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Scottish Deposit Return Scheme (DRS) delayed

17th November 2021

Martin Hyde

The Scottish Government today confirmed a long-suspected delay to their flagship Deposit Return Scheme (DRS).

Speaking in Parliament, Lorna Slater MP (Minister for Green Skill, Circular Economy and Biodiversity) confirmed that a mixture of obstacles related to the COVID-19 Pandemic, combined with a range of unresolved issues such as the lack of clarity around the role of VAT within beverage deposits from the UK government have led to the necessity for a delay.

What is a DRS?

A Deposit Return Scheme is a mechanism of collecting empty packaging (in this case beverage containers) from consumers by adding a deposit at point of purchase. This deposit is then returned once the container is cleaned and delivered to a recycling point by the consumer.

Why is Scotland’s work on DRS so important?

The Scottish Deposit Return Scheme will be the flagship DRS within the UK and may well set the scene for the “rest of the UK” DRS being developed by DEFRA.

The Scottish government plans to utilise DRS as a mechanism of reducing litter and increasing the recycling rate of beverage containers.

What is the ongoing issue with VAT?

The Scottish Government have been keen to ensure that the deposit itself (currently planned at 20p per container) is not subject to VAT to avoid inflating the cost of the scheme to consumers. Alongside the minister, key stakeholders and industry have written to the UK government for clarity but only yesterday were made aware that there is currently no route to remove VAT from deposits.

Scheme Administrator Costs

The proposed scheme will be managed and rolled out by Circularity Scotland (a not-for-profit business developed by industry and stakeholders) whom have been approved as a Scheme Administrator.

There was concern from some members of the house around the proposed costs now being significantly higher than those originally released at the point of approval of the Deposit Return Scheme.

What is next?

The minister committed to feeding back on the final timeline for the DRS “as soon as is possible”, furthermore the Scottish government is launching a new litter and fly tipping strategy next year to help reduce the impact of littering in Scotland.

For more information on Deposit Return Schemes please visit our summary video here.