Closeup of plastic bottles on production line.

Why is the deposit return scheme so controversial?

The deposit return scheme (DRS) is due to begin in Scotland on 16 August, but has led to controversy with some calling for it to be delayed. 

Ferret Fact Service explains the scheme and looks at why it has been controversial. 

Ferret Fact Service | Scotland's impartial fact check project

What is the deposit return scheme?

The deposit return scheme is intended to encourage recycling of drinks containers by putting an additional 20p charge on certain types of single use vessels like drinks cans and plastic or glass bottles. 

Glass bottle returns were common in the 20th century. Irn-Bru operated a well-known return scheme for more than 110 years which ended in 2015. 

Similar schemes are already in place in many countries across the world.

How does it work?

When buying a drink from a single use container, people will pay a refundable deposit of 20p. This will be refunded if the container is brought back to be recycled or taken to a designated recycling point. For larger firms such as supermarkets and shopping centres, there are ‘reverse vending machines’ already being trialled, which will be used for consumers to return their empties themselves. 

The 20p deposit is charged per container to producers, but is passed down to wholesalers, then retailers and eventually the public.

Retailers will pay back customers who bring back their recycled containers, and are reimbursed by the scheme. 

There’s an extra smaller handling fee that retailers will get for the operation of the recycling points. Producers will pay a small surcharge to cover the cost of the scheme.

Circularity Scotland Ltd, a non-profit private sector enterprise, was set up in 2021 to run the scheme.

How will the scheme be funded? 

The DRS is intended to be largely-self-financing. According to Zero Waste Scotland, the 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 per cent of deposit containers returned. This means that bottles and cans which aren’t returned will help to fund DRS operation. 

Why has it been controversial?

Retailers have raised concerns that the fees paid will not be enough to cover the costs of the plan. 

In March 2023, a range of drinks and hospitality businesses wrote to the Scottish Government calling for the DRS to be paused. This followed a previous open letter in November 2022. 

Criticisms of the scheme include the potential for it to encourage customers to cross to England for cheaper alcohol, the impact on the economy and on small business if the scheme affects the appeal of Scotland’s drinks market, and the timeframe in which businesses must register with the scheme. 

There is also concern around the adoption of a special barcode on container labels to track returns.

All producers who sell drinks in Scotland were supposed to sign up with the Scottish Environmental Protection Agency (SEPA) by 1 March 2023. However, many companies signalled they will not sign up to the scheme in its current form.

Lorna Slater, the minister for circular economy who is delivering the scheme, said 664 producers had signed up by 1 March, a small proportion of the 4,500 producers who were expected to have interest in registering. According to Circularity Scotland Ltd, producers responsible for 95 per cent “of the total volume of products sold in Scotland each year” had signed up before the deadline. 

Could the legislation be challenged by the UK Government? 

A row over the scheme broke out in February 2023 between the Scottish and UK governments. 

Some have claimed the DRS will interfere with the UK’s internal market act (IMA), which sets out regulations on internal UK trade after Brexit.

The act sets out two principles which may conflict with the return scheme, mutual recognition and non-discrimination.

The mutual recognition principle requires that goods which comply with relevant rules and standards in one area of the UK, can then be sold in another part of the country without having to adhere to different regulations in that area. 

Non-discrimination means products in one part of the UK should not be affected by restrictions that ‘discriminate’ against those from another area. 

There is a process for devolved governments to apply for an exemption to the market access principles, but the Scottish and UK governments have disagreed on whether that had been done. 

Secretary of state for Scotland, Alister Jack, told the House of Commons on 22 February that “we have not been asked for an exemption for this under the rules of the UK Internal Market Act 2020 by the Scottish Government—no request for an exemption has come”.

The Scottish Government said it had first inquired about an exemption in 2021, and later published correspondence with the UK Government including a letter from the deputy first minister John Swinney from 31 January expressing concern at the lack of progress on an exemption to the IMA, and a reply from HM Treasury confirming that discussions were ongoing about the potential for the IMA impacting on the DRS. 

Minutes from a meeting of the inter-ministerial group for environment, food and rural affairs in November 2022 also noted that Scottish ministers were “exploring whether an exclusion to the UK internal market act is required”. 

In early March 2023, the UK Government said it would consider an exemption after it had received what it considered a “formal” request from the Scottish Government on Monday 6 March.

Photo credit: iStock/yanik88

  1. So what happens to the bottles when returned – Are they recycled just as now or does something different take place ? Will any bottles be refilled ? What is the current proportion of bottles recycled ? Is the scheme only for drinks bottles. What will happen to non-drinks jars such as jam jars ? Will there still be the possibility to recycle them ? There is so much that simply is not clear…..

  2. The deposit return scheme is a bad idea. Bringing soft plastics to a shop is a hassle – the soft plastic container in the local coop is always full, since it’s a tiny trash bin for an area with thousands of residents. Why can’t there simply be a third container for them next to glass and plastic/cardboard recycling? Now you also want me to also bring arbitrarily selected hard plastics? Looking forward to the queues.

    My company tried a version of this with takeout boxes in the campus canteens, attempting to deal with the problem of the canteen being unable to process returns by adding barcode scanners in the kitchens. It was a 5417 show, since the scanners always had a massive queue and writing down the barcode and entering it in the canteen queue slowed things down. Fortunately they’ve since dropped the takeout box rental fee, since everybody was returning them anyway.

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