Why is the Scottish deposit system under attack?

plastic bottles

Ministers say Scotland’s deposit scheme could drive a big increase in recycling

Scotland is aiming to be the first part of the UK to introduce a deposit return scheme for single use drink packaging. Ministers claim it would boost recycling, but the plan is controversial and critics are calling for a delay. So what do we know about the plan – and why is it coming under fire?

What is a deposit scheme?

Deposit return schemes (DRS) are used in many countries around the world to encourage people to recycle beverage packaging such as bottles and cans.

Many older Scots will remember being able to get cash back on their “ginger” (fizzy) bottles when they were kids – and it works in a similar way.

Anyone who buys a drink in a certain disposable packaging pays a small deposit that he gets back when he takes the bottle or can to a collection point.

The aim is to encourage recycling, but also to reduce litter and tackle climate change by reducing the amount of material going to landfills.

How would it work in practice?

A 20 pence deposit would be added to all single-use PET plastic, metal or glass drink containers. It applies to both alcoholic and soft drinks.

The consumer gets his money back by returning the container to retailers and catering establishments who sell such one-off products to take away.


Bar dispensers like this one at Aberdeen Royal Infirmary are already being trialled across Scotland.

Some retailers will accept items without a prescription, while larger stores, malls and community hubs will use automated receipt points known as reverse vending machines (RVMs).

Payment can be made in cash at the counter or with a voucher from an RVM. Vouchers can be used for shopping or you can request cash instead.

Who implements the scheme?

Beverage manufacturers and importers are responsible for running the programme, but to help them a private non-profit organization called Circularity Scotland has been set up to manage it on their behalf.

Producers have the option to manage the scheme themselves, but in most cases working with Circularity Scotland will be more cost effective.

Retailers also play a key role by operating the container return points.

The way the scheme works, in more detail, is that producers are charged 20p by the trustee for each bottle or allowed to put on the Scottish market – but they get this back by adding it to the cost of their Products.

This 20 pence deposit is passed along the chain, through wholesalers and retailers – and ultimately to the customer who gets it back when the item is returned for recycling.

In addition, producers are charged a small fee by the administrator to help cover the costs of running the service – approximately 2p each for plastic or aluminum bottles and 4p per glass bottle.

Circularity Scotland pays retailers a small administration fee for fulfilling their role as a return point – around 2 or 3 pence per item, depending on the method of collection.

The retailers pay customers for recycled items out of their own resources, but are reimbursed by the administrator.

The scheme, which applies to all drinks companies selling their products in Scotland, is designed to be largely self-sufficient.

The Scottish Environment Protection Agency (Sepa) will act as a regulator and carry out inspections to achieve compliance.

When will it go live?

The plan was first announced in 2019 and was due to launch in July 2022, but this was postponed after a review found that date “unfeasible”, blaming Covid disruption.

It is currently scheduled to launch from August 16, 2023.

Producers have until the end of February to register with Sepa and pay a flat fee of £365.

This can be done through Circularity Scotland, but if they choose this route, they are urged to apply earlier.

Why are some companies concerned?

Some companies fear it will impose additional costs and other burdens on them at a time when they are already struggling.

Small producers, such as craft breweries, say they are not opposed to the idea in principle, but warn that the timetable and details of the scheme are problematic.

Producers are encouraged to label items destined for sale in Scotland with a special Scottish barcode – and if they choose not to do so, they face a surcharge of just over 1p per item.

Smaller businesses argue that the cost of adding new barcodes or paying a flat registration fee will have a disproportionate impact on them.

Loch Lomond Brewery

Small producers such as the Loch Lomond Brewery are concerned about the impact of the scheme

Retailers can request an exemption from providing a collection service, but only if they can demonstrate that a nearby collection point is willing to accept material on their behalf, or if collecting material would violate other regulations, such as fire safety or environmental hygiene.

They also fear that they will have to pay higher prices to producers, but there will be a delay in getting that money back from customers, affecting their cash flow.

A leading lawyer recently claimed that the Scottish scheme could create an illegal barrier to trade with other parts of the UK as it would result in different prices on either side of the border.

Aidan O’Neill KC also warned that it could prove impossible to enforce the rules on imported products, putting Scottish-based producers at a disadvantage.

Similar schemes will be introduced in England, Wales and Northern Ireland in 2025 (although in England the scheme is not expected to cover glass bottles).

What is the government saying?

The Scottish Government insists it is listening to concerns, but some now argue it would be wiser to postpone the Scottish plan again to allow more time for preparation and better coordination with the rest of the UK.

Circular Economy Minister Lorna Slater says she is confident the scheme will not be interrupted.

She told BBC Scotland’s The Nine programme: “Scotland’s deposit scheme is such an important part of how we tackle the scourge of litter on our streets and in our parks and how we achieve net zero. And last year we gave companies a full year given extra to prepare in the wake of Covid so I am confident of a successful launch in August this year.

“The UK Government has been working with us on this scheme for years. Last week I received correspondence from the UK Treasury clarifying the VAT rules but also saying that the UK Government is meeting the environmental targets of the Scottish Deposit Return Scheme. fully supports and is committed to ensuring that it functions properly.

“We are currently working to support companies to apply for the scheme before the deadline, but we have always said we will take a pragmatic approach so that companies really have the information they need and are able to to participate fully in this arrangement.”

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