SCOTLAND'S Deposit Return Scheme (DRS) cannot go ahead as planned, the minister overseeing it has told Parliament.

In response to a topical question from Tory MSP Liam Kerr - who asked whether the scheme would launch in March - Circular Economy Minister Lorna Slater said the UK Government intervention requiring the exclusion of glass means the scheme cannot continue as intended.

Slater said the DRS passed by the Parliament had been "shot down" and hundreds of millions of pounds of investment from firms in preparation for the inititative was now at risk. 

The minister said over the next 10 days the Government would be looking at a way forward for a modified scheme. She added she has written to the UK Government asking for an urgent discussion on its conditions.

Slater said: "Due to the 11th-hour intervention by the UK Government to change the parameters of Scotland's DRS, both to remove glass from the scheme and to add significant uncertainty to several parts of the scheme, it is clear that Scotland's DRS in the scope and form passed by this Parliament cannot go ahead as currently planned.

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"Over the next 10 days, and right now, we are urgently establishing to what extent there is a way forward for a modified scheme, its scope, terms and timescales.

"That crucially depends on whether the UK Government can provide timely, stable and reliable assurances on basic operational matters such as trading standards, the 20p deposit and producer fees. 

"It also depends to what extent there is industry support for an alternative scheme. I am writing to the UK Government today to ask for an urgent discussion about these conditions. I will update Parliament at the earliest opportunity."

First Minister Humza Yousaf asked the UK Government to U-turn on the conditions it had laid out for Scotland to get an exemption to the Internal Market Act, but ministers stood firm and said glass must be excluded for Scotland to be able to launch its scheme in March ahead of other UK nations.

Yousaf said the scheme could be scrapped "in its entirety" if the UK Government did not back down.

On Tuesday, Biffa - the firm contracted to deliver logistics for the DRS in Scotland - delivered a fierce warning against scrapping the scheme altogether,  claiming to have already invested more than £65 million in preparation.

Asked by Tory MSP Graham Simpson if a “modified” DRS, without glass bottles in it, could be up and running by the current launch date of March 2024, Slater told him removing these from the remit of the scheme was a “substantial change”.

She added: “To decide whether we can go ahead with an alternative scheme without glass is a very substantial decision.”

She said she and Yousaf would be meeting with industry representatives on Wednesday to discuss this as part of efforts to “decide whether it is feasible for us to go forward”.

Circularity Scotland has already made clear it can “absolutely” go ahead with the scheme without glass bottles being included.

Small business leaders, meanwhile, claimed that while DRS was “well intentioned”, the scheme was “fundamentally flawed”.

Speaking about the initiative, Andrew McRae, Scotland policy chair of the Federation of Small Businesses, said: “As time went on, it became apparent it wasn’t going to work in its current form and was going to damage small producers and retailers on its way down.

“We now need to get on with developing a system that stands a better chance of working – one that makes it as easy as possible for consumers, producers and retailers.

“Key to that will be learning the lessons from this episode and bringing the sort of small businesses, on whom government will be relying to deliver any such scheme, in on the ground floor.”

While the Scottish Government was seeking to bring in its DRS in March next year, similar initiatives for the rest of the UK are not planned until 2025 at the earliest.