Why has Scotland's deposit return scheme been delayed?

Controversial plans to introduce a deposit return scheme for single-use drinks containers in Scotland have been delayed.

First Minister Humza Yousaf said the scheme, which was due to be launched in August, would now come into effect in March next year.

What do we know about the scheme - and why has it come under fire?

Deposit return schemes are used in many countries across the world to encourage people to recycle drinks containers such as bottles and cans.

Many older Scots will recall being able to get money back on their "ginger" (fizzy drink) bottles when they were children - and it works in a similar way.

Anyone who buys a drink in a certain types of container is charged a small deposit which is returned to them when they take the bottle or can to a recycling point.

The aim is to incentivise recycling, reduce litter and help tackle climate change by reducing the amount of material going to landfill.

A 20p deposit would be added to all single-use drinks containers made of PET plastic, metal or glass. It applies to both alcoholic and soft drinks.

The consumer gets their money back by returning the container to retailers and hospitality premises that sell such single-use products to take away.

Some retailers will accept items being returned over the counter.

Larger stores, shopping centres and community hubs will operate automated receiving points known as reverse vending machines (RVMs). These will issue vouchers which can be used to pay for shopping.

Similar schemes are due to be introduced in England, Wales and Northern Ireland in 2025, although in England the scheme is not expected to include glass bottles.

Drinks producers and importers are responsible for delivering the scheme. To help them, a private non-profit company called Circularity Scotland has been created to administer it on their behalf.

Producers are billed 20p by the administrator for every bottle or can they plan to put on the Scottish market - but they get this back by adding it to the cost of their products.

This 20p deposit is passed on down the chain, through wholesalers and retailers - and eventually on to the customer, who gets it back when the item is handed in for recycling.

In addition, producers are charged a small fee by the administrator to help cover the cost of running the service - about 2p per item for plastic or aluminium bottles and 4p per glass bottle.

Circularity Scotland will pay retailers a small handling fee for fulfilling their role as return points - roughly 2p or 3p per item, depending on the collection method.

The retailers pay customers for recycled items out of their own funds, but are reimbursed by the administrator.

The scheme is designed to be largely self-financing. The Scottish Environment Protection Agency (Sepa) will act as regulator, carrying out inspections to achieve compliance.

Some firms fear it will place extra costs and other burdens on them at a time when they are already struggling.

Small producers such as craft breweries say they are not against the idea in principle - but warned that the timetable and details of the scheme were problematic.

Producers are being encouraged to label items destined for sale in Scotland with a special Scottish barcode - and if they choose not do this, they face a surcharge of just over 1p per item.

Smaller firms argue that the cost of adding new barcodes and paying a flat rate £365 registration fee will have a disproportionate impact on them. They had argued for a longer adjustment period.

Trade bodies say thousands of firms could end up being forced out of the Scottish market, and many products will disappear from the shelves.

Retailers can ask for an exemption from providing a collection service - but only if they can demonstrate a nearby collection point is willing to accept material on their behalf, or if collecting material would breach other rules such as fire safety or environmental health.

They are also worried they will have to pay higher prices to producers but there will be a delay in recouping that money from customers, hitting their cashflow.

The delay was announced by Humza Yousaf as he set out his priorities for the next three years. It will now be launched on 1 March next year.

The first minister said he and Circular Economy Minister Lorna Slater - who had previously voiced confidence that the scheme would launch on time - had heard the concerns over its readiness to be launched this August.

He said they would work with businesses and Circularity Scotland to address concerns and "ensure a successful launch". A package of measures will also be put in place to "simplify and de-risk" the scheme.

Mr Yousaf also said there was "uncertainty" because the UK government had delayed a decision on whether to exclude the scheme from the Internal Market Act.

Scottish Secretary Alister Jack has previously hinted that the UK government might not grant an opt-out.

In February, lawyer Aidan O'Neill KC claimed that the Scottish scheme could create an unlawful trade barrier with other parts of the UK, as it would result in different prices being charged either side of the border.

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