Circularity Scotland: Bottle return scheme firm 'on brink of collapse'

The firm which was due to manage a controversial Scottish recycling scheme appears to be on the brink of collapse.

Staff have been sent home from Circularity Scotland and the board is unable to confirm if they will be paid for the month or if they will be able to return to the office.

The company was in charge of the deposit return scheme (DRS) which has been delayed until 2025.

Its board said it recognised it was an "extremely difficult time" for staff.

The situation is believed to affect about 50 workers. The board said bosses were "working tirelessly" to find a solution.

• Why has Scotland's deposit return scheme been delayed?

• Scotland must rethink recycle scheme - UK minister

• Unlawful trade barrier warning over bottle scheme

The Scottish government's flagship recycling scheme was supposed to launch in March next year.

But a week ago it was announced it would be delayed until October 2025 at the earliest.

The BBC understands that this further delay has made the company unviable in its current form.

Circularity Scotland Limited (CSL) has issued a proposal to stakeholders saying it does not see a future with its current staffing levels.

The proposal has the company remaining solvent, almost in "hibernation" until the end of next year.

It would then be reactivated to go live in 2025.

In communications, the company has assured stakeholders it is committed to fulfilling its legal obligation to creditors and employees.

And it is asking the producers who founded the company to provide support.

Circular Economy Minister Lorna Slater said she had been left with no choice but to delay the Scottish scheme after the UK government said it would not support including glass.

Reacting to Circularity Scotland's difficulties she said: "Circularity Scotland is an industry body, an organisation created by the drinks producers of Scotland to help them comply with the Scottish government's regulations.

"It is up to the producers of Scotland to help CSL move forward so that they can comply with our regulations in October 2025."

In a statement on Thursday, Circularity Scotland said it was working to manage the impact of the delay, and find a way for the business to continue but that staff had been instructed to go home.

"The unfortunate reality is that, at this point, we are not able to confirm whether our staff will be paid for this month or whether they will be able to return to the office," it said.

The statement added: "The board recognises that this is an extremely difficult time for our people and is working tirelessly to find a solution.

"We have remained in communication with our staff throughout and will provide updates to them at the earliest possible time."

Circular Economy Minister Lorna Slater said she had been left with no choice but to delay the scheme further

The DRS was designed to improve recycling rates for certain bottles and cans by providing a financial incentive to recycle and pick up litter.

A 20p deposit would be added to cost of items sold in Scotland and then the customer would get that money back when they took the empty container to a return point, either over-the-counter at a shop or using an automated reverse vending machine.

Circularity Scotland Ltd was set up in 2021 as a not-for-profit company to administer the scheme, funded by drinks producers.

But the DRS hit the buffers earlier this year when the UK government raised concerns it was incompatible with its own planned scheme, meaning Scotland would need an exemption from the Internal Market Act.

'Take responsibility'

The UK government eventually approved a partial exemption, but said glass bottles would need to be excluded.

It said this would bring Scotland into line with similar schemes due to launch in England and Northern Ireland in October 2025, which will not include glass.

The UK government said delaying the Scottish scheme was a decision made by the Scottish government.

A spokesperson said: "Earlier this year the drinks industry raised concerns about the Scottish government's deposit return scheme differing from plans in the rest of the UK.

"The UK government listened and worked at pace to accept the Scottish government's request for a UK Internal Market (UKIM) exclusion on a temporary and limited basis to ensure the Scottish government's scheme could proceed while aligning with planned schemes for the rest of the UK.

"The chief executive of Circularity Scotland was categorical that the scheme remained viable on this basis and that many other successful schemes run without glass."

Scottish Conservatives MSP Maurice Golden said: "The SNP and Greens who have botched this scheme from the outset must have known this could happen.

"Now their inexcusable failure means good people face losing their jobs through no fault of their own."

He added that Lorna Slater should "face up and take some responsibility".

Scottish Labour's Net Zero spokesperson Sarah Boyack said: "At what point are we going to have a joined-up approach to waste management so that consumers - people buying their bottle or their can of Coke know what is going to happen?

"For the businesses it is critical, so I think we need a bit of certainty and constructive engagement, not just people shouting at each other. That is the last thing we need."