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That is how such schemes normally work. It is the case that return points need to take bottles back and store them until they are collected. I understand that, when a retailer registers to be a return point, it enters information on how many returns it expects to receive and how much storage space it has. That allows Biffa to put in its schedule how often materials need to be collected. That is normal for retailers. They will need to be able to store materials until they can be collected.

When items are returned, they need to be stored until they can be collected. Businesses already have storage space for various recycling materials and packaging materials. What is proposed is very similar to that. It is up to each business to figure out how it can store the materials. Unless they are exempt, businesses have an obligation to be a return point if they sell the materials. Biffa and Circularity Scotland are very happy to work with businesses to find out how that will work for them.

There is no particular rule about how businesses must store the returns. They could adapt to store them behind the counter, and I have seen versions that involve having designated wheelie bins in a secure area. There is a variety of ways to adapt storage space, and businesses can make the right decisions for them.

As far as I know, the exemption will last until a business wishes it to end. I am not aware of there being a certain timeframe, but I will be very happy to come back to the committee to provide clarity if that is not the case.

No. They just need to then apply to be a return point operator. That is fine.

Those exemptions were built into the regulations. That is not new; they were already in there. We streamlined the process to make it more straightforward for businesses to apply for exemption. We have brought in Zero Waste Scotland as our partner on that. There is no change to the regulations. We are just implementing them in what we hope is an easier and more practical way.

I am not hearing strong calls for the system to be an opt-in system. The obligation remains for anyone who sells these materials to be a return point for them, unless they are exempt and have applied for an exemption.

We have made the exemption process as simple and as streamlined as we can. Now that businesses are starting to use that process—registration for return points is open—I am sure that they will give us feedback and we can continue to make the system simpler and more straightforward, although it is already fairly straightforward for businesses. They can say that they are exempt for health and safety reasons and they are not that comfortable with handling glass on their premises. They can apply for an exemption and that can be done in a straightforward way.

That is correct.

Can you repeat your second point?

Okay.

All the work has been done in response to industry requests. One of the interesting things about the project is that the legislation, as passed by the Scottish Parliament, was relatively broad in order to allow the industry to come up with a solution that it wanted; the scheme is industry led.

There are two major parts: the producers who have to pay into the scheme and the retailers who have to implement the scheme, who will be selling bottles to customers and taking them back. You can imagine that there is a push-and-pull factor in that relationship: the producers want to pay as little as possible, and the retailers want to be paid as much as possible for the work that they do. Circularity Scotland is managing that internal negotiation and the tensions within the industry.

Specifically, the exemptions relate to the small businesses that saw the exemptions in the regulations and asked what that means for them. We have, with Zero Waste Scotland, put in place a process that is on the website and is now active. Handling fees and producer fees have also been addressed in the past few months. Circularity Scotland made calculations based on initial estimates of what fees might be, and the industry came back to say, “Please think again”, so it did.

The exemption process meant that Circularity Scotland could change its modelling about how many return points there would be and was able to adjust the figures: the producer fees have gone down and the return point handling fees have gone up. Circularity Scotland is a not-for-profit organisation, so it will not keep any of that money, which will go into reducing the cost of the scheme. The idea is that, as the scheme beds in and becomes more efficient and as we get past the day 1 costs and so on, the fees can be revisited in line with the efficiencies that will be built as the scheme goes forward.

Mercedes Villalba’s last point was about online sales, which are covered in the regulations. However, it was flagged up strongly to me and my colleagues that the online obligation as it was written in the regs was simply not deliverable. Businesses said that they could get on and deliver a more traditional scheme, such as other countries have, based on reverse vending machines and manual return points, but that the online take-back, which no other country implements to the extent that we had put into our regs, was simply not going to be possible within the timescale.

That is one area where I have listened to business and said, “Do you know what? You’re right. I can see that that will not be possible within the timescales.” As a result, we have committed to removing that obligation from the regulations. In other words, when the regulations come for amendment to Parliament, the obligation on online take-back will be removed, then phased in for larger retailers, starting from 2025.

The research that we have done has looked at similar schemes around the world. Because the deposit itself is fully refundable, it does not add to inflation; when you pay your 20p, you get your 20p back.