The Welsh Government withdrew from the UK-wide deposit return scheme due to time constraints that prevented the UK Government from considering a request for an exclusion from the Internal Market Act, Circular Online has learned.
As the Welsh Government sought to include glass in its deposit return scheme (DRS) it would have needed an exclusion from the United Kingdom Internal Market Act (UKIM Act).
The Act was established in 2020 to regulate trade between England, Scotland, Wales, and Northern Ireland after the UK’s exit from the European Union.
Its primary purpose is to ensure the free flow of goods, services, and people within the UK by maintaining a cohesive internal market while respecting devolution agreements.
Circular Online has learned that the Welsh Government did not request an exclusion to the Act, as the UK Government indicated it would not be able to consider such a request “within the time necessary” for Wales to join the joint process of appointing a Deposit Management Organisation (DMO) for the four nations’ schemes.
An official in the Department for Environment, Food and Rural Affairs (Defra) did not say if a request would have been granted but said all requests would be considered on a case-by-case basis.
What’s happened so far?
Earlier this month, Wales withdrew from developing an aligned deposit return scheme (DRS) across the UK.
In a written statement, Welsh Deputy First Minister Huw Irranca-Davies explained that Wales could not proceed with a DRS aligned across the UK due to issues caused by the UKIM Act.
The Deputy First Minister wrote: “In partnership with the UK and Devolved Governments, we have been working to initiate a joint process to appoint the DMO for our respective schemes later this month.
“However, in the time available it has not been possible to address the issues to the operation of devolution caused by the United Kingdom Internal Market Act 2020, inherited by the UK Government from the previous administration.”
The statement continued that as Wales is a high recycling nation its DRS must support the transition to reuse to build on and not detract from Wales’s recycling progress.
Why did Wales withdraw from a UK-wide DRS?
A Welsh Government official told Circular Online that tailoring the DRS to Wales’s needs could have engaged the mutual recognition principle of the UKIM Act.
The mutual recognition principle means a “good” that complies with regulation permitting its sale in the part of the UK it is produced in or imported into can be sold in other parts of the UK without complying with equivalent regulation there.
This means that if Wales wanted to include glass as an in-scope material in its DRS, the Welsh Government would need to request an exclusion from the UKIM Act.
An official in the Welsh Government said it did not request an exclusion from the Act as the UK Government indicated they would not be able to consider it “within the time necessary” for Wales to join the joint process to appoint a DMO for the four nations’ respective schemes.
When approached by Circular Online, an official in Defra said any formal request made by the Welsh Government for an exclusion from the UKIM Act would be considered based on its merit.
The previous Environment Secretary Steve Barclay said he would decline any request from the Welsh Government for an exclusion.
Scotland’s DRS collapsed in 2023 after the then Conservative Government declined a request for full exclusion from the UKIM Act, which meant the country could not include glass in its scheme.
An official in the Welsh Government said it will work with the UK and Devolved Governments to improve the functioning of the UKIM Act and “how it operates with rather than cuts across devolution”.
A UK Government spokesperson said: “We will continue to work collaboratively with the Devolved Governments and industry to ensure our scheme works for businesses and consumers while creating thousands of green jobs, driving investment into new infrastructure and moving towards a circular economy.”
How does Wales want to tailor its DRS?
A Welsh Government official told Circular Online that as Wales is delivering recycling rates comparable to international DRSs a “narrow, recycling-only scheme does not work” in a Welsh context.
In his Ministerial statement, Irranca-Davies said a Welsh DRS will aim to support the transition to reuse.
Wales has also consistently advocated for a DRS that includes glass an in-scope material.
However, Circular Economy Minister Mary Creagh has confirmed the DRSs in England and Northern Ireland will only include polyethylene terephthalate (PET) plastic, steel, and aluminium drink containers.
Why does Wales want to include glass in its DRS?
A Welsh Government official said that as the transition to reuse is not just about glass, excluding it from the scheme would risk creating an unlevel playing field with in-scope materials.
The official also explained that not including glass in the scheme would require the Welsh Government to introduce a separate collection mechanism at scale.
They said that this would add “significant” costs to the supply chain and increase the “regulatory burden”.
