Consultation Paper on Potential Legislative Measures to Implement Zero Waste

Annex D - Partial Regulatory Impact Assessment

1. Potential legislative measures to implement Zero Waste

This partial Regulatory Impact Assessment relates to 7 proposed legislative measures to implement Zero Waste in Scotland. The proposed measures are:

Number 1: Duties on public bodies and businesses to provide recycling facilities for customers and staff. The exact requirements would be laid down in regulations, which would be the subject of a full consultation.

Number 2: Targets on retailers in relation to packaging reduction and a requirement on retailers to provide information on the amount of packaging used. The exact requirements would be laid down in regulations, which would be the subject of a full consultation.

Number 3: Duties on public bodies and businesses to specify a minimum percentage of material made from recyclate in procurement contracts. The exact requirements would be laid down in regulations, which would be the subject of a full consultation.

Number 4: Duties on public bodies and businesses to have plans to prevent waste. The exact requirements would be laid down in regulations, which would be the subject of a full consultation.

Number 5: The introduction of deposit and return systems for drinks containers and other forms of packaging. The exact requirements would be laid down in regulations, which would be the subject of a full consultation.

Number 6: A requirement on businesses to send returns to the Scottish Environment Protection Agency on the amount of waste they produce. The exact requirements would be laid down in regulations, which would be the subject of a full consultation.

Number 7: Other measures to encourage waste prevention, including action on carrier bags.

2. Purposes and intended effect

Objectives

2.1 The purpose of the proposed measures is to support work on combating climate change by reducing the amount of waste produced in the first place, encouraging re-use, encouraging recycling, reducing the amount sent to landfill and ensuring that better information is obtained on the amount of commercial and industrial waste that is produced in the first place.

Timescales

2.2 In all cases, regulations will be required to implement the proposals. There will be full consultation on these regulations. Given this, the Scottish Government expects that the earliest any of the regulations could be in force would be one year after the Climate Change Bill receives Royal Assent. In some cases, such as deposit and return, a full implementation group might be needed to consider the matter in detail and regulations could take up to 5 years.

Background

2.3 On municipal waste, Scotland has to meet its share of the EU Landfill Directive targets for reducing the amount of biodegradable municipal waste sent to landfill. There are no such targets in place at the moment in relation to commercial and industrial waste. However, the forthcoming Waste Framework Directive will lay down some targets on recycling construction and demolition waste. Work on reducing the amount sent to landfill is also in line with work to reduce Greenhouse Gas emissions, as waste in landfill emits methane.

2.4 The Scottish Government is preparing a new National Waste Management Plan for Scotland, to outline the policies to move Scotland towards Zero Waste. The existing policy levers in place to reduce the amount of waste sent to landfill include:

Work on reducing the unnecessary use of raw materials and on waste prevention, including advice to business and householders, statutory and voluntary work on packaging, work on unwanted mail, work to encourage longer-life products and the re-use of products, the existing voluntary agreement to reduce the environmental impact of carrier bags by 25%, the food waste prevention campaign and home and community composting.
Work by local authorities to improve and enhance recycling facilities and provide information to the public on these facilities. Discussions are on-going with the Convention of Scottish Local Authorities ( CoSLA) about how best to allocate much of the resources from the Zero Waste Fund. In line with the Concordat between the Scottish Government and CoSLA, local authorities have also produced Strategic Outcome Agreement on services in their areas.
On-going work to develop markets for recycled products.
The UK Government's Landfill Tax, which is on an escalator and is a fiscal incentive to send less material to landfill.
Producer responsibility for certain materials, such as packaging, Waste Electrical and Electronic Equipment ( WEEE) and end of life vehicles. Producer responsibility is also being introduced for batteries.

Rationale for government intervention

2.5 If the proposals outlined in this consultation paper are not enacted, the Scottish Government expects that the amount of waste sent to landfill will continue to fall as some of the policy levers outlined above, such as Landfill Tax and improved recycling facilities for householders continue to have an impact. However, if some or all of the measures are proposed in this consultation paper are enacted, the Scottish Government considers that the amount of waste sent to landfill would fall at a faster rate, and that the overall amount of waste recycled would be greater, thus helping to reduce Greenhouse Gas emissions. The precise impact would depend on the measures implemented.

3. Consultation

3.1. The Cabinet Secretary for Rural Affairs and the Environment has consulted with other Ministers in the Scottish Government.

3.2. This partial RIA forms part of a wider public consultation.

4. Options

Option 1 is to implement the proposal. This would increase the amount of recyclate collected from public places. The risk is that requiring public facilities by statute might fail to take account of local circumstances. This risk would be mitigated by wide consultation on the draft regulations.

Option 2 is to rely on a voluntary Code of Practice. This would increase the amount of recyclate collected from public places. The risk is that a Code of Practice might be ignored. This risk could be mitigated by encouragement by Government, the public and staff to provide recycling facilities.

Option 3 is to implement the proposal in relation to public bodies. This would increase the amount of recyclate collected from public places. The risk is that practices would diverge between the private and public sectors.

Option 4 is to do nothing. The risk is that improvements in recycling facilities in public places would happen in a haphazard and random fashion. Increases in Landfill Tax may mitigate this risk as recycling will become a more attractive economic proposition than sending material to landfill.

There are other various options here, such as just imposing duties in relation to providing recycling facilities for staff or, alternatively, in relation to customers.

Option 1 is to implement the proposal and reduce the amount of packaging. The risk is that it might be difficult to lay down statutory targets on retailers in relation to packaging, given that retailers, in the normal course of business, change how they operate. This risk would be mitigated by full consultation on the regulations and could be mitigated by applying reduction targets to individual outlets of retailers, rather than retailers as a whole.

Option 2 is to take no statutory action. The risk is that voluntary work might have less of an impact than statutory requirements. This risk could be mitigated by ensuring that non-statutory commitments have challenging targets on packaging reduction.

Option 1 is to implement the proposal. The risk is that laying down requirements in stature might fail to take account of local circumstances (eg local shortages of products containing recyclate or a specific need to use certain materials to ensure buildings are in keeping with the local area). This risk could be mitigated by full consultation on the regulations and by laying down in the regulations would not apply when there are exceptional circumstances.

Option 2 is not to implement the proposal and to continue to rely on voluntary ways of encouraging public bodies and businesses to specify recyclate in contracts. The risk here is that specifying recyclate could happen in a piece-meal and fragmented way. This risk can be mitigated by providing further advice on specifying recyclate.

Option 3 is to implement the proposal in relation to public bodies only. The risk here is that there might be a divergence in practice between the private and public sectors. This risk can be mitigated by providing further advice to the private sector on specifying recyclate.

Number 4: Duties on public bodies and businesses to have plans to prevent waste. The exact requirements would be laid down in regulations, which would be the subject of a full consultation.

Option 1 is to require waste prevention plans generally. The risk here is that businesses and public bodies may be uncertain on what steps to take. This risk could be mitigated by providing advice.

Option 2 is to implement Site Waste Management Plans only, as in England. The risk here is that we may be missing other steps to reduce waste, recycle more and save costs (eg on operational waste, not just construction waste). This risk could be mitigated by providing advice on waste prevention plans generally and using construction procurement as a way of reducing waste.

Option 3 is to not to implement the proposal and rely on voluntary measures, as at present. The risk here is that voluntary measures may have less of an impact than statutory requirements. This risk could be mitigated by providing advice on measures that can be taken, including advice on how waste prevention can save businesses money.

Option 4 is to implement the proposal in respect of the public sector only. The risk is that this could lead to a divergence of practice between the public and the private sectors. This risk could be mitigated by providing advice to the private sector on measures that can be taken.

Option 1 is to implement the proposals for drink containers only. The risk here is that statutory deposit and return would be difficult to implement from scratch. This risk could be mitigated by setting up an implementation group, and by being realistic about timetables for implementation.

Option 2 is to implement the proposals for drink containers and for other forms of packaging. The risk here is that this would take even longer to implement. This risk could be mitigated by taking a staged approach to implementation, starting with the easier materials.

Option 3 is to not to implement the proposals and to rely on existing measures to increase the recycling of drink containers and other forms of packaging. The risk is that these may not be as effective as deposit and return. This risk could be mitigated by targeted information campaigns at householders and businesses.

Option 1 is to implement the proposals. The risk here is that they might be burdensome on businesses. This could be mitigated by only applying the requirement to larger businesses.

Option 2 is not to implement the proposals. The risk here is that the response to voluntary surveys is low. This could be mitigated by using other sources to gather data, such as regulatory returns and surveys commissioned by bodies other than SEPA.

Number 7: Other measures to encourage waste prevention, including action on carrier bags. The exact requirements would be laid down in regulations, which would be the subject of a full consultation.

Option 1 is to take powers to require retailers to charge for single use carrier bags, as the United Kingdom Government is proposing for the UK Climate Change Bill. One risk is that charging for bags would not necessarily change consumers' behaviour on waste prevention more generally. This risk could be mitigated by providing information to consumers on waste prevention generally. There would be full consultation on any regulations on charging for bags.

Option 2 is not to implement the proposals. The Scottish Government has set up a working group with retailers which is looking specifically on how to reduce the number of single-use carrier bags that are issued.

5. Costs and benefits

This would impact on businesses and public sector bodies.

The requirement would need to be enforced by local authorities. There would be some modest administrative costs for local authorities, as a result.

The new duty would have no overall cost impact so far as providing recycling facilities for staff are concerned. This is because any duty would not come into effect until 2010 at the earliest (after the passage of the Climate Change Bill and after consulting and making regulations). In 2010/11, Landfill Tax (at the Standard Rate) will be £48 per tonne. It is likely, therefore, that the costs to business of using a recycling service will be along the same lines as the costs of using a landfill service although, clearly, circumstances will vary from business to business depending on location and waste streams produced. When providing new recycling facilities for staff, businesses could also promote messages on waste prevention and reducing the unnecessary use of raw materials which would reduce costs to business.

DEFRA consulted last year on the introduction of more public place recycling in England on a voluntary basis. The DEFRA consultation included cost/benefits analyses: www.defra.gov.uk/corporate/consult/recyclebins/consultation.pdf In particular, this considered that one-off annual costs for England could be £1.1 million to £3.3 million and average annual costs, excluding one-off, would be £0.3 million to £0.9 million. These costs include the purchase, installation and servicing costs of the recycling facilities. This suggests that for Scotland one-off annual costs related to the introduction of more recycling facilities for customers could be around £200,000 and on-going annual costs could be around £600,000.

Overall, the benefits are increased recycling. A summary of the estimated carbon benefits of diverting waste materials from landfill can be found at Chart 4.1 of DEFRA's Waste Strategy for England 2007: www.defra.gov.uk/environment/waste/strategy/strategy07/pdf/waste07-strategy.pdf

This would impact on retailers.

The regulations would need to be enforced by local authorities and there would be a modest administrative cost for them.

There would be no costs to retailers in relation to this proposal. Any administrative costs in keeping records, sending in returns and providing information to customers would be outweighed by the cost and resource efficiencies in relation to using less packaging. These cost and resource efficiencies would be achieved by:

Using lower amounts of raw materials.
Using less energy in the manufacturing process.
Efficiencies in transportation.
Efficiencies in use of shelf space in store.

The Scottish Government considers that in construction projects a requirement for recycled content, if correctly stated, should result in no impact on overall material costs and entail minimal effort on the part of project teams. This is because:

Higher recycled content products are mostly 'mainstream' construction products. These are by their nature cost competitive (otherwise they would not be widely used) and are readily available.
On any project, most of the opportunity to increase recycled content typically lies in the top 5 to 15 options (e.g. blockwork, concrete, tiles, etc) for that project. As a result, it is not necessary to try to review large numbers of product options to make a major difference to the overall recycled content of a project.
Where it is possible to reuse site, or locally sourced, demolition wastes as bulk aggregate, this will contribute towards a recycled content requirement while also reducing cost (i.e. costs of buying and transporting primary aggregates and / or the costs of disposing of site waste).

The Waste and Resources Action Programme ( WRAP) have detailed guidance, available free of charge, on specifying recyclate and also have case studies.

WRAP commissioned BRE to assess the difference in environmental performance that results from using greater levels of recycled material at no extra cost in construction projects. For those product categories where sufficient data exists for conclusions to be drawn:

On average, adopting higher recycled content reduces overall environmental impact in

each product category; and

Higher recycled content may or may not reduce carbon impacts. In the case of

aggregates the key factor is to ensure that recycled aggregates are sourced more locally than the quarried aggregates they replace, or are processed using energy efficient equipment.

Number 4: Duties on public bodies and businesses to have plans to prevent waste. The exact requirements would be laid down in regulations, which would be the subject of a full consultation.

This would have cost benefits to business.

Envirowise Scotland estimate that wasting water, raw materials and utilities costs on average 4% of turnover.

The costs associated with preparing a Site Waste Management Plan should be outweighed by the benefits, so long as the project is sufficiently large to justify a Plan. In addition, the cost benefits can be increased if the need to reduce waste and treat the wastes that do arise in a sustainable way are taking account of when the building is designed and when any contracts are let to construct the building.

Detailed information on the costs and benefits of Site Waste Management Plans as implemented in England can be found in: DEFRA's cost benefit analysis: www.defra.gov.uk/environment/waste/topics/construction/pdf/swmp-cost-benefits.pdf

A statutory deposit and return system is in operation in Denmark.

Denmark has a population of around 5.5 million, which is about 10% greater than Scotland's population of 5 million.

Information on the costs of the Danish scheme can be found at www.dansk-retursystem.dk/content/us/about_dansk_retursystem/finances

This suggests that in 2006:

Logistics fees (covering administrative overheads, handling fees and efficiency improvements in stores) were around 96 million Danish Krone.

Collection fees (covering the costs of collecting and counting containers for recycling) were around 66 million Danish Krone.

This gives a total of 162 million Danish Krone

There are around 9.5 Danish Krone to a £.

This suggests that the Danish system costs around £17 million a year to run.

Although the Scottish population is lower, our collection costs may be higher as we have a large number of rural areas and islands. Therefore, it may be reasonable to assume that a deposit and return scheme in Scotland would cost around £17 million a year.

In Norway, there is a refundable deposit system for cans and non-refillable plastic bottles. More information can be found at: www.resirk.no/graphics/Resirk/Aarsrapporter/Resirk_aarsmelding_2006.pdf

The key costs identified in Norway for 2006 are:

Administration fee:	15 million Krone
Handling fee:	57 million Krone
Transport costs:	42 million Krone
Other operating costs:	9 million Krone
Administration, marketing and depreciation:	49 million Krone
Total:	172 million Krone

There are around 10 Norwegian Krone to a £ and the population of Norway, at 4.6 million, is similar to the population of Scotland. This again suggests that the cost of deposit and return scheme in Scotland would be around £17 million a year.

The benefits of a deposit and return scheme are that it would increase the level of recycling of the containers covered.

Number 6. A requirement on businesses to send returns to the Scottish Environment Protection Agency on the amount of waste they produce. The exact requirements would be laid down in regulations, which would be the subject of a full consultation.

There are around 265,435 private sector businesses in Scotland: www.scotland.gov.uk/Topics/Statistics/18389/Key

If it cost each business £20 to prepare and submit the return, this would suggest a total cost to business of £5,308,700.

Certain small businesses, generating small amounts of waste, might be exempt from the need to supply a return. That would reduce costs. Against that, some larger businesses would have to record waste from a number of outlets and that would increase costs.

The benefits of the proposal are that it would improve commercial and industrial waste data. This would assist the private sector when it comes to making decisions on infrastructure to treat waste and divert it from landfill. It would also help policy-makers when considering what policy instruments to put in place to encourage the diversion of waste from landfill.

Number 7: Other measures to encourage sustainable products, including action on carrier bags.

The previous Scottish Executive produced a Regulatory Impact Assessment on the Member's Bill on plastic bags. This RIA was based in part on a study by AEA Technology for the Executive. The RIA can be found at www.scottish.parliament.uk/business/committees/environment/papers-05/rap05-28.pdf#page=20

Summary of costs and benefits

Proposal	Financial costs/benefits	Environmental benefits
1. Duty to provide recycling facilities for customers and staff	No significant additional cost in relation to customers as costs of waste collection will rise in any event, due to the UK Government's Landfill Tax One-off annual costs related to the introduction of more recycling facilities for customers could be around £200,000 and on-going annual costs could be around £600,000	Increased recycling in public places
2. Targets on retailers on packaging reduction	Cost savings to retailers	Waste prevention
3. Specifying recyclate	No significant costs	Helps markets for recycling Reduces need for extraction of raw materials
4. Waste prevention plans	Cost savings to business	Waste prevention
5. Deposit and return	Could cost around £17 million a year	Increases recycling levels for drinks containers
6. Waste data returns	Could cost business around £5.3 million a year	Provides greater certainty for private sector investors seeking to invest in infrastructure to divert waste from landfill
7. Other measures	Depends on the measures taken	Depends on the measures taken

6. Small/Micro Firms Impact Test

Proposal 1 on providing recycling facilities for staff and customers, could impact disproportionately on small companies, who might have less space for recycling facilities. There may be a need for a de minimis exemption from any implementing regulations for small firms.

Proposal 2 on targets on retailers on packaging reduction, would be aimed at larger retailers generating more packaging. There may be a need for a de minimis exemption from any implementing regulations for small firms.

Proposal 3 on specifying recyclate would be aimed at larger contracts. There may be a need for a de minimis exemption from any implementing regulations for smaller contracts.

Proposal 4 on waste prevention plans would be aimed at larger businesses and public sector bodies. It is generally accepted that Site Waste Management Plans only have a positive impact when projects are above a certain size. Any implementing regulations would need to reflect the need to avoid imposing unnecessary burdens in relation to smaller bodies and smaller projects.

Proposal 5 on deposit and return could impact on all businesses selling drinks to the public in containers covered by a deposit and return scheme. This could impact disproportionately on smaller businesses, who may have less space to store returned containers and who may find it time-consuming to keep records on returned containers. As indicated in the consultation paper, the Scottish Government would consider setting up an implementation group before any regulations are made to consider all of the implications of introducing a deposit and return scheme.

Proposal 6 on waste data returns to SEPA could impact on all businesses in Scotland producing waste. There may be a case for any implementing regulations having a de minimis exemption for small companies generating low amounts of waste.

The impact of proposal 7 on other measures depends on what other measures are implemented.

7. Legal Aid Impact Test

We would not expect these proposals to lead to significant additional demands in relation to the Legal Aid budget.

8. "Test Run" of Business Forms

No new forms are being created at this stage. There will be full consultation before any new forms are created and finalised.

9. Competition Assessment

The provision of recycling facilities may be a small (added) attraction for customers and staff, but that is unlikely to give rise to competition issues. Smaller outlets may need to be exempt from any requirements given their lack of space for major recycling facilities.

It would be for retailers themselves to reach their own views on how to meet any targets. Smaller stores may be exempt because they generate less waste.

There are a large number of mainstream products made from, or containing, recyclate on the market, so this proposal does not favour specific products. The European Commission are clear that specifying environmental objectives in contracts is compatible with EU procurement law, so long as the objectives are specified from the outset, giving all potential contractors the opportunity to meet the objectives. The Scottish Government would avoid setting too high a percentage requirement for recycled content in relation to construction contracts and would set a requirement at project-level, not on individual product categories, to ensure that there was no conflict with the EU Construction Products Directive, which guarantees free movement of construction products across the EU.

Number 4: Duties on public bodies and businesses to have plans to prevent waste. The exact requirements would be laid down in regulations, which would be the subject of a full consultation.

No obvious competition issues. The introduction of more detailed Site Waste Management Plans in Scotland when compared with England (eg taking account of design and contract management) might improve the competitiveness of Scottish business when compared with England.

There could be competition issues here. In particular, the Scottish Government would need to ensure that there was no discrimination against products from other Member States of the EU. There may also be particular issues about smaller stores and the impact the proposal could have on them. We would also need to ensure that there was a level playing field between different types of receptacles.

The introduction of this requirement might help increase fair competition as all potential developers of waste management plants would have better data, in the public domain, on wastes arising and existing treatment methods.

Number 7. Other measures.

Any competition impact depends on the precise measures taken.

10. Enforcement, sanctions and monitoring

It is likely that this requirement would be enforced by local authorities. Local authorities would be most likely to act after receiving a complaint from a customer or member of staff about lack of recycling facilities. Success would be measured by the number of recycling facilities available; increases in recycling and decreases in the amount of waste sent to landfill.

The requirement would be enforced by the Scottish Environment Protection Agency or local authorities. The Waste and Resources Action Programme ( WRAP) can provide technical advice to retailers. Success would be measured by reductions in packaging.

The Waste and Resources Action Programme can provide technical advice in this area. In relation to public bodies audited by Audit Scotland, we would expect Audit Scotland to report on any breaches of the requirements. For other bodies, we would expect that local authorities would be given an enforcement role (eg as part of any mechanism used to spot check Site Waste Management Plans), although we would not expect there to be regular enforcement action. Success of the policy would be measured in an increase in the specification of recycled material and a decrease in the use of raw materials, with consequent environmental benefits.

Number 4: Duties on public bodies and businesses to have plans to prevent waste. The exact requirements would be laid down in regulations, which would be the subject of a full consultation.

Envirowise and the Waste and Resources Action Programme can provide technical advice in this area. In relation to public bodies audited by Audit Scotland, we would expect Audit Scotland to report on any breaches of the requirements. For other bodies, we would expect that local authorities would be given an enforcement role, although we would not expect there to be regular enforcement action. SEPA may also have a role in relation to Site Waste Management Plans. Success of the policy would be measured by decreases in the amount of waste produced, with consequent environmental benefits.

We expect this would be enforced by the Scottish Environment Protection Agency. There would be criminal offences in relation to such matters as not charging the deposit. Success of the policy would be measured by increases in the recycling rates for drink containers and other forms of packaging, with consequent environmental benefits.

This would be enforced by the Scottish Environment Protection Agency. There might be civil penalties for non-compliance. Success of the policy would be measured by increased accuracy of data on commercial and industrial waste in Scotland.

Number 7. Other measures.

Enforcement would depend on the precise measures taken.

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Consultation Paper on Potential Legislative Measures to Implement Zero Waste

Annex D - Partial Regulatory Impact Assessment