Meeting of the Parliament

Meeting date: Wednesday, May 8, 2019

Official Report 1058KB pdf

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Deposit Return Scheme

The first item of business is a statement by Roseanna Cunningham on a deposit return scheme for Scotland.

Before we move on to the statement, I note that it appears that significant details of the scheme have been reported in the press before today’s announcement. I refer members to the good practice guidance on announcements by the Scottish Government, in that major policy announcements should always come to the Parliament in the first instance. I urge the Government to have regard to that guidance.

The cabinet secretary will take questions at the end of her statement, so there should be no interventions or interruptions.

The existence of such a leak is disappointing. Not only does it rather steal my thunder; the Scottish Government would wish not to see such a thing happen, and I am absolutely unclear how it did.

The Scottish Government is proud to lead the way across the United Kingdom with our plans for a deposit return scheme for single-use drinks containers. Last summer’s extensive consultation reinforced the view that an appropriately targeted deposit return scheme—or DRS—would help to improve the environment and change people’s attitudes to recycling and littering. Having such a scheme is central to our ambition to build a more circular economy in which materials are kept in high-value use for as long as possible.

As members will be aware, we have embraced the recent report from the Committee on Climate Change and have acted by making amendments to the Climate Change (Emissions Reduction Targets) (Scotland) Bill. Interventions such as establishing a DRS will be central to our efforts to tackle climate change. The Scottish Government has been working closely with Zero Waste Scotland, the Scottish Environment Protection Agency and others to build on the outputs of the DRS consultation. We have engaged with a wide range of stakeholders to ensure that we learn the lessons of successful schemes. At the same time, we have been keen to avoid simply lifting and laying a model from elsewhere. We are clear that we need a DRS that properly reflects the needs of Scotland.

I am pleased to be able to share the outputs of that activity and to outline the shape of the ambitious scheme that we will deliver. Further detail on today’s proposals will be available in supporting documents that will be published after this statement.

The recent consultation signalled strong support for a DRS that would cover a wide range of materials, and so I intend to implement a system that will cover metal cans, polyethylene terephthalate—or PET, which is the most common form of plastic that is used for drinks containers—and glass.

I have looked carefully at the arguments for and against including glass. After a detailed analysis of how the costs of including glass match up to the benefits, including increased recycling rates, reductions in carbon emissions and reductions in glass litter, my conclusion is that its inclusion is justified. There is also strong public support for including it, as was shown by the Marine Conservation Society’s recent poll, in which 85 per cent of participants indicated their support for it. However, I know that some producers, retailers and the glass industry have concerns about its inclusion. I want to make it clear today that I am committed to working with them to implement the scheme in a way that will address such concerns. However, if we are to include glass, it must be done from the outset. The infrastructure requirements for the material mean that it would be hugely complex and expensive to add it later.

At this stage, I have chosen not to include high-density polyethylene—or HDPE—plastic in the scope of the scheme. HDPE is used primarily for packaging fresh milk, but there are significant concerns about it—for example, about contamination of other materials and odour. Unlike glass, it would be possible to include HDPE in our DRS at a later stage if such concerns could be overcome.

Our DRS needs to be as convenient as possible for the public. People must be able to access return points easily. It would not be acceptable for certain groups of people—for example, those who live in our more rural and remote communities or who are on low incomes—to be penalised because they cannot return containers.

With that in mind, I intend to implement a return-to-retail model, whereby all businesses that sell drinks will be required to accept returns. The change will be visible to us all, including here in this Parliament, in the Scottish Government and in workplaces across the country, reinforcing the fact that we all have a role to play in helping our environment.

We recognise that consideration must be given to the operation of DRS in smaller retail settings. Retailers will be given flexibility in how they enable returns, whether through different sizes of reverse vending machines or manual over-the-counter take-back arrangements. We will explore with retailers how the financing of reverse vending machines can be supported, and we are committed to trialling different return, storage and collection solutions in preparation for the scheme’s roll-out.

I have carefully considered the calls by some to introduce automatic exemptions for retailers below a certain size. I have significant reservations about doing so. Modelling shows that even a modest level of automatic exemption would quickly hinder the scheme’s accessibility. An exemption for retailers with a floor space of up to 280m², as some have proposed, would result in only 17 per cent of retailers accepting returns. I do not believe that that would be workable.

On occasion, of course, there will be numerous retailers operating very close together, and where that is the case, we should build in the flexibility to accommodate exemptions. I also believe that there should be the flexibility to supplement the role of retailers through the operation of additional return points. That could help to drive additional footfall for community initiatives and could add particular value in our more rural and remote communities, which are less well served by shops. By taking that approach, we will maximise opportunities for the public to reclaim their deposits.

I have listened carefully to the hospitality industry regarding how DRS should operate for premises such as pubs and restaurants where drinks are sold for consumption on site. I can confirm that, in such cases, the premises will pay the deposit but will have the choice of whether to pass it on to the consumer.

International evidence suggests that the value of the deposit within a DRS is key to participation. The consultation indicated strong support for a deposit of 15p or more, and our analysis suggests that a deposit at around that level would support a strong return rate. Evidence from international models also indicates that ease of consumer understanding and proofing against inflation are important factors. I am therefore proposing a deposit level of 20p.

With up to 1.7 billion containers and many millions of pounds passing through our DRS, it will be important for businesses and the public to have confidence in the scheme’s operation. We have looked at examples of effective schemes elsewhere. It is clear that privately operated systems can often deliver the right performance outcomes. In practice, that involves producers and retailers establishing a not-for profit company for the specific purpose of running the scheme. I favour such a model; as DRS is a form of producer responsibility, intuitively it makes sense for industry to shoulder the responsibility for its operation, and I believe that, with the proper regulation, that approach will work well for Scotland.

In line with other schemes, I see no reason why we cannot recycle 90 per cent or more of our drinks containers through DRS. That is far in excess of current recycling rates, and I intend to reflect that aspiration in the regulations for establishing the scheme. Clearly, it will mean fewer containers being collected through kerbside collections. We will work with local government to ensure that DRS complements their collections, which will still have a critical role to play. Those collections will in future be supported through reformed packaging producer responsibility arrangements that are currently being consulted on across the UK.

The DRS regulations will be subject to the super-affirmative procedure. There will be ample opportunity to review and comment on our proposals before the secondary legislation is laid and during its passage through Parliament. I encourage everyone to take that opportunity and to continue the high levels of engagement that have benefited us to date. It is my intention to commence the super-affirmative procedure this summer.

Clearly there is much to do to successfully translate the scheme design into a fully operational service. As the contribution of industry will be central to its success, we have set up an implementation advisory group to work with those sectors with a direct stake in the scheme’s operation. Members include the British Soft Drinks Association, the Scottish Retail Consortium, the Scottish Beer and Pub Association and a number of others. The group will meet regularly to discuss implementation.

I acknowledge that our plans are ambitious. I make no apology for that, but I do not underestimate the scale of the task. I look forward to working with partners to plan next steps. My overall aim is to deliver the scheme in the current parliamentary session.

I remain open to working with the other UK Administrations, which are currently consulting on DRS. However, that must be on the basis that their ambition matches ours. Our climate change commitments mean that it is simply not an option for us to wait in the hope that others will follow the example that we are now setting. That said, I am optimistic that the bold approach that we are taking here in Scotland will provide a blueprint for future action across the UK.

Today’s announcement marks an important milestone for DRS and our wider circular economy ambitions. I look forward to working with parliamentarians across the chamber as we progress that work in the weeks and months ahead.

We will move on to questions, for which I intend to allow around 20 minutes. We have a load of questions but, if members are succinct in their questions and answers, we can get through them all.

I refer members to my entry in the register of members’ interests. I thank the cabinet secretary for providing advance sight of the statement.

A deposit return scheme can be a valuable tool in increasing recycling rates, but it is commonly used in advance of kerbside recycling infrastructure roll-out. Nevertheless, I recognise that the Scottish National Party Government has been working on the scheme for more than a decade and so I expect the smoothest possible roll-out.

Our expectations of the scheme are as follows: a plastic recycling plant and DRS vending machines to be built here in Scotland; local authorities to be compensated on current and future revenue streams and to receive technical support regarding any rerouting of collections; an incentive scheme to be rolled out to allow smaller businesses a mechanism to attract more customers, and exemptions for some of the smallest businesses, perhaps only with respect to glass; a procurement framework to be set up to allow businesses to buy vending machines at a competitive price; health and safety training to be provided for glass, focused on smaller businesses; and a full behaviour-change analysis of the scheme to be carried out as part of monitoring and evaluation.

The cabinet secretary may wish to reflect on those points. Will she also inform Parliament of how much extra the inclusion of glass has added to the total cost of the scheme?

Maurice Golden has raised quite a lot of issues. He will be happy to learn that the document that will be available once the statement is finished—it could not be published sooner because that would have given away the scheme design—is a full 150-page stage 1 business case and is likely to have the level of detail that will have even Maurice Golden’s heart beating strongly. I know that he is very keen on seeing that detail.

We have considered a number of the issues that the member raises, which are key issues, and I referred to some of them in my statement. One reason why we have the implementation advisory group is to continue to have that conversation. A stage 2 business case will be published a little later in the process. All the points that the member raises will be taken on board, including the issues to do with glass. As the member may know from listening to my statement, the case for including glass was slightly more arguable. People would have expected plastic and aluminium to be included, but we had to think a bit more about glass. On balance, we decided that it was better to include glass at this point, because we cannot retrofit it. Fundamentally, that would have been a major problem.

I hope to be able to engage with Maurice Golden on a lot of the detail, in which I know he is interested.

I thank the cabinet secretary for providing advance sight of the statement.

Scottish Labour welcomes this robust DRS model and recognises the campaign by the Marine Conservation Society and the have you got the bottle? campaign. I declare that I visited Norway with that campaign group last summer.

I agree that the ambition must not be held up by the UK Government, but compatibility with the rest of the UK will be important for businesses and the public. What contact has the cabinet secretary had with her UK counterparts to ensure the necessary synergy? When I was in Oslo, I saw a collection station. What actions can the Scottish Government take to ensure that such stations are ready to receive the range of materials? What support is being given to provide new opportunities for remanufacturing, which is important for our circular economy and climate change targets?

Claudia Beamish’s latter points are important and relate to some of the things to which Maurice Golden referred. One of the reasons why we want the industry to be in the driving seat in running the scheme is that, from an early stage, it will see the need for, and the advantage of, having such a scheme.

In Scotland, up until now, we have not capitalised on some of the recycling opportunities that there might have been. The scheme will provide the volume of materials that are needed to take advantage of such opportunities. We will continue to talk about those issues, and I expect that the Environment, Climate Change and Land Reform Committee will be interested in them, too.

Claudia Beamish mentioned the relationship with the rest of the UK. She can be reassured that I have been involved in two different meetings with my counterpart south of the border, Thérèse Coffey, to discuss the issues relating to deposit return schemes. The UK Government is well aware that we are a couple of years ahead in developing such a scheme. Given the position that we have taken today, I hope that Michael Gove and Thérèse Coffey will consider whether they can use our experience and some of the work that we have done, including the business case that we will publish, to help to drive faster what the UK Government is intending to do.

Twelve members wish to ask questions, so I reiterate that succinct questions and answers will be useful.

I note the cabinet secretary’s comments about the return-to-retail model. How will small retailers be supported to play their part in delivering the scheme? Specifically, how will people in rural villages be able to access the DRS machines?

The intention is that the DRS will be cost neutral for retailers, who will be reimbursed through a per-container handling fee, which will make participation as easy as possible.

We intend to explore directly with retailers how the financing of reverse vending machines can be supported. That might have been one of the issues that I missed from Maurice Golden’s list of points. Although some retailers will choose to operate a reverse vending machine, we recognise that that will not always be practical. Gillian Martin’s question acknowledges that point. Therefore, the scheme will allow for manual over-the-counter take-back, if that suits retailers.

Our decision not to include automatic exemptions for retailers will help us to ensure maximum coverage in remote and rural communities across the country. That is important, because the vast majority of people need to have direct access to places where they can get the deposit back, otherwise the scheme will not work.

Will the cabinet secretary confirm that the scheme will be compatible with any scheme that is developed in the rest of the United Kingdom? Will any additional infrastructure that is required, such as a recycling plant, be built in Scotland, preferably in Ayrshire?

John Scott is an old friend of mine, but he somewhat overstates my ability to see into that crystal ball.

We are pressing ahead with our plans, which contain a great deal of detail. The UK Government is seriously considering rolling out a deposit return scheme in England and Wales. I cannot say what decisions the UK Government will make, but, by the time it is in a position to make such decisions, we will be well down the road to having a scheme up and running. I hope that the UK Government will have regard to what we will have in place, and I suspect that everybody, including producers and retailers, will put pressure on the UK Government to introduce the same system that will be in place in Scotland.

I welcome the cabinet secretary’s announcement. In the most modern deposit return schemes, the operator provides an app for retailers so that they can request efficient collections, and a different app for the public so that they can reclaim their money directly or donate it to charity. Will the Scottish deposit return scheme make use of technology and include such options?

That is a good idea and is one of the issues that the implementation advisory group will discuss. Apps are used across the board for all sorts of things, such as paying for parking. I see no reason why we cannot use modern technology in that way, and I will ensure that the advisory group that will meet later this month adds that to the issues that they might think about.

I, too, refer members to my entry in the register of interests. At the invitation of the have you got the bottle? campaign, I joined a cross-party visit to Oslo to see the Norwegian system in operation.

The cabinet secretary will be aware of my strong support for DRS, since first seeing it in operation in Norway in the mid-1980s, and of my keen interest in seeing it rolled out in Scotland, so I am delighted by today’s announcement. However, the cabinet secretary said in her statement that she is aware of concerns from some retailers and producers—as well as the glass industry itself—about the inclusion of glass bottles in the scheme. Will she assure those with concerns—and members—that when the scheme is being implemented, Zero Waste Scotland will do everything that it can to engage with and assist retailers or producers who continue to have concerns?

We are absolutely committed to continuing the engagement that we have had with retailers in the development of the scheme. We intend to work with them to test different return, storage and collection arrangements in the coming months. The critical role of retailers is also reflected in the membership of the implementation advisory group that I spoke about. That includes representatives from the Scottish Retail Consortium, the Scottish Grocers Federation, the Federation of Small Businesses and the National Federation of Retail Newsagents. It is my intention to bring forward secondary legislation later this year to establish the scheme. That will provide another important opportunity for retailers to engage with Parliament on our plans for DRS.

I refer members to my entry in the register of interests and to the very successful study visit that a number of us made to Oslo last year. I add, on behalf of the Scottish Greens, that we warmly welcome this wide-ranging deposit returns scheme. It really takes the lead in the UK.

Last year, in preparation for the scheme, the cabinet secretary also visited Oslo, where hotels and restaurants in the catering trade that collect empties on behalf of the system are paid the same handling fee as retailers that do the work. Will the cabinet secretary confirm that that will also be case for Scotland’s hospitality trade?

I understand that the hospitality trade will not be required to operate the deposit return system with its customers: it will be a customer. I undertake to get back to Mark Ruskell on whether there is a handling fee, because I am not entirely certain that that is the case, although I do not want to mislead him by saying that there is not.

I also refer to the register of interests. I am the convener of the cross-party group on independent convenience stores.

The cabinet secretary will be aware that three members of the Scottish Grocers Federation, including the Oxgangs Premier store in my constituency, have been trialling reverse vending machines. More than 36,000 plastic bottles and aluminium cans have been collected in two months, with 40 per cent of people donating the deposit to a local charity.

However, those machines, with their smaller footprint, cannot accommodate collection of glass. Will the cabinet secretary clarify how she expects the convenience store sector, which in most cases has limited floor space, to accommodate storage of glass?

That, of course, was one of the issues that we had to think about when we were considering whether to include glass. If those smaller machines that do not take back glass were to be rolled out in a scheme, that would make it impossible to add glass in the future. The trial showed that once a retailer had been set up on that basis, collection of glass was not a possibility for the future.

Retailers will have the flexibility to accept returns through machines or manually, over the counter, if that better meets their needs. As I said, we are committed to testing different return, storage and collection arrangements in preparation for the scheme’s implementation.

Businesses that choose to use RVMs will have flexibility in respect of the type of machines that they operate, subject to some basic technical criteria being met. There will not be a mandated RVM model.

I, too, declare an interest, in that I was a member of the cross-party delegation to Oslo. As a member of a party that has since 2012 been committed to a DRS, I welcome the commitment that has been made today, and much of the content of the cabinet secretary’s statement.

Can the cabinet secretary confirm that the proposals will be island proofed, so that accessibility and affordability for island residents, businesses and communities are properly taken into account?

Given the strong evidence from Norway about the environmental and economic benefits of excluding glass, thereby allowing other less environmentally impactful materials to be used, can the cabinet secretary also confirm that she has opened a further debate—

I think that that is enough, Mr McArthur.

—about the inclusion of glass—

You have asked two questions already. Thank you.

I will catch up with Liam McArthur on some of the wider issues. I absolutely reassure him that the comments that I am making about remote and rural premises also apply to island premises. I know that the issue that he raises is a real one; it has been raised by my colleague, Michael Russell, in respect of Gigha. I want to reassure Liam McArthur that we take that point on board.

There are different ways to manage the scheme. Norway has remote and rural areas and it has islands, and there are plenty of other examples internationally of the issue being resolved. I am not concerned that that will not happen in Scotland.

I can share details with Liam McArthur, but I do not have time to do so just now.

The questions are getting very long again, and there are five left to ask. We will not get everybody in, but I will do my best.

On rural and remote and island communities, might one way around problems that a number of members have raised involve setting up communal return points at shops and other institutions, including schools and community centres?

We envisage exactly that possibility. The scheme design allows the establishment of community-led return points, which could be provided by a local authority, or even by a third sector provider, and will encourage the public to make best use of local services across the country.

I declare an interest, in that I was part of the cross-party group that visited Norway to see the DRS scheme.

The proposed flat-rate deposit of 20p does not take into consideration the cost of recovery or how sustainable each material is. Can the cabinet secretary set out how the scheme will encourage producers to switch to more recyclable and lower-carbon packaging?

Finlay Carson should be aware that a number of initiatives are under way. For example, his Government at Westminster has introduced a kind of plastic tax, which approaches the issue from the direction of the producer. As well as what we are announcing today in Scotland, a number of things that deal with the issue that he raised are happening in the UK as a whole. I know that if he were to question Michael Gove on the plastic tax, he would get a fairly robust answer.

I am happy to talk more with Finlay Carson about the 20p deposit. We were thinking about the impact on the customer and the need for the deposit to be a straightforward and simple one that people will want to reclaim.

I recently visited Family Shopper in Blantyre, which returns some of the proceeds from its reverse vending machine to the community. How can the scheme that the cabinet secretary has outlined today incentivise community involvement?

There is nothing in our scheme design that would make what James Kelly described impossible. I expect that it is one of the things that people will want to consider. I think that it was Alex Rowley who talked about a similar thing happening elsewhere. Those who will administer schemes will perhaps have a view, but the decision will be entirely a matter for the customer. I anticipate that, in some cases, what the member suggests will happen, and that in others it will not.

I declare that I have never been to Oslo.

Can the cabinet secretary provide an assurance that return accessibility—for example, for people without cars—will be a key consideration in relation to implementation, so that people can make returns with ease?

I am now wondering whether I should have also declared that I have been to Norway to look at the system there. In defence of all those of us who went there, I note that the system is astonishing to see, and that gaining understanding of it has cleared away a lot of the concern about deposit return systems.

In response to Kenneth Gibson’s question, I say that we are committed to working with retailers in the coming months to test different return, storage and collection arrangements. In addition, we will consider options for retailers to access support to acquire reverse vending machines, when they choose to operate automated returns. Those matters will be taken forward by the implementation advisory group that I mentioned.