Scottish Government asks UK firm to take over failed deposit return scheme

The Scottish Government has asked a UK firm to take over its failed deposit return scheme.

Ministers have laid an order before Holyrood, asking for approval for UK Deposit Management Organisation Limited to be designated as the administrator for a deposit return scheme (DRS) in Scotland.

Figures from Coca-Cola Europacific Partners, Co-op, Heineken, Lidl GB, Radnor Hills and Tesco sit as directors of the company.

The scheme would see shoppers charged a deposit when buying drinks in cans and bottles, which would be repaid to them when empty containers were returned.

A Scotland-specific scheme was scrapped after the UK Government declined a request for full exclusion from the Internal Market Act, which meant Scotland could not include glass in the scheme.

The Scottish Government is facing a £160m lawsuit over the failed scheme after a judge ruled a waste management firm’s case could proceed.

Lord Clark ruled in January that Biffa Waste Services Limited’s case against the Scottish Ministers could go ahead as the firm seeks damages.

The business decided to go to Scotland’s highest court, the Court of Session in Edinburgh, because it believes the SNP government is responsible for it incurring a £150m loss.

Biffa is seeking compensation for the cash it invested in the collapsed scheme and the subsequent loss of profit.

The firm believes the Scottish Government misrepresented the scheme when it assured Biffa it would go ahead.

The company is said to have relied on personal assurances from Green Party co-leader Lorna Slater as a reason to invest £55m in vehicles and equipment to prepare for the DRS, before she scrapped it in June 2023.

The UK Deposit Management Organisation Limited is set to run the scheme across England, Scotland and Northern Ireland due to be launched October 2027.

There will be three legally distinct deposit return schemes in the UK: one in England and Northern Ireland; one in Wales; and one in Scotland, the UK Government said.

Scotland’s acting net zero secretary Gillian Martin said: “Establishing a deposit return scheme in Scotland has been a long-running and consistent commitment of the Scottish Government.

“A deposit return scheme will reduce the litter on our streets, increase the recycling of drinks containers and support our net zero ambitions.

“Scottish Ministers have decided that UK Deposit Management Organisation Limited should be designated as the scheme administrator for Scotland, and have laid before the Scottish Parliament the draft Deposit and Return Scheme for Scotland (Designation of Scheme Administrator) Order 2025, which requires approval by the Parliament before taking effect.

“This decision marks an important milestone as we progress towards launching the scheme in October 2027.

“We will continue to engage constructively with UK DMO Ltd, industry and the other nations across the UK to support the delivery of a successful deposit return scheme.”