Delayed launch brings revised Deposit Return Scheme for Scotland

The Scottish Deposit Return Scheme (“DRS”) is a key element of Scotland’s transition to a circular economy, though its path to implementation has not been without challenges. On 18 April 2023, Scotland’s First Minister announced that the introduction of the DRS would be delayed once again to ensure a successful launch on 1 March 2024. The Scottish Government later revealed a number of changes to “simplify and de-risk” the scheme. We provide an overview of the revised implementation timeline and updated measures relevant to producers, retailers and other stakeholders.

Timeline

The Scottish Government has delayed the go-live date of the DRS to 1 March 2024. It is anticipated that this extra time will enable businesses obligated by the scheme to be more readily prepared, as well as secure certainty on the exclusion of the scheme from the UK Internal Market Act 2020.

Although the previous producer registration deadline passed on 1 March 2023, producers not already registered now have until 12 January 2024 to apply to the Scottish Environment Protection Agency (SEPA) or Circularity Scotland (the scheme administrator) for registration.[1] From 2025, applications to register must be made before 1 March in any relevant year. Once the scheme goes live, SEPA will publish and maintain a record of producers who are registered to market and sell scheme articles in Scotland. Registration also remains open for return point operators, who must register with Circularity Scotland to enable the collection and payment system to operate.

Changes to the DRS

The fundamental design of the DRS does not appear to be changing. However, last week, Circular Economy Minister Lorna Slater announced a package of measures to simplify the scheme’s operations, in particular for smaller businesses and hospitality, which are set out below.

1. Scheme containers

The  Deposit and Return Scheme for Scotland Regulations 2020 as amended (“Regulations”) currently apply to drinks packaged in a single-use container made from PET plastic, glass, steel or aluminium sized between 50ml and 3 litres, referred to as scheme articles or containers. It has now been announced that drinks containers under 100ml will be excluded, removing miniatures and other smaller containers from the scheme.

2. Volume of sales

The Regulations currently place no lower limit on the volume of product sales to qualify for the scheme. The government has now confirmed that products which sell less than 5,000 units per year will be excluded, which is likely to cover niche product lines, such as craft drinks or limited-edition products. The government anticipates that this change will only remove around 0.5% of articles from the scheme, yet around 44% of businesses will no longer need to apply a deposit to their products.

3. Return point operator exemption

Unless exempt or subject to a regulatory position statement, retailers obligated by the scheme must operate a return point (where consumers can return their empty scheme containers and get their deposit back) or a takeback service.[2] Retailers may apply to Zero Waste Scotland (on behalf of the Scottish Ministers) for an exemption to operate a return point where:

• there is an alternative return point located within reasonable proximity to the retailer’s premises, and the operator of that return point has agreed to accept returns on behalf of the retailer; or
• the location, layout, design or construction of the retailer’s premises does not reasonably permit the operation of a return point without risking breaches of other legislation, such as environmental health, food or fire safety.

The government has now announced a further return point exemption applicable to all hospitality premises that sell the majority of their drinks for consumption on the premises. The proportion of sales at which the hospitality measures will apply is to be confirmed following engagement with hospitality businesses. In addition, the online application process for an exemption is to be simplified.

Comment

Further delay to the introduction of the DRS in Scotland has been met with mixed response. Whilst many welcome the extra time for further preparation and certainty, in particular in relation to whether the scheme will be granted an opt-out from the UK Internal Market Act 2020, others are frustrated at the pace of change in a climate emergency. In any case, the revised launch date and other changes announced will be subject to the approval of the Scottish Parliament and amended Regulations. Those obligated or no longer obligated by the scheme should continue to monitor further developments.

How the proposed revised scheme will operate alongside a scheme for the rest of the UK (anticipated in 2025) continues to be a significant question mark.  For an overview of plans to introduce similar deposit return schemes across the UK, please see our previous Law-Now article here.   

^[1] Producers include a drinks brand owner (for scheme articles branded in the UK); an importer of drinks into the UK for sale to consumers in Scotland (for scheme articles branded outside the UK); and someone selling drinks in single-use containers that are filled and sealed by the retailer at the point of sale (e.g. a crowler).

^[2] Retailers are those who market, offer for sale or sell drinks in Scotland (including face-to-face retail, online retail, sales in a hospitality setting, sales from vending machines, and wholesalers).