board, the average return rate in countries that have a bottle return system are higher than those without. Collection rates in countries without one range from 22% to 73%, compared to 65% to 95% in the countries that do use some sort of buy-back system.
At the end of the day, the myriad problems faced by what is, essentially, a common-sense solution to a serious problem – which has a wealth of successful data in support – are completely contrived.
On one hand, the constitutional crisis could have been entirely avoided if the UK government had worked to keep pace with the Scottish government on the incredibly time-sensitive issues of emissions and plastic pollution.
On the other hand, there are multiple case studies both from nations abroad and the UK’s own history which show that these types of systems are broadly successful.
Deposit recycling schemes are not a new or fundamentally “progressive” idea. If anything, they are a prime example of how the best solutions to modern problems can be found by adopting the habits of previous generations.
Before plastic bottles became more popular, it was normal and expected that people would return glass bottles and aluminium cans, because the materials were too valuable to justify only using them once. Then cheaper-to-make plastic came along at a lower cost to the producer, and the emphasis to return and reuse it was left behind.
In 2015, Irn-Bru, a notorious Scottish soft drink, ceased to operate its own buy-back scheme that had operated for 110 years. Only eight years later, AG Barr, the producer of the popular beverage, forgot this long tradition and instead became intent on halting Scotland’s own bottle buy-back scheme.
Now that we are fully aware that the true cost of using plastic bottles is higher than originally understood, both to the environment and consumers, the sensible choice is to reintroduce an incentive to prevent people from disposing of them thoughtlessly.
It is not yet clear if Alister Jack’s campaign to deny Holyrood’s request will be a death blow to the DRS, but it is clear that Scotland will fight to the hilt over what it considers a devolved power to maintain the health of its environment.
Perhaps the best-case scenario would see Scotland move ahead with their DRS in a way that’s inconvenient to the rest of the nation and, in doing so, incentivise faster progress on a UK-wide scheme
As is typically the case when it comes to climate policy, the fear generated around the DRS has been mostly misplaced. This is no doubt due to the fact that, despite the scheme being widely popular, the polluters who will have to pay seem to have the loudest voice.
Perhaps in the future, elected representatives like Alister Jack can remember that their role is better served by enabling policies that citizens support rather than by giving undue time and attention to industry lobbies, especially when the health of a nation, its people and the world at large is at stake.
Editor’s Note: The opinions expressed here by the authors are their own, not those of Impakter.com — In the Featured Photo: Empty plastic bottles. Featured Photo Credit: Lacey Williams.