Policy paper

Policy statement: Scottish Deposit Return Scheme - UK internal market exclusion

Published 27 May 2023

The UK Government is ambitious in its aim to increase recycling rates and reduce litter, ensuring resources are protected and kept in use for as long as possible, and waste is minimised. These are shared ambitions across the UK that will be realised through the close work and cooperation with the devolved administrations. It is also essential that our shared market is protected and unnecessary barriers to trade are avoided, particularly in the context of the cost of living pressures. The law creates a strong presumption of mutual recognition and non-discrimination across our shared market because the free flow of trade across the United Kingdom is vital to businesses and consumers.

The UK Government notes the widespread and serious concerns expressed by businesses about the development of different approaches to deposit return schemes across the UK.

Scotland

The implementation of a deposit return scheme (DRS) in Scotland is a matter for the Scottish Government. The UK Government has considered their request for an exclusion from the UK Internal Market Act 2020 with respect to its impact on the UK internal market as a whole.

The proposals put forward by the Scottish Government will impact thousands of businesses in England, Wales and Northern Ireland as well as those based in Scotland. The UK Government has also noted the powerful representations made by a broad range of businesses across the UK that interoperability of schemes is critical to avoiding unnecessary barriers to trade. These significant public interest considerations have been taken into account alongside the UK Government and Scottish Government’s shared objectives to reduce and manage waste.

UKIM Exclusion for Scottish Government DRS

Balancing these considerations carefully, the UK Government has agreed to a temporary exclusion under section 10 of the UK Internal Market Act 2020 to enable the Scottish Government’s DRS to launch next year, ahead of schemes planned for the rest of the UK. This includes a number of critical business and consumer safeguards:

• The temporary exclusion will cover the period from the launch of the Scottish Government DRS until planned schemes are in place in the rest of the UK, at which point there will be maximum alignment and interoperability as a safeguard for businesses and consumers.
• The temporary exclusion will cover PET plastic, aluminium, and steel cans only.
• A condition of this exclusion is that a maximum cap on deposit levels will have to be agreed with the rest of the UK before the Scottish scheme launches to ensure maximum interoperability and ease of use for consumers.

The temporary exclusion is granted in good faith. Further joint work will be required to ensure the schemes operate seamlessly for businesses and consumers across the UK. When the rest of the UK schemes launch, maximum alignment and interoperability between schemes must ensure:

• Containers in scope are consistent across all schemes, with materials covering PET plastic, aluminium, and steel cans only;
• Processes are in place for collections and refunds of scheme items sold and returned in any part of the UK, with scheme administrators reconciling to ensure fair distribution of payments;
• Processes are in place to minimise the registration and reporting burden for producers, including only one administration fee required per participating company, and producers not required to join multiple schemes separately; and
• One marking (e.g. barcode) for use throughout all parts of the UK, and a single common UK logo, recognisable across all systems.

Glass

The UK Government notes the strong representations made by relevant businesses, including distillers and the hospitality sector, about the impact on trade and in particular consumer choice created by permanently different arrangements on glass within the UK internal market. The UK Government has concluded that this type of permanent divergence would be a very significant step for businesses and consumers, and there is insufficient justification for such an approach. The inclusion of glass would add cost and complexity to the schemes in particular to hospitality and retail sectors, as well as adding consumer inconvenience.

Wales

The Welsh Government’s DRS is planned to be introduced alongside the schemes for England and Northern Ireland. The UK Government will continue to work closely with the Welsh Government to ensure that schemes are fully interoperable with regard to materials in scope, deposit levels, and scheme logo and marking (e.g. barcode).

Northern Ireland

Work is ongoing with the Northern Ireland Civil Service to ensure full interoperability of schemes.