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Environmental Protection (Single-use Plastic Products) (Scotland) Regulations 2021; Further Information

Letter to Convener from Lorna Slater, Minister for Green Skills, Circular Economy and Biodiversity, Scottish Government, 9 December 2021

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Dear Mr Lockhart

NZET Committee Meeting - Environmental Protection (Single-use Plastic Products) (Scotland) Regulations 2021 Evidence Session

I provided evidence to the Committee on the Environmental Protection (Single-use Plastic Products) (Scotland) Regulations 2021 on the 30th of November. At this meeting I committed to provide further information to the Committee on several points, please find this information below.

Update on action that the Scottish Government is taking in relation to plastic fishing gear

Fishing gear lost accidentally or otherwise poses a considerable risk to marine life. As such, we are prioritising actions to encourage fishers to bring this waste ashore.

Marine Scotland Directorate’s marine litter policies are defined within our Marine Litter Strategy. This is currently under review and a public consultation on a refreshed strategy will be published on the Scottish Government website in the coming weeks. The refreshed strategy is being developed with our steering group, which is led by Marine Scotland Directorate and includes members of the fishing industry.

The updated strategy will build upon the current strategy’s themes of behaviour change, reducing sources of litter, improving monitoring, and working internationally. The refreshed strategy will focus on the prevention of litter reaching the marine environment, as well as being widened to better support the removal of marine litter. Actions flowing from the strategy will be delivered through partnership working with all key interests, including representatives of the fishing industry.

The Merchant Shipping (Prevention of Pollution by Garbage from Ships) Regulations 2020, subject to certain exceptions, make it an offence for UK vessels and other vessels within UK waters or UK controlled waters regardless of their size, to litter, which includes fishing gear.
The Scottish Government is committed to working with the fishing sector and coastal communities to develop proposals which will improve waste management and prevent litter originating from our marine industries.

We will seek to align with European environmental ambitions, to implement the EU Directive on Single-Use Plastics, which includes fishing gear actions, and on Port Reception Facilities to reduce marine litter.

We are supporting the development of a standard for ‘circular gear design’, which is also a requirement of the Single-Use Plastics Directive, to be delivered by December 2024. ‘Circular gear design’ refers to the design of fishing gear which takes into account what will happen to the item once it reaches the end of its life cycle. This means the component materials are chosen by considering ease of recycling, therefore reducing consumption of single-use plastics and increasing the re-use of valuable materials.

We work with the countries bordering the North East Atlantic through the Oslo and Paris conventions mechanism (OSPAR) to deliver a Regional Action Plan for Marine Litter.

We continue to fund the Komunernes International Miljøorganisation’s (KIMO or Local Authorities International Environmental Organisation) Fishing for Litter Scheme which supports the Scottish vessels in 20 ports to responsibly land and dispose of rubbish that they catch in their nets at sea. Since 2005 over 1,800 tonnes of rubbish has been brought ashore that would otherwise have stayed on the seabed.

Environmental Protection (Single-use Plastic Products) (Scotland) Regulations: Impact on businesses

A Business and Regulatory Impact Assessment (BRIA), including a Scottish Firms Impact Test, Competition Assessment and Consumer Assessment, was carried out when developing these Regulations. The final BRIA was published on 11 November 2021, building on the partial BRIA published on 12 October 2020. I have included a copy with this letter for ease.

A detailed breakdown of the financial costs and benefits of implementing the Regulations is included in the BRIA and this shows the overall impact to business of introducing the market restrictions would be -£676,000 over a 10 year period (classified as manufacturing costs) compared to business as usual.

Impact on the Scottish supply chain

Sections 7.1 and 7.2 of the BRIA provide an overview of the relevant markets and stakeholders affected by the Regulations. These are divided into ‘upstream’, ‘distribution’ and ‘downstream’ supply chain levels.

The ‘upstream’ supply chain level includes organisations that support the manufacture and import of single-use plastic products in scope of the Regulations. It also covers alternative items, as well as suppliers of raw materials, equipment, and plastics additives. ‘Distribution’ means firms involved in distributing single-use items. This includes packaging wholesalers as well as high street retailers. The ‘downstream’ level encompasses organisations that use single-use items in their provision of goods and services such as restaurants, hospitality and catering businesses.

Upstream

Section 7.2 of the BRIA provides a summary of the number of firms engaged in the plastic and rubber sector and considers three main segments: producers of polymers which could be used as inputs for the relevant single-use plastic items; producers of the single-use plastic items excluding expanded polystyrene (EPS) products; and producers of EPS products. More granular data on the production of specific single-use plastic product types were not available.

The BRIA concludes that Scottish polymer producers are unlikely to experience significant impacts from the policy change.

90-95% of the products that are not polystyrene that are covered by the Regulations are imported into the UK as a whole and are not manufactured in Scotland. The BRIA concluded that manufacturing of the relevant products does not form a significant part of the Scottish value chain for single-use plastic products. It noted that one firm which was identified through stakeholder engagement as being affected was Vegware, which produces some lines of cutlery and straws that fall in scope of the regulations but a significant proportion of its business is production of non-EPS food and beverage containers, which will benefit from the market restrictions.

For the polystyrene products that are covered by the Regulations the BRIA concludes that the majority are imported into Scotland from the rest of the UK and therefore not manufactured here either.

The British Plastics Federation was not aware of any producers of single-use items in Scotland and suggested that if there were any such producers, their share of total plastics production in Scotland would be very small.

The Competition Assessment found that for organisations operating upstream:

• The market restrictions are unlikely to significantly raise the costs of incumbent firms, causing them to exit the market. There may be some costs for adapting production to alternatives, but the small number of single-use plastic-producing firms in Scotland suggests that this would not affect many firms;
• Based on assumptions presented in the BRIA, the cost to the few manufacturers of single-use plastics in Scotland of transitioning to alternative products is likely to be relatively low; and
• The market restrictions are unlikely to significantly raise the costs of new suppliers relative to existing suppliers.

Distribution

For distributors the BRIA concluded that the single-use plastic items in the scope of the restrictions, the majority of which are provided to customers alongside food products, tend to comprise only a small part of the catalogues of catering distributors. Many of these firms
also currently sell alternatives to single-use plastic items. It is concluded that a handful of actors of different sizes at this level of the value chain in Scotland will be affected by the restrictions, though it will only affect a small part of their overall business.

The Competition Assessment found that for distribution based companies:

• There would be a degree of familiarisation costs associated with the restrictions. The introduction of the legislative restrictions would cause a period of adjustment to the new regime for all firms involved in the sale of single-use plastic products domestically. This is unlikely to threaten the number of distributors in the market;
• The number of wholesalers and distributors of single-use plastic products is unlikely to be significantly impacted by costs unless (directly or indirectly) any of these deal predominantly in the restricted single-use plastic products and face issues in sourcing alternatives or significant cost increases that they cannot pass on to customers; and
• The single-use plastic items in the scope of the restrictions, the majority of which are provided to customers alongside food products, tend to comprise only a small part of the catalogues of catering distributors. Many of these firms also currently sell alternatives to single-use plastic items. It is unlikely that such firms would be significantly affected by the restrictions.

Downstream

The impact on food and beverage service sector firms such as takeaway businesses was considered as part of the downstream supply chain BRIA considerations. It was concluded that some firms at this level of the value chain could be impacted by the Regulations.

Specifically, the Competition Assessment found that

• Downstream firms, unable to produce the single-use products themselves, would be indirectly affected by any price and availability issues that emerge further up the supply chain. It is possible that the costs of some firms will rise relative to other existing suppliers;
• However, the overall impact will be negligible because the price differential between the plastic product and the alternative is relatively small or non-existent in some cases; and • Incumbent firms may experience a small but insignificant cost rise through a degree of familiarisation costs associated with the restrictions but this alone is unlikely to threaten their number. A planned programme of public engagement, as well as the transition period for the introduction of market restrictions, is likely to mitigate the extent of familiarisation costs.

What representations have you had from legal or business bodies on regulation 12 within part 3 of the Regulations?

The Scottish Government received the following representation from the Law Society of Scotland on regulation 12 (offences by bodies corporate) within part 3 of the Regulations (previously numbered regulation 16):

“Regulation 16: Regulation 16 contains powers to prosecute at corporate level. We can understand why that may be appropriate, but it is necessary in considering these offences to outline how prosecution is to work. Again, developing some scenarios may help as would they propose prosecuting the person who hands over the item as well as the manager and director who allowed this to happen. In a licensing context, there is of course the right to prosecute the person who supplied alcohol in contravention of the licence as well as the manager responsible. Is this supply of a plastic cutlery comparable to that level of offence?” .

The decision of who to prosecute for an offence under the Regulations is an independent decision of the Procurator Fiscal, and it is not a matter which the Scottish Government would issue guidance on.

I trust the above sufficiently answer the queries I agreed to provide further information on.

Kind regards

Lorna Slater