Explosive reports published by the Scottish Government this week show the concessions the devolved authority is willing to make to roll out its DRS in August 2023.
Under the plans, if a premises sells drinks to consumers in Scotland from 16 August 2023, then they must provide a return point to accept empty bottles and cans. Consumers will pay a 20p deposit when purchasing a drink in a single-use container made from PET plastic, steel, aluminium or glass. The deposit will be refunded when the empty container is returned.
However, the Scottish Government’s flagship recycling scheme has been beset by delays and concerns from industry. The go-live date has already been pushed back by a year due to the impact of the Covid-19 pandemic and Brexit (see letsrecycle.com story). Recently, Police Scotland warned sophisticated organised criminals posing as legitimate businesses were preparing to “pick holes” in the DRS (see letsrecycle.com story).
And, despite several assurances to the contrary, a recent report shows the Scottish Government was itself not confident about achieving the amended date to roll out the scheme.
Gateway Review
The ‘Gateway Review’ report, written in May but not released to the public until two days ago, warns of “significant challenges to provide governance and leadership whilst also maintaining sufficient public assurance”, alongside an ongoing “difficult transition from government to industry leadership”.
The Review Team finds that a fully functioning and compliant DRS cannot be in operation for the revised August 2023 schedule
- Gateway Review report
The report is marked ‘amber/red’, meaning it has been classified the second highest level of concern, with the successful delivery of the project is in doubt and major risks or issues apparent in several key areas.
In fact, the warning from the report is dire: “The Review Team finds that a fully functioning and compliant DRS cannot be in operation for the revised August 2023 schedule. The Review Team believes that a ‘softer’ approach to DRS implementation should be pursued but further urgent activity would be required to consider, assess and agree this possibility.”
The report says industry representatives from retail and production had made clear that their individual implementation plans would require 12-24 months from receiving ‘meaningful decisions’. By May, the report says, industry did not have the meaningful decisions it required. The meaningful decisions included not having yet placed a “very sizeable contract” for the collection and processing of recyclate.
Many interviewees also expressed concern about the risk of the global economic climate to the DRS schedule, the report says. Most said obtaining reverse vending machines, recycling equipment, construction material, ICT technology and “sufficient and capable” staff were significant risks to the programme. The significant majority of those interviewed are said to have expressed concern about the quality and quantity of the limited communication received so far.
October
It seems the Scottish Government took these concerns on board. It issued a report in response in October, again not made available to the public until this week, explicitly acknowledging that, “it is now recognised and accepted that a fully/wholly functioning scheme is not required for the 16 August 2023 target.” The report drops the level of concern to ‘amber’, meaning successful delivery “appears feasible”, but there remain “significant challenges that need prompt resolution”.
The October report says the Review Team heard that ministers remained “strongly committed” to an August 2023 go-live date. During the review, the report says, most interviewees commented that the scheme administrator, Circularity Scotland, and industry partners were also committed to August 2023, “having sunk much effort and cost”. Therefore, “it was thought not credible to further extend the go-live date.”
The challenges identified within the report include but are not limited to VAT, on-line takeback, ‘cut-over’, the operational plan and retailer exemptions. The report also says “greater clarity, agreement and, importantly, action” on exemptions is required to allay the concerns of small retailers.
Scaling back
This week, Lorna Slater, Scotland’s circular economy minister, published an open letter updating the Scottish Parliament’s net zero, energy and transport committee on the progress made on the DRS (see letsrecycle.com story). The letter shows the extent to which the minister is prepared to scale back plans to launch the scheme on time.
Firstly, she says, Circularity Scotland has significantly reduced producer fees and the payments expected from day one of the scheme. The changes mean producer fees will be 8%, 30% and 40% lower for glass, PET plastic and metal containers respectively.
Ms Slater also proposed to bring forward amendments to the regulations so that initially only the largest grocery supermarkets will be obliged to provide a takeback service, meaning all other businesses will be exempt. Ms Slater has proposed to phase in the takeback obligation on those supermarkets from 2025.
It remains to be seen whether these measures will allow Scotland to meet the August 2023 roll-out date. Ms Slater acknowledges there remain challenges around compliance and VAT. However, the way she signs off her letter suggests she remains optimistic, in public at least: “I look forward to updating you further on progress and to the launch of Scotland’s deposit return scheme next year.”
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