good morning everyone and welcome to the 11th meeting of the NetZero energy and transport committee for 2023. today we have apologies from Ash Regan and I welcome Colette Stevenson joining us as a substitute member the first item on the agenda is taking uh business in private and that is whether we have to consider whether to take items six and seven in private item six is the consideration of evidence we will hear today as a part of our inquiry into Scotland's electricity infrastructure inhibitor or enabler of our energy Ambitions and item seven is a consideration of evidence we will hear today in relations to Scotland's deposit return scheme how we agreed to take those items in private we are agreed so our next item agenda item two is to uh is consideration of a consent notification on the reach Amendment regulations 2023 this is a UK statutory instrument where the UK government is seeking the Scottish government's consent to legislate in areas of devolved competence the committee's role is to decide whether it agrees with the Scottish government's proposal to consent to the UK government making these regulations within devolved conference and in the mat in the manner that the UK government has indicated to the Scottish government at our last meeting we considered the notification agreed to request further information about the proposed extension to the registration date and its impact in Scotland from The Irregular relevant regulatory bodies and the UK government there has been additional letters received which I believe all the committee now have we also agreed to invite the minister for the environment and land reform to give evidence today we have until the 31st of March to respond to the Scottish government's notification so straight after today's evidence session we aim to come to a View today and I'm pleased therefore to welcome Murray McAllen the minister for the environment and land reform thank you Minister for attending at short notice I'd also like to welcome Dan Merkel the chemicals team leader and Elisa Hein lawyer from the Scottish government now we've got about 20 to 25 minutes for this item before we move into questions Minister I believe you would like to make a very brief opening statement yes we'll do convener thank you very much and thanks for having me here today to discuss the proposed statutory instrument to extend registration deadlines under the transitional Arrangements of UK reach regulation the statutory instrument is to extend by three years the dates by which manufacturers or suppliers of chemicals in Great Britain or as I'll refer to it here in after GB it must register their substances in UK reach now following feedback work is currently ongoing looking at how registration Arrangements may be improved in UK reach the extension is proposed to allow this work to be completed and to give business certainty on their obligations in the meantime Now by we have a very brief background the UK reach regulation replaced the equivalent EU reach um regulation following EU exit UK reach applies in GB and regulates the marketing and use of the majority of chemicals on the GB market and now the brexit that was eventually negotiated by hard brexit it meant we were denied membership of the European chemicals agency and as such we've had to set up an entirely autonomous regime that essentially matters that of the EU now registration under UK reach is a significant undertaking for businesses in GB likewise for the health and safety executive which delivers most of the technical functions of the UK reach and defra as the UK reach policy lead these proposed extensions to the registration deadlines arise from the significant financial and practical challenges that registration poses for GB businesses um now just to put that into context compliance with EU reach was estimated to have cost UK businesses some 500 million pounds the current defra estimate of cost to UK business under the new regime is between 1.3 and 3.5 billion pounds as well as cost of business in Scotland we have a large number of smes who are unlikely to have directly interacted with the with the EU reach and will have relied on others in the supply chain to do the necessary on their behalf so an extension is actually particularly important for for Scottish business their supply chains and ultimately consumers in Scotland and concerns have been raised in potential improvements have been considered and while that work is underway the three-year extension is thought to be um appropriate now the committee will recognize that some of the you know the concerns that I've set out there are largely about business they're largely about costs but you will recognize that in my role as Minister for environment and need to be content about the impact of any changes on the environment and now while the proposed extensions are far from ideal I am satisfied that there are sufficient mitigations in place such that the uh the potential for negative consequences for the environment is low and just by way of practical example of that during this extended transitional phase suppliers and users of chemicals and get bitten will continue to follow the safeguards that are in place under the EU reach as all chemicals subject to the proposed extended deadline where are already registered under that regime and perhaps we can get into a little bit more of that in questioning but in summary I consider the situation to be far from ideal um but as is the case for most things with EU exit frankly but I do believe that the risks to Scottish business consumers and the operation of the regime Itself by not agreeing to this proposal is greater than the risk to the environment from consenting to it I'm happy to take questions and I'll certainly bring in my colleagues too because there's some quite technical aspects of this thank you very much Minister the first question is going to come from the deputy convener Fiona thank you and good morning Minister and the issue of chemical registration was one of the key areas of concern when the UK left the the EU and so in terms of the SSI and in front of us how has the Scottish government assessed the implications of the proposed extensions to registration and compliance uh checking deadlines for areas that are within default competence what have you done um so it's a very good question um the the area of chemicals is quite a complex split of devolved and reserved issues um for example the environment itself being devolved but health and safety being reserved so we've very much worked um with defra and with the health and safety executive here at the competent Authority um for these matters at UK level some of the points that I have reassured myself on about the impact on devolved matters are those which I was beginning to allude to in my opening remarks there firstly that we're only talking about um chemicals the only chemicals affected by the transitional arrangements are those which are already under the EU reach regime so I'm comfortable that the rules there will continue to apply to them any new chemical any novel use will have to be will have to register um straight away and will not be caught by any extension that we are proposing here and I think also it's about recognizing that there is risk to not acting because as if we have a registration um a registration process Which business and industry is telling us they cannot comply with in the time that they are going to have to well the risks of not acting and having a such a system which is unworkable is more problematic both to business and the environment I would suggest that they're not acting and so all of that has been considered officials have worked very closely with different with health and safety executive here at the competent Authority and all of that so so you've addressed the point that there are risks to actually delaying um the the approval but in making that assessment um and in the overall extension we understand that from CPA that they hadn't been sought advice from by the Scottish government so how did you make your assessment on this um so just to address the point on CPA they are obviously the regulator for environmental issues in Scotland and they will be for the environmental impact of reach overall but the competent Authority for the issue of registration is the health and secretary executive and that's uh I think that was a decision that was made across the board with Scottish ministers wealth ministers Etc so they are the equivalent of CPA in this and therefore we've been working closely with them on it but um officials are keeping sepa very closely updated with all of these uh developments and they are always welcome to you know give us their feedback on that I don't know whether Dan you might want to say more about the engagement you've had with super but certainly they are not the official body for this oh and I think the convener said we need to be as short as possible I'm happy for you to come in Dan but I I think the ministers made it clear are you happy with that yes yes um and my final question is about the common Frameworks now they're going to be key for a whole aspects of um the ongoing EU exit so how has the common framework on chemicals and pesticide and its Associated governance structures been used to support the agreements between the UK and devolved governments on these proposals and do you think the common framework is functioning as anticipated and is this an example of that or otherwise I think this is an example of that I think as getting to this point and the the um I suppose the cross UK agreement that we've reached to get here is a result and as an example of the common Frameworks on chemicals and pesticides functioning thank you um Mark you've got some questions yes and thank you the crazy this morning um I wanted to ask you about some of the concerns that environmental stakeholders have and about how that you've you've addressed those in discussions within the common framework and coming to the decisions that you have collectively so one of those concerns is around Divergence within this delay period so I understand that at the moment the EU is considering the phase out and has taken the first steps towards phasing out 47 groups of chemicals under their regime but the UK is only considering three under the UK scheme in terms of that first phase of considering the environmental and health impacts of chemicals and how quickly they can be phased out so I'm wondering do you see the potential here for Divergence given the deadlines and the lack of pace with the UK scheme sure put us in place so I think I would split that the answer very briefly into two points firstly with what we are dealing with today which is just squarely about the extension of the deadline rather than what system might replace uh the registration Arrangements when it comes squarely to the point about the decision for today and and the extension to the deadline I don't really see I don't have much of a concern as regards Divergence because I think we're talking here about trying to have a complete register and getting there in a time scale that's realistic and I don't see much scope for very concerning Divergence between us and the EU in that regard in fact they are registered I think took 10 years to complete and if we make if we agree to this today I think that what we'll be dealing with in UK reach will be about a similar time scale I think the risk of Divergence comes further down the line when we're looking at well what system is going to what changes are going to be made to the system that this time extension is needed to to look at and uh officials are very much involved in the working groups looking at what might be changed to um registration and I think you know we've been quite clear from the outset that we would not tolerate any diminution and standards um and that's the that's our starting point for the work with devra that's just very much in the early stages that I pointed out to you though is a live one so 47 groups of chemicals that are going through the first phase of being you know the process to be being phased out within the EU and only three groups of chemicals within the UK system so how do you how does the kind of alternative model of UK reach ensure that we don't have that Divergence going forward because that feels to me like a very live case of of Divergence that's already creeping into the system so how will the model ensure that as we understand more about chemicals and the health environmental impacts decisions can be made quicker to get them on the path towards being phased out yeah um well I might I might come to Dan if he's got anything else to offer on the specific point that you raised but I think for my part and for today I'm content that extending the deadline doesn't increase the risk of Divergence and as we go in to develop changes to the registration system my officials and I are very clear that we won't we won't um tolerate any diminution and standards and I'll be very watchful for any risk of Divergence there and we would want to see that mitigated as far as possible but Dan I don't know if you know more about the specific that Mr Russell is is talking about there um yeah I'm happy to come in thank you so so I think you're referring to restrictions under reach which is a obviously a separate process from registration although registration data will be used in the restrictions process to inform those dossiers so um under UK reach we have two projects ongoing one is this alternative transitional registration model which is looking about fixing the problems we're talking about here today the other big project is called reach improvements and that's about trying to change wider aspects of reach to make them better and Scottish Scottish government and Welsh government are particularly focused on restrictions under that project and we want to see better use made of decisions and work done in other countries and other regulatory regimes so that they can be fast-tracked into UK reach and hopefully save resource that can be put into specific issues around um chemicals on the GB Market and with the alternative registration model the idea is that the information requirements on on intrinsic Properties or chemicals shouldn't change much but we want to see an increased emphasis on use and exposure in the GB context which should really help identify where there are risks that need to be controlled through for example restriction thank you okay thanks for that um got another couple of questions on on this I mean to ask you to be brief on the basis or other committee members okay well I'll roll them up together then I mean there was a decision made to not go for the the preferred option that was put forward by the UK government which was a a delay of three years two years and one year for different categories and instead another option was taken to go for three years three years three years for all those three categories what was what was the Scottish government input into that decision which then was I think it was answered by industry trade associations ngos you know a broad spectrum although admittedly it was very it was uh the majority of the respondents where trade and Industry Representatives that was very clear that the three years extension across the board was the the workable option in their view as opposed to I think what the UK government's preferred option was which was to um extend the first by three the second by two and in the latter by one um and I I think that on the backdrop of that assurance that these extensions in the view of defra and the view of the health and safety executive are not likely to be detrimental to the environment I was happy that three years across the board was appropriate if that's what trade and Industry believe is necessary to make this right because again it goes back to the point I raised with um Fiona Hislop that the risk of not getting this right is substantial and if we need that time then we need the time okay next questions come from uh Jackie Jackie don't love thank you good morning a realistical cultivative open Scottish government they're from consenting to the extension deadline for registration and compliance and what would happen if Scottish ministers refused consent um I I don't think ultimately that there is a realistic alternative I think that you know we spoke about the common Frameworks these are the the ways that we've agreed to try and work together in the post-brexit landscape um and I think that so far that has worked well one of the problems that I you know personally I think we have with UK reach is that we're no longer doing it on a International basis like what we did with EU reach to suggest that we could do anything you know even more instiller within Scotland I don't think would be credible so it's I think it's better for everyone involved that we continue to work together continue to take advice from the health and safety executive and continue to consult and you know as for the the bit of work that's ongoing just now on what might be changed with the registration process I'm I I'm comfortable with the fact that Scottish ministers consent will likely be required to any of those changes and that a statement in compliance with article one of reach UK will be required which will demonstrate how it doesn't represent a difficulty for the environment okay do you want me to ask my other question though are we yep by all means it's just to ask if you anticipate if there's going to be any other forthcoming amendments required for the reach regulation um I wouldn't anticipate any further changes as to the time scales I wouldn't anticipate a further extension although I suppose it's not impossible but a lot of resources currently being arranged in defra I understand to make sure that it's done in the appropriate time but I expect we will be back at some point discussing uh substantive changes to the registration process because of course it's examining that that the extension is required for okay thanks Jackie uh Colette I think you've got some questions yeah um good morning Minister and um this questions are fairly long one so bear with me so they were obviously aware of other significant developments and that the studio including the 2020 EU chemical strategy and the forthcoming UK chemical strategy as well so how is the Scottish government and the agencies engaging with these developments and what resource is committed to this and while the forthcoming UK chemical strategy apply in Scotland in the devolved areas um and obviously the Scottish government as well feeding into that strategy as well um I'll try and answer that and if I need to hand over to my officials I perhaps will because I know they'll be uh involved with that just now and basically I think the the UK strategy is currently being developed um I understand our teams are feeding into that and their position at this point is that we are um currently withholding our approval of it why else do we make sure that the final version um reflects the input that we've made and it you know is in line with Scotland's interests and I think that that's a similar position that Welsh ministers are currently making um Dan or or else I may have more to add to that but just briefly on the EU strategy I think we are keeping a watchful eye on it and actually I suspect that a lot of what we will be feeding into the UK strategy development will be a part of learning from the EU strategy as well of course in line with our desire to retain a pace with the EU I don't know if there's anything to add to that um yeah okay thank you the other thing I wanted to um ask you about was um in terms of the consultation that's been been rolled out and the 20 compliance checks protonage coming in are you comfortable with that level yes I'm comfortable with 20 I think that's the um I don't really I don't think that's something that has been up for discussion as part of this development I'm comfortable if if the health and safety executive believe that 20 is sufficient for them to get uh the right kind of um return that they need then yes I think the point for the extension is that that will have to come after completion of the final registration deadline start right down yes just in terms of the impact assessment being carried out from I know it's from more so from the UK government aspect but are you relatively comfortable in terms of the costs and the risks there with that and the extension yes yes I am actually and I am in um agreement with um Rebecca Poe who I know uh wrote back to the committee um and thank you for sharing those documents with me and I think just as she put it we believe that allowing the extra time could lessen potential burdens on businesses without significantly impacting on human health and Environmental Protections we also recognize the potential for better quality data and maximizing chances of compliance under the longer time scales um I'm in agreement with her on that okay thanks Winston thanks um and just to remind uh people who who are not at this meeting that letter came in quite late last night so it will be published on on the website so people can see it um Monica I think the next question is yours um thank you convener um in your remarks that this involves a complex split of default and reserved issues so I wanted to ask if you can outline how the government the Scottish government will ensure it's evolved interests are represented in the development of the proposed alternative registration process for UK reach yes of course um so we are through the common framework process we um liaise very closely um and we will continue to do that um our my officials are part of the working group which is currently looking at um development of the registration system and how it might change and as I say we've been given assurances about defra um making sure there's sufficient capacity Etc to get that work done in in the time period when it comes to approving whatever the final outcome is um because of the statute under which the process is undertaken the Scottish Minister's consent I understand will be required and therefore the the Parliamentary scrutiny will be engaged there and also as I think I said um I think it was in response to Colette Stevenson the it will have to be accompanied by that statement in line with a UK reach article one which sets out the confidence that it's not um that it's in line with Environmental Protection and doesn't threaten any of that thank you for walking us through that um I know David urgence has been mentioned a few times today and some of the some of the risks um do you have concerns that this um registration process will represent a significant Divergence from ego reach um and we're also wondering um are you aware of any um desire or appetite in the chemicals industry or in the UK government to move away from mirroring eager reach so yeah absolutely so the first point I'm not concerned that changes to the deadlines are a risk to Divergence or convergence and I think that uh the what might replace or change is still very much at the early stages so I would have to um withhold my view on that whilst we develop it but we will certainly be making the argument for uh Divergence being minimized as far as possible and I think that I mean I I can't really speak for industry I can't speak for the UK government but my impression is that it's about Industries problem is the cost of obtaining the data that's required under UK reach much of which they don't own is what is it what the barrier is so we will have to find ways to try and overcome that and that's very much early days but our position will be to minimize any Divergence as far as possible as that develops just last question in Attica Scottish government will continue to engage with industry and stakeholders on that point yes we certainly will and I suspect there will be further consultation on the substance of whatever is expected to replace that yeah thank you flipping around are there any other questions mark I cut you off I could let you in briefly if there was a subsequent question okay thank you uh thank you Minister for attending today and giving those answers um we want to move on to the next agenda item if I may uh yes of course Minister I I'm sure you'll want to slip out and to carry out your other duties while we consider uh the the uh uksi so our next item is a business is to formally consider the type 1 consent notification sent by the Scottish government relating to the reach amendments regulations 2023 in light of the evidence that we've just heard and the additional letters um and I before I go any further I'm just going to remind members that as a farmer I do use chemicals I have some knowledge of of the chemical system but just so there's no do party about that if members are content for consent to be given the committee will write to the Scottish government accordingly and writing to Scottish government in this way we have the option to pose questions or to ask to be kept up to date on relevant developments if the committee is not content for the proposal we might have to make one of the several recommendations which I could go through I wondered if there are any comments from committee members on this uh Mark you want to make a comment yes thanks convener um I think that was a useful session today looking in some detail at the at the reach model and both registration and compliance but also how the whole model is evolving and developing over time and I just think it's important now post-brexit landscape that you know committees are able to scrutinize how common Frameworks are working how stakeholders are interacting with the development of these regulations going forward so I felt that was useful um I I agree that I don't think there is a an alternative route that is desirable or achievable for Scottish government to take in relation to this so I'm content to accept the the regulations that are that are before us but I do think there's a need for that ongoing scrutiny and I I would welcome more information about the alternative registration model as that's developed over time I think the The Wider model which the minister talked about particularly in relation to the points made about Divergence and about reviewing existing chemicals that we're all using at the moment but which may impact on our health or our environment I think you know that needs watched as well so there are questions there about the pace of how that that development how that model is developing and the pace of how particular groups of chemicals are being reviewed continually as our knowledge and understanding of their impact develops as well so I think if those uh if those points could be reflected in a in the last two minutes that'd be good I feel this is the start of a conversation at the end of it um Fiona I think yeah I agree with Mark and I think we should write in those terms to the Scottish government I'm also uh minded that we should um acknowledge uh the letter from Rebecca Powell we obviously wrote a quite short notice following our meeting last week and I think the prompt response was very helpful and I think we should indicate that I think two things from that letter was one and she refers uh the UK Minister refers to the alternative transitional registration model which I think for UK reach which I think we should express our ongoing interest in and also in that letter she says we are conscious of the question of Divergence and that both industry and NGO stakeholders wish to keep unnecessary Divergence to a minimum so I suppose our issue is what is necessary Divergence and that's what we want to continue to monitor but I think we should write those terms and thank the UK Minister for replying so promptly because this is such an an area concern and I'd also agree with Mark that that indication of how common Frameworks can and should work is going to be important to us in our ongoing work in looking at implications particularly for the environment okay thank you does anyone else have any comments okay so on that basis I'm going to ask the the substantive question is and that is is the committee content that the provision set out to the notification uh should be made to proposed UK statutory instrument now in agreeing that if we do agree it we can write to the Scottish government along the lines that have been suggested suggesting we want to be kept informed of the pace of of the change and any review of chemicals in the future which I think would be a useful thing to do and as part of that as the deputy convener has suggested we could write to Rebecca thanking her for a prompt response ask her to to detail out a bit more information on the alternative transitional registration and what Divergence means so is the committee happy with that yes okay um clerks are happy as well so we know what we're doing um I was going to uh pause um the uh session to allow a changeover of witnesses but they've done it um in before we've uh before we've even had a chance to complete our business so we're going to crack straight on our next item of business is an Evidence session as part of our inquiry into Scotland's electricity infrastructure inhibitor or enabler of our energy Ambitions just remind everyone the aim of the inquiries to scrutinize what electricity infrastructure will be needed to realize the Ambitions set out in the Scottish governments recently released draft energy strategy and Trust just a transition plan and what will be needed to deliver that infrastructure this is a short inquiry leading to a report to the Scottish government as it finalizes its strategy last week we heard from our in our first evidence session from two panels of Key Energy industry take stakeholders and experts today we're going to hear from off-chem the government regulator for the electricity markets in Great Britain we will discuss the evidence heard so far as the off gems views on the delivery of the aim set ads in the draft energy strategy and on the decarbonation of our there's a lot of long words in this decarbonization of our electricity infrastructure I'm pleased to welcome Stephen Mahone the deputy director of networks and head of Scotland of gem and Jack Presley Abbott deputy director for Energy Systems management and security often thank you for our accepting our invitation and we're delighted to have you both here before um we start I believe Stephen you would you would like to make an opening statement yep um good morning convener and Committee Member present and thanks for inviting us to give evidence this morning I think as you said in your introduction I'm Steve McMahon and I'm header of James office in Scotland but I'm also the the deputy director that leads much of our work on electricity Network regulation I'm joined by my colleague Jack Presley Abbott who's also a deputy director based in in our Glasgow office at and Jack oversees much of our work on connections policy and Market design now taking a step back the ipcc report that was published last week concluded that Swift and drastic climate action uh kind of only Swift and drastic climate action can have irrevocable damage to the world um the report runs to thousands of pages as you'll be aware but the message is crystal clear it I either we act now or it will be too late and the evidence has never been as clear as as at present and we need truly transformational and accelerated action across every sector including energy now given what's unfolded across the energy sector particularly over the last couple of years not least Fallen events in Ukraine alongside um ambitious government targets for Renewables and other forms of generation we already knew that we need to take salary and the shift away from fossil fuels to clean energy and that will help to reduce costs to customers by breaking the link between electricity bills and gas prices it protects our security supply and it provides like secure and reliable homegrown energy and it helps to protect the cost customers from the dangers of unmetic unmitigated climate change um so basically we're at the cusp of a transformational shift in the Energy System probably the biggest changes that anyone involved in the sector will have ever seen and as the economic regulator of that energy sector with a responsibility to protect protect consumers and representing their long-term interests this is a big change to the environment in which we we operate we need to act a pace to enable cost-effective infrastructure investment to transition away from our high dependence on fossil fuels and deliver a homegrown cheaper and more secure in a Zero Energy System so over the next 10 to 20 years in particular that's going to require an immense amount of investment in new network infrastructure that needs to be built on a coordinated way across generation and demand built both at PACE but also at a reasonable cost that's the defining challenge that I think we Face ensuring our regulation helps this infrastructure and to be built as rapidly and efficiently as possible so when the wind farms right down to electric vehicles are ready to connect onto the system the grid capacity is already in place made possible with accelerated planning environmental consents and network companies incentivized to deliver on time the committee's call for evidence specifically like poses the question about whether the electricity infrastructure is an inhibitor or an enabler of Scotland's energy Ambitions or responses that must be an enabler and everything that we are doing is geared around ensuring the early economic regulation can help build the system we need at PACE but in a way that protects energy consumers both now in the future thank you thank you very much Stephen just before we move into questions uh I'd like to remind members and those people who are listening that as a farmer and a landowner I have electricity transmission lines across the farm in the form of 11 KV lines the small ones the 33 KV ring Mains which are the bigger ones and I'm in negotiation with eighth for a 132 KV power line to go through the form or at some stage all of those will generate some income for the farm so I want to be and no doubt that I have some interests and I will continue to make this decoration as and when I think it's appropriate do so I do not think it inhibits me from doing my job as convener but I want committee members to know that the first questions therefore will come from Mark Russell mark yes good morning thanks for joining us um so the draft energy strategy um discusses a range of of targets um for onshore wind um that's the potential for a Target or targets for solar to emerge from the energy strategy as well perhaps at different scales embedded you know agricultural scale solar as well um and you know there's there's Marine you know potential for marine as well so can I ask you about how those targets uh influence your approach to Market design and regulation um which can we start with that so perhaps if we start with solar would be I mean I think more broadly clearly government sets targets Scottish government has targets the UK government sets targets and we see those policy Ambitions growing and growing but every year um how do we treat the targets well the targets are an important part of our responsibility I think we interpret our remit to deliver the policy Ambitions and the decarbonization targets that are set by government I think the key thing is then how that then plays into the system planning I mean I think you had an Evidence session last week that we're moving to a kind of more a coordinated holistic Network planning and it's important that the policy aspirations the targets for any source of generation are included in that planning process I think we also have to work with government just to understand what those targets are and so does the industry I think we believe that we can help inform like those targets and how they'll set um and like the policies that will sit behind them um sometimes that might be the difference in terms of looking at the challenge is this deliverable especially when you're sitting very specific Targets in specific locations can we deliver that and can we do it in a way that probably avoids like unnecessary costs so for any click Source we see the information coming through in terms of the network planning that feeds into the system and then just in terms of like the system architecture that would be in place to deliver against those just to add um it's clear with all the targets that we're going to have a increasingly renewable and therefore variable generation on the system so in order to do that we have to consider in terms of Market design ensuring that the signals are there for those assets to operate when they are gener when they are able to generate and then there is the flexible Technologies there battery storage for example um that could respond when there are those sort of variability on the system so we're looking at ensuring I don't think any of the markets are going to be radically removed or new markets created but it's more a transformation of current markets that exist to ensure that they work for a very highly renewable and therefore variable generation so specifically then in terms of the network operators business plan how would say targets for onshore wind at 20 gigawatts and sorry 12 gigawatts and how would uh targets for solar impact on that I think if you take Blake offshore and not sure when that the transmission level what you've got is the system operator so we had like the holistic Network design like the first iteration of that was published last year and it told us here is the network infrastructure that we need to get to 50 gigawatts offshore Wind by 2030.
So that's the first step in that process and basically let your low regrets investment what then follows will be for the iterations of that so I think we're due hnd too from the existing electricity tester operator that will be published this summer and that will look at for example 25 gigawatts Scotland like floating offshore wind and Wells and look at what additional Network infrastructure requirements do we need like from that and then we've um tasked the system operator with producing something that we call as a centralized strategic Network plan that will be published in 2025 and that will look holistically onshore offshore targets across the filler GB instead of what what is the infrastructure that we need to deliver that including what like any aspirations and targets that the Scottish government said so that's at that level the kind of transmission level and Industry speak when you're looking at things like solar it might be that that does connect out of the transmission system but a lot of this is likely to come through in the distribution Network so we see that coming through the future Outlet distribution Future Energy scenarios which then in turns like the business planning process and for the distribution Network operators so SP energy networks and ssen and Scotland and then they factor that into their investment planning like over the regulatory periods okay okay thanks Mark yes you're coming back in later on uh but the next question is coming from Jackie Dunbar Jackie thank you good morning um what rule do you think off-gm currently play in developing and regulating hydrogen markets uh you know what work has been done to date yeah I can I can prepare so with regards to to hydrogen the we're still awaiting many of the business models from the UK government to deploy um both hydrogen production and hydrogen storage um in terms of off gems role it's ensuring that the markets and the market design will work for that we have a market for natural gas do we need to then transition to a way where we are able to buy and sell that hydrogen at present is going to be a mechanism by which we have a play yeah have facilities that can produce hydrogen and then we have end users for example industry that can that require that hydrogen to decarbonize their processes so so in terms of off gems role to dates that hasn't there hasn't been specific requirement for off-gym to to do so because it's it's it's a industry that has been stimulated through UK government um mechanisms but over time we see it that we we are going to have to be ready for whatever form that hydrogen Market takes would be it a quite sort of specific between buyers and sellers or or a more bigger traded Market in the same way that Natural Gas is done okay so um whose responsibility is it to develop the regulatory regime I can't see that one for hydrogen storage either um onshore or geologically you know and what what role would would you have in general it's our responsibility to make sure that we've get the right regulatory regime the right regulatory environment across all other like the technologies that we are responsible for some of them are established some of them are going to be new and emerging but we see that as our responsibility I think when you've got these new technologies emerging as Jack went set out we have to work quite closely with government just to understand what is the market Arrangements that are in place around that some of the commercial drivers that will determine whether these are going to be successful or not but then making sure that we can build that and like our regulation that's built into the system planning that ultimately allows us like where these do materialize in our respective of where they materialize can we make sure that we've got the infrastructure in place to support them okay okay thanks sorry can I just push on that a wee bit is that when we heard the evidence session uh last week uh the storage of hydrogen was going to become critical to ensure the uh Supply into the future I it's not adjusting time you know it's something we've got to store so are you going to have to develop future resources from your uh from off gem to make sure that that storage becomes available otherwise it's not going to be of a field that's going to be of huge use to us and absolutely and I think that generally applies across the board we have to put our resources where it's needed absolutely I think if you look at like for example the the CCC report that was published earlier this month that that gave us a good feel for like kind of put more flesh in the bones of what like the the system is the general the kind of mixer generation is going to look like in 2013 2035 I mean in terms of obviously the dominant Factor there is like wind onshore and offshore but hydrogen is a big part of that as well and I think what they've done is set out how they expect these to be complementary to each other I think particularly in Scotland like given the natural resources that we've got so we we definitely will make sure that we are resourced to have the right regulatory Arrangements in place for hydrogen over time it's something that is emerging okay thank you very much uh the next questions come from Colette Stevenson Colette thanks convener and good morning and um just on and touching upon um off Jim and uh the energy markets as well um I know that the UK Energy bill at the moment um uh has gone through the House of Lords but there's a provision in there that um we establish our future systems operator do you know what impact that would have with Wolfgang or do you believe that the establishment of an fso will have on the whole Energy System planning and on that um what skills experience and Authority will that fso have the existing agencies and systems operators uh denote at this moment in time Festival work is something that we are very involved with at the moment is something that we're incredibly supportive of I think alongside the UK government what you're likely to see we talk about our regulation adapting you see quite a big shift in the landscape in terms of the institution the governance arrangements from our point of view like the single biggest issue is if you've got an fso that is responsible for whole system planning and they're charged with basically taking that responsibility looking back at the like the GB Energy System as a whole and thinking right what's the where what's the right generation that we Max where are we going to see production over time and what impact does that have in terms of how we orchestrate the system so there's a lot of responsibility that will set with them and that in turn and then we have consulted recently like for example in what our future model of economic regulation of the network should look like and I think we've had a very successful model since privatization but that like everything else to adapt and evolve and I think the emergence of whole system planning gives us a big opportunity that can become like the Bedrock for Network planning so if you've got the fso as like a coordinating body across the network that says right here is what we need to build this is where we need it and by when that then gives us a lot more certainty in terms of the decisions that we need to take so you potentially our room might reduce slightly that's not guaranteed I think there's different models over time but certainly that's going to have a really prominent role I think going forward and what you've also got potentially is that the same happening at distribution level I mean we think about a lot of the decisions that we have to take around Net Zero a lot of them are going to be taking a regional and local level particularly around the electrification of heat and transport so can we do that same thing at a regional level that's further back and I thinking but we are Consulting that at the moment particularly around like the emergence of new Regional system planners so can they create like that kind of whole system plan particular Geographic level that reflects the needs I think the network needs of that and like the source of demand and the opportunities that are available so there's two two parts to that yeah yeah I think also just to add is that the the fact that they're bringing together the gas and electricity systems under one independent entity we'll give it that some Assurance in able to give proper strategic advice to regulators and and to the to the government okay no thanks and just on you know in terms of the electricity networks commissioner and interact will you know how will that interact and add value to the work you know of often and dfso and and basically vice versa as well and is there a potential risk as well that it's becoming crowded a bit fussy in terms of regulatory and in forward planning on the last point I think the idea is that we try and simplify the landscape as much as possible I know that's an objective for the UK government we've got the work that's on going at the moment I think through um yeah the work of this I can't remember the Chap's name at the moment Nick Windsor that's it Nick Windsor so that's ongoing at the moment is expected to report and the not too distant future I think that's likely to say quite a series of recommendations just around what what off gem should be doing over time how our model our regulation needs to adapt I think what he's able to do is look at what are some of the big strategic challenges that we face at the moment around Network congestion around like connection times like to get a connection into the grid um and these we look forward to I think we're working quite closely with the UK government and and that piece of work and we'll see what the implications are but generally speaking I think there is an opportunity to try and simplify the landscape as much as possible and that you've got like everybody's laser focused on get into Net Zero Energy System as quickly as we can and as efficiently as we can okay thank you I don't know if you want to come in Jack on that no okay okay thank you uh mark back to you yeah um obviously it's been a lot of focus on trying to decouple the gas price from the renewable electricity price so I wanted to ask you about the the Rima review the market access review what your what your thoughts are on that other other proposals workable other particular pros and cons of the current access Market arrangements and um what if you could explore that a bit that'd be good yeah so the review of electricity Market Arrangements is is very welcome and as I alluded to earlier is that the scale of the challenge of the scale of the fact that we're going to have a largely decarbonized power system so with a huge amounts of Renewables on the system means that we need to take a real good look at the market arrangements to make sure that they're fit for that fit for purpose for that sort of energy mix so I think it's it's important that you know off-chem it's a UK government-led um scheme and they're looking at sort of different elements which I think are the right areas so how do we deploy Maslow carbon in a way that does a lowest cost but doesn't impact the system from an operational perspective how do we ensure security is supplier when those assets are low carbon much of our security supplies at the moment delivered by fossil fuels delivering that flexibility that we need when there's those laws of renewable generation and then finally where we've been putting our our focus is are the arrangements appropriate in the wholesale Market the market where we buy and sell um wholesale electricity are they appropriate do they work in a in a larger decarbonized system and so from from off German's perspective we've seen real value in in really assessing whether there is a need for more locational signals within that wholesale market so indicating to people to parties that they are they can cite in the most optimal location for the system taking into account Network taking into account demand and then also being used on the system in the in the most efficient way so we've been undertaking quite a lot of analysis about that the cost Benefits case the the trade-offs that need to be really considered as part of that if you were to introduce what is a very significant change to the markets Arrangements so we've been working through that it's still ongoing and but we we intend to feed that into the the Rima process and also publish that more broadly um so it's focusing on the right areas we believe there is a case for making sure there's better more granular signals to ensure that parties are using that system as efficiently as possible it could deploy in the right places at the right times okay thanks Mark the next questions come from Liam thank you Kavita good morning panel uh first of all it's been suggested that off gem has an ambiguous relationship with Net Zero and there are proposals in a recent UK government white paper to amend your statutory duties to include a specific reference to Net Zero do you have a view Stephen I'll put this to you first what would expressly changing off gems statutory duty to include achieving Net Zero actually mean in relation to regulation design of markets and networks yeah and it's a good question I mean it's something that's often talked about I think I mean we obviously work under our statutory remit set by the UK government or that remit is to protect existing and future and future customers like we interpret that responsibility around future customers to include achieving The Net Zero targets that are set by government um the whether whether there's a zero objective on us I don't think it would make a practical difference to us I mean because ultimately we're already doing the things that we think we need to do to deliver Net Zero I think there is a chance like through I think there's the upcoming strategy and policy statement a consultation on that that may well give us an explicit Duty around Net Zero or other clarifications around the role but I think in practice I don't think it would change that much because we're already doing this sort of stuff that's implied by it I'll bring Fiona in later I think she's got perhaps some questions at the end I'm very grateful uh so secondly then the climate change committee have said that we massively need to ramp up transmission infrastructure now as I understand it off-chem sets uh price controls for Spen and ssen which regulate how much can be spent on investment and infrastructure and I noted in your submission that on at least one metric they asked for those two companies asked for 17 more for edt2 than they were actually given now given all of that how will you ensure how will off gem ensure that the next transmission and distribution Network price control periods so I post 26 post 28 will actually deliver the investment and redesign of the network that we need so we're currently consultant at the moment as you see that we we set the last of the real two generation of price controls so the new one for electricity distribution actually starts this Saturday and the first of April and we alluded to some of the fingers there I think that represents like the overall challenge against the submitted costs by the distribution Network operators or the individual SP energy networks or SSE for the Scottish license areas and that really is us like making sure that they are delivering efficiently and in the best interest of their customers I think if you take a step back I mean like the the real model of Regulation that we've had in place for 20 since 2013 that has really like evolved over time these are very agile and adaptive price control so yes it's right that you have like an X anti-set funding settlement for the companies that says right here is the amount of money that we are confident that we can sit up front and you can charge your customers and return here is the network like the level of service quality that has to go alongside that here is the challenge is that we are setting on your cost efficiency but what we've got increasingly now is in Period uncertainty mechanism I think there might have been some discussion in the session that you had last week and that allows us basically to adapt investment over time so to track the changes that you see in the economy because there might be new requirements so the transmission Network or the distribution Network and it's good for the companies because it gives them a route to fund and end period and it's good for customers because it avoids like any mistargeted or inefficient or unnecessary like investment up front so that adaptability I think gives us Comfort like for the here and now in terms of we can evolve over time I think to address like the Net Zero targets I mean if you look at the transmission side the Asti programs a great example in that last year an additional like 20 billion pounds of network investment on the transmission grids the to give us what we we think we need to deliver the 50 gigawatts offshore win by by 2030 and we're constantly I think evolving these price controls over time there's quite a big discount question at the moment in terms of Beyond 2026 and 2028 do we need to do things differently I think quite possibly yes I think they're like going back to the previous question about like the the system architecture what it looks like institutions and government governance they're evolving so our price controller regulation of the network should evolve as well over time but we don't have like a preset like Solution on that as subject to consultation but one thing we can see is it will be adaptable to allow us to meet the Net Zero targets very grateful thank you thanks very much Liam uh Monica you've got some questions thank you convener and good morning colleague Liam cares mentioned the CCC report already as have yourselves um but wanted to come back to that um report on delivering a reliable decarbonized power system and it does suggest that a step change is necessary in the delivery of transmission infrastructure to meet both UK and Scottish government targets forward renewable generation so I just wanted to explore with you in a bit more detail what you see is the is the the main practical constraints of gym face and darving this you've mentioned a few examples already but you know what are the main challenges and can you give us a bit more clarity about what needs to be put in place and support um this increase in deployment that that everyone wants to see I'm happy to start off I think the for us there's a number of big challenges that we face I think quite a lot of coverage obviously at the moment around Network congestion so the system balancing costs that we face in GB at the moment um and then the related problem in terms of like connection cues to get a connection into the grid we can influence that I think through our regulation uh we we have the ability to obviously accelerate accelerate the network expansion and alongside that we can look at what can be done to reform like the connections policy so these are things that are more within our gift working with the companies the network companies and working with government I think aside for that there's probably two big things that we need to see happening over time one is our own planning and consenting I think you've had some evidence on that and in the previous session like we need government to be getting like on with planning and consenting so that that's not holding us back from delivering the infrastructure and the other thing is around like the network companies really getting on top of their procurement and management of the supply chains and if they take like the right regulations in place I think the right Market arrangements as Jack was describing earlier that enabling environment in terms of planning and consent and companies that are managing like the supply chain issues then if all these things come together in concert then we can achieve the sort of like Ambitions that are set out in the CC or the challenges they'll say in the CCC report thank you you mentioned a couple of things you're still planning and consent and then you talked about the network companies themselves and procurement and being an issues so to try to understand these so-called blockers and how we can kind of Unblock these these systems what is the issue is it a lack of people is that a Personnel issue is it a skills issue um has off Jim done any work you're looking at um the skills mix um across the sector um to try to understand when people say these are the things that are slowing things down um are you looking for Less regulation or is there something in there about the the number of people and the skills that they have probably a mix of everything I mean when you think about it they sound very simple problems to overcome but even planning I mean from the outside you might think well a plan is all devolved in Scotland so it must be a matter for the Scottish government but there's some subtleties in terms of how that works in practice and the interaction whether the electricity act that it makes it more complicated than we know that the Scottish and UK government are working quickly I think to try and resolve that so that's something that's there I think we're planning when you need the amount of infrastructure that we need that has an impact on communities like across the country so we need to be able to bring them with us like we know that there's not probably an alternative to low carbon infrastructure we need more wires we need more cables that can have a disruptive impact so I think um it's probably incumbent upon all of us that are involved to work with the regional and local authorities to make sure that we're bringing them through and listening to their concerns and responding to them and that you get like truly complete Community benefits and Lasting benefits from it I think into that bit do you have a view on whether National plan has been worked forward will help with any of this or do you feel that planning needs to be a higher priority for government nationally I think generally speaking the mpf4 I think is seen as pretty world-leading like certainly in a European context and you've got to applaud I think the Scottish government for the work that they've done on that now whether it's enough I'm not sure it's regulator we're best place to probably advise on that but I think certainly from the panel last week that there's improvements of further improvements that can be made made around it okay on the on the the kind of procurement and supply chain issues the the challenge that we've got is that you've got a number of countries that are also moving at PACE whether that be in the states or in Mainland Europe um and that can sometimes be physical constraints on the market It's ability to respond you've got long-term procurement in countries like Germany and the Netherlands so I think for us it's like what can the networks do to make investment attractive as well is it long can our bundled procurement strategies that they can take forward to make sure that you're getting the supply chain involvement and also in people and skills I mean depending on which number you believe across I think GB overall you might need between 250 000 and 500 000 additional skilled workers in the industry so that's a huge potential so I think working with the government I think Scottish government as agencies in Scotland the universities the colleges there's a mobilization that needs to happen there to make sure that we've got the right people coming through with the skills that we need to deliver all this so Jack wants to add anything no I mean I can speak around the connections queue itself as well which is which is a which is a challenge you know we we build the network to connect the parties that are in the queue so we have a very because of the success of allowing people to connect prior to all the network being built and also just the sheer investment that is proposed for Net Zero we have a huge amount of assets that are planning to connect and get a grid connection um and so there is a question about okay we've got these parties in the queue which of these are going to realistically deliver because if you can actually identify those parties that are not progressing at the speed that you want them to do or they're not viable projects then they need to be removed from the queue that we call the the that as quickly as possible because they are blocking because we operate in the first conferred served as in you put in your connection application and get an offer you must be connected before the person that's next in the queue so if a party is not progressing then they are blocking others in the queue so we're looking at whether we can speed up the removal of those projects that are non-viable ensuring that the network companies and the system operator are really considering appropriate assumptions because if they assume everything before it's in the queue is built then you're going to be quoted a date which is uninvestable because you are having to assume that all these parties are connected so if we take more realistic assumptions we can bring those dates down assuming we can then remove them from the queue one but I think that you've mentioned the queue a couple of times here I just wonder how long is the queue I've read it for some projects they've been quoted a connection date of 2035 um does that sound a bit right it does sound about in certain areas it's not a nationwide um queue but there are there are areas where you are seeing the um parties quoted that date and and that is also the case for parties at a local level because if they trigger a reinforcement work so it's about removing those to bring those dates down so easy 2035 or are there any dates Beyond it um I think that's they're they're the sort of 2035 is the longest I've heard and there may be other cases but thank you um and good luck at getting a quote for 2035 I I suspect for connection to the grid um that may prove difficult the deputy convener wants to come in with some questions Fiona so I think we're getting to the knob of the issue to here and the concerns clearly when you have cues you have potential for delays for a number of reasons currently in terms of the investable proposition because clearly you've got to create the conditions for a market investment and all the risk for grid delays currently lie with the developer and the generators and is there anything you can do to rebalance that and you imply that you would want to investigate the viability of some of the proposals that as a shift from enabler to probably did I say Market interrogator is is that what you're suggesting will lead to Greater flexibility adaptability and investment with regards to those in the the queue and the queue management well what it is is that there are sort of a few things we can do and the the earlier and the the things we can do sooner is about introducing milestones for parties that are progressing their projects that if they do not hit those milestones then they will be removed from the queue so that that's that's what I mean by saying if they're not meeting those Milestones then that and we we're yet to approve this but if they don't hit those Milestones then they will be removed from the queue so it keeps those projects in the queue progressing towards delivery does that answer the question you were uh yes but in a market uh in a market condition basis that is quite a a kind of interesting I suppose State uh involvement in that um in that operation but it's it's it's it's a it's the regular it's not the regulator the regulator approves the the milestones and the idea is that for each Milestone you're getting closer to the amount you have to build the network to facilitate those assets onto the system so it's just making sure that when the network companies need to start investing in a new substation for example they are increasingly confident that those projects will will be there because if they don't have the confidence then build the network and then that project does not turn up then you you've spent money on network which isn't being utilized in terms of where we are there's concern has been raised with us that um off gem are not as a adaptable and as flexible as they need to be you have plans for the future you've said that but in terms of you're mobilizing that immense amount of investment that you yourself have said are needed and why why are you so slow just now is that um because you haven't in the past uh allowed investment and anticipation of need but Asti Etc you've said that you're you're improving that so you know what is that trajectory because um you this has got to accelerate a huge piece and how do people have confidence and how do investors have confidence that often will be fit for purpose for what we need for that renewable energy expansion I think on this yeah it's an important point because that's this idea that our regulation prevents investment ahead and either has done that's just not true there's nothing in our rules or regulations that prevent an investment I had the need in fact like under like for any network company under the license there's a requirement for them to be economic efficient and coordinated at how they deliver just discharge their responsibilities now when you're in installing assets that are 45 years in life it's entirely reasonable that you should expect like that obligation to include what is the demand that's likely to be materialized over time and how they're identize like my intervention in response to that so that that is for the companies to make the case there's nothing in our regulation that has prevented it I think what you might probably get if you were to push a company said well it's behavioral like Off Gym is the regulator like in the last 10 to 15 years has been so preoccupied with cost efficiency and in some ways we have and we mean we don't probably apologize for that because ultimately all of these costs go through any consumer bills and we want to make sure they are efficient but we certainly don't stand in the way of good investment cases we're investing ahead of need now what you've seen over the last few years like the Asti reference is a good one like that is investment ahead and eat even before that like the green recovery program that we announced in 2021 300 million across GB I think it was about 50 million in Scotland again anticipatory investment at the distribution level we support more EVS heat pumps more local like low carbon Generations so I think we have shown that it can be done and what you have like unequivocally now is a mindset from the legit Regulators we have no option but to invest ahead of needs and we're encouraging the networks to do that but do it efficiently and in terms then of your I suppose existing responsibilities particularly for customers and that is where the location is in terms of the demand what we have seen however from a generating point of view and the transmission point of view you've seen charging costs particularly transmission costs increasing rapidly in Scotland now that provides uncertainty and we know business doesn't like uncertainty if they want to then invest at the immense amounts of investment you've referred to so is it is there something that needs to be done there to make sure that there are clear positive signals for investment and has that dichotomy which you know has has existed to date going to change in the future I'll come to Jack Jack's probably more than the expert on charging reforms but generally speaking as a matter of principle yes we have to look across the full range of our regulation so the network regulation charging arrangements and things like the things that have held through in the past did they still hold true for the future because it's a very different Energy System that we're likely to have I think traditionally when you have like more rural projects obviously there's two big costs that involved in that there's the actual cost of the investment itself and then is the cost of connecting it into the grid and the further that you have are away from demand the higher the cost is in terms of the network that you will have to transport that electricity and there's a trade-off there because I think when we've had the debate in the past the bit charging Arrangements if you want to generate us to pay less then consumers have to pay more so it's it's a zero-sum game so there is a trade-off that has to be assessed but it is on the review I don't know exactly if you want to pick up on the data yeah yeah so absolutely the trend we have to recover the cost so that's what the transmission charges are doing they recover the cost of the of the transmission Network um I think it's just to say that we are looking at it from from two angles from regards to the transmission charging is in the interim are we sure that the assumptions are being used are based on the system today rather than when the transmission charging regime was set up um so we are going through what's What's called the tenuous task force to ensure that um those assumptions that we're using to calculate those charges are are accurate and provide cost-reflective signals but also give a a level of stability for parties to to be able to to invest secondly as we've spoken about the review of a electricity Market Arrangements what was the purpose of transmission charging when you have a changed electricity market and so it's a separate bits of work they are coordinated but does do you want transmission charging to be sending a signal when you have a different Market Arrangements it's something that we're thinking about further and thinking about it bearing in mind Scotland has the most expensive transmission costs in in Europe as far as we're aware and in terms of your other responsibility for pricing for customers we also have some of the most severe fuel poverty from a customer point of view so there's clearly a mismatch there and the reason that we can generate so much renewable energy is precisely because of the rural nature of our geography and also um our offshore and our Coastal lines that accesses the wind so there's definitely a mismatch here and I think it's the speed of decisions so when will these pieces of work you're talking about uh when will they emerge in terms of changing that policy and then obviously giving more certainty for investment and then I've got one final question if that's okay yeah so we're restarting over the winter we we had to re-prioritize our work the the transmission task force is restarting uh next month to it it already started so it's not a new project it's the restarting of that and then working at PACE we've resourced that appropriately to ensure that we can get changes in place to improve the current framework with those incremental improvements around cost effectivity and stability over 2024 and 2025 in terms of the longer term design of those that is linked to the review of a electricity Market Arrangements which is a 2030.
So that's why we do because of the importance of those charges that's why there are two coordinated but separate pieces of work to ensure that there are the near-term signals that parties can still keep investing but also that in the longer term that they are they play an appropriate role so that we're not you know giving conflicting signals when we have a changed potential change in reformed electricity market so it's just a just to clarify is that we are doing those two pieces of work they are coordinated but we need two because of the near-term importance of that charging and also the importance of coherence in the long term gem plan to ensure that the electricity distribution network is ready for the anticipated increases in demand particularly for heat and also transport and electrification and how are you planning for the potential reduction in demand for the Gas Distribution Network yeah just just um for me just the previous issue around the Junior's charges I mean it's right it's a fact that Scottish consumers pay the lowest transmission charges in anywhere and GB I think when you're looking at the generator say that's when the picture looks different but in terms of the the distribution Network so we've just settled the new regulatory price control for electricity distribution as I said before it starts on Saturday um at the start like the big strategic objective of that is how do we make sure the distribution networks are ready to deliver net zero this is where much of the anticipatory Investments come in for EV charging and heat pumps so there's a couple of things that we've done there one is basically doubling the annual investment that's made in network upgrades in the distribution sector so that's a really sizable increase across all of the dnos including the two Scottish licensees but also going back to the point that was made before we have very agile funding mechanisms in place so that if demand materializes faster than expect then the investment can track that most of this stuff and most of the big challenges that you might have at like lower voltage levels we have automatic uncertainty mechanisms in place so there isn't an administrative rule for off gem up front it basically we have a unit cost and then if they have to do more work then the funding can can match that so like these these mechanisms make sure that the networks are going to be prepared to deliver Net Zero on the gas question I think that's that's one of the big questions that we've got what is the role of the gas networks going forward I don't think we've got all the answers to that I think that in terms of we're still await like some of the government um um policies on like the future of heat and so at the moment we have an asset there that has to be managed that there's big safety issues we have to operate renew replace the the the the infrastructure like the existing gas price controls run until 2026 as we said before we're currently Consulting on the regulatory Arrangements beyond that that will take a longer term view on what the requirements might be of that gas and Network thank you Mo you wanted to come back with a brief question just on that that to new OS review uh I mean is it is it accepted that the locational signals need to change because as far as I see it the locational signaling at the moment is to build as much generation close to the theoretical center of the GB energy Market as possible which I think is Warwick now last time I looked I don't think building you know renewable energy close to Warwick will have us you know as bigger efficiency and load Factor as building Renewables in Scotland you know you get more energy out of wind farms in Scotland than you would it in you know in the Midlands of England so what is that kind of recognized that locational signals need to change now through to know so we need to be accessing and you know developing the resource where that resource is rather than so it's we're looking at this too and like you said the central point is is one of those assumptions the underpinning assumptions that we want to make sure is accurate in terms of calculating those transmission charges so we are we want to ensure that the the charges are as cost reflective for today's system rather than a presumed you know historic Center we need to balance that needs to have a really cost reflective signal really accurate with the ability for parties to know what the signal is to the stability of that signal so there is this which is why we're convening industry experts to sort of try and find that balance between the stability and the cost reflectivity again it's the role of the the charges is to recover the cost of the transmission Network so it it's a zero sum game in we have to recover those costs so in terms of should it change I think we're reviewing how it's more incremental improvements we're looking at in terms of the nearer term the 24 20 25 changes in the long term there is a there is a question about whether whether those signals need to be completely different or in fact no signal sense at all to the transmission charging but the Crux of it is that we still need to recover the cost of the network through those signals does that answer the yeah okay uh Liam you want to come into you thanks Covina yes very briefly to come back on some of the questions earlier which I thought were interesting uh on the time scales and processes and it's simply this I was recently out at a a a a big company who have some really exciting plans on building Renewables and building infrastructure but they are restricted or inhibited in doing so because what they told me was they need to apply for the grid connection very many years in advance a great connection that they'll start paying for in advance of actually putting electricity into the grid uh however only once they've gone through that then they need to get planning then they'll need to get the kit then they'll need to get the skills to fit in I and so when they stacked all of that up the question becomes if if we accept that that process that time scale that upfront investment is potentially going to restrict Innovation and development or at least limit it to very very large companies who can go through all of that do you take a view on what precisely needs to change in Scotland and which agency or body in Scotland needs to lead that change to encourage the step change in Renewables investment that we all want to see we'll think it probably I don't think the responsibility sets with any individual party I think you need the whole system government regulator industry all working in concert to achieve that I think we've got all our different bits of the system that we are responsible for and clearly all of these things need to be properly lined up I think on the when you look at the connection challenges that we've got at the moment a big change was in 2010 where we moved from like prior to 2010 basically if you wanted to connect with Renewables the grid capacity had to exist at that point in 2010 that changed and it was more connect and managed so the focus was get the connection made in the short attempt and then we'll deal we'll let the network implications like over time and that model had a lot of success because you had significant growth and renewable generation I think the challenge now is just the scale of that that's coming through and effectively the network investment is playing catch-up so we know this goes back to the kind of fundamental point and of we need Strategic investment it's more like strategic expansion of the grid so that when it's a wind farm or whatever developer whatever geoformer generation was to connect then then they have something there and it's that's available and that probably goes alongside like some of the reforms that Jack's talking about I don't know whether you want to pick up in any detail on in connections and connections yeah yeah I mean I think it's we still need to do all those steps the planning the grid connection procuring the equipment it's just a question about whether it could be more streamlined and with regards to grid connection I've spoke about them recently but it there is a case that like I said if this party is looking to connect today they are behind all those other parties that have already applied to connecting the queue and so again it comes to that point is are those parties in advance of the queue going to deliver if not how do we remove them as quickly as possible and there is a question about could we if parties are ready when even though they're behind them in the queue can we in some way expedite their delivery about to without detrimenting others in the queue so I think we just need to think a bit more um add in a more agile way about how do we manage those connections at the moment it's first conferred server we just go through it in an audibly way whereas could we think more or could the networks and the system operator manage that with support from us in a more agile way to deliver quicker those assets and those parties that are ready today thank you thanks Liam um and I'm going to ask a question at the end uh having uh been quiet during this meeting is is that having watched The bewley Denny power line go up and the length of time it took to to build that having watched the substation being built uh bewley getting bigger and bigger and a substation being built a black hillock getting bigger and bigger and the problems and consternation it causes with local people who live near it or see it the correct signal would be that actually what we want to be doing is transmitting this as hydrogen in pipe networks under the country which seem to take less infrastructure and are less a scar on the landscape and do you think that's a signal that that everyone should be putting out or is that too simplistic Stephen thank you this is a good question I think clearly like when you look at like the electricity infrastructure it's not viable economically viable to have that all running underground because the cost of it would be prohibitive um I also think that when you're looking at it could you do we have the confidence at the moment that you could rely purely on hydrogen probably not but it certainly does have a role to play I think it's about looking at these things in totality so what does the system need like for like reliable and proven operability and delivered in that Net Zero system and but there will be I think there could be opportunities I think especially in terms of the future of the gas networks how would you potentially convert that into hydrogen over time a lot of innovation work has gone on around that at the moment where we explore it can it be done can it be safe can it be viable um so that's something I think we keep an open mind around Jack I think just just quickly to um we have a assistant that's electrified it will increasingly become electrified and so like like Steve said that there is a role for hydrogen especially in those hard to decarbonize sectors potentially in in other other roles such as managing the power system um but I think we just need to remember that with regards to electricity if you convert it to hydrogen there is a there is a an efficiency drop so every time you convert electricity to hydrogen back to electricity then you lose through losses some of that um useful power so we should be using that when we need it but we need to balance that efficiency and those losses against actually if we just need the electricity we want to get the electricity from one point to the other and and of course you're right Jack and the there is also transmission losses as you generate and move electricity around the countryside on power lines and I understand the difficulties of putting a 400 KV graph power line underground we discussed it on the Billy to Danny line it is possible things are moving forward just because what you've got is what you've got doesn't mean it's right for the future and on that note perhaps we should end that and I'm going to suspend the meeting now for five minutes to allow a changeover of witnesses thank you very much for attending okay and welcome back to our uh to the committee meeting our next item of business is an Evidence session with circularity Scotland as part of our consideration of the deposit return scheme and I refer members to the papers for this item circularity Scotland will have a crucial role as the scheme administrator and today's session is about hearing more about that role and overall preparedness for the screams launch and I'm pleased to welcome David Harris the chief executive Irene Steele the chief finance officer Simon Jones the Chief Operating Officer and Donald mccalman the program director circularity Scotland thank you for accepting our invitation I'd also like to welcome Fergus Ewing Morris golden and Brian Whittle in attendance for today's session I'll offer you a brief opportunity to ask your questions near the end of the panel so the Committees can answer question first I believe David Harris you'd like to make a opening statement thank you convener and thank you very much to you and the other members of the committee for this opportunity to speak to you this morning we recognize the Parliamentary business and public interest in the deposit return scheme and in us as the scheme administrators and we welcome the opportunity to appear before you today before I was sitting before you today collectively we have over 100 years experience in recycling packaging the drinks industry fast-moving consumer goods Logistics and the retail sector I'm joined by Irene Steele our Chief Financial Officer Irene has managed Financial operations for Marks and Spencer Heineken the Edrington group and was most recently financed director of Genius Foods Simon Jones to my far left our chief operating officer has 25 years experience in retail and Logistics and has worked across the UK with Tesco and DHL so I ride to our program director Donald mcelman has managed major transformation projects across utilities Financial Services entertainment and the public sector as chief executive I bring extensive experience from leadership roles in the Plastics in the recycling industry the deposit return regulations 2020 Place new legal obligations on producers and retailers to ensure that the scheme objectives are met a type of legislation in the category of producer responsibility which means producers have to take more operational and financial responsibility for the containers in which their drinks are sold in simple terms each producer must collect and process 90 of their containers to ensure that the fee that fees and deposits are paid to retails in practice individual producers cannot operate independently to achieve this so circularity Scotland has been established solely to deliver those responsibilities collectively on behalf of all producers who appoint us as their service provider I'm sure we'll cover the detail of how we were set up and are managed and operated during today's proceedings we would like to say at the outset that we're proud to be involved in administering the deposit return scheme we'll make Scotland a cleaner Greener place to live by ensuring the materials are recycled to the highest standards and by reducing litter at the outset of this session I would also like to personally offer my assurances that I understand all of you as elected members will have engaged extensively with businesses and producers in your constituencies some of whom may have concerns about the operation of the scheme the team at circularity Scotland is working incredibly hard to implement solutions to Common concerns from businesses and to work through the scheme implementation on a one-to-one business basis with individual businesses as appropriate we have a team who are resourced ready and willing to help so if you have businesses in your constituency who are concerned please put them in touch with us to provide some information about circularity Scotland's Constitution we are an independent not-for-profit membership-based organization our members include drinks producers retailers and trade associations and together they account for more than 90 percent of the scheme articles sold and returned in Scotland we are governed through a membership agreement that all members sign which sets out our guiding principles our members vote on the appointments of our directors who are all individuals of substantial industry experience we were tasked with building the infrastructure for the deposit return scheme which were the largest Waste Management operation in the UK we were charged with doing this within 15 months and to do so without any startup resource from that point we have secured 100 million pounds of investment and a team of almost 50 and together with our contract to biffer we'll be creating 600 jobs although the deposit return scheme is new to Scotland this is not new in other parts of the world we have sought to learn from the growing amounts of international experience the deposit return scheme represents a major shift in Scotland's approach to recycling and it will have an impact on every part of the country we know you have legitimate questions about the implementation scheme and we look forward to answering those questions to the best of our ability we understand that there is some confusion about the role of various organizations in the development execution and regulation of Scotland's deposit return scheme and we welcome the opportunity to attend this committee and help clarify the objectives of circularity Scotland thank you thank you very much David I just remind members what we're trying to do here is get to the hub of or the nub of the problem to identify the issues I notice and I just say as convener quite a lot of interesting responses in the chamber which are are best for the chamber this is actually to try and delve down into the nitty-gritty of the problem and I do hope members will support me in in achieving that so I'm going to start off with the first question if I may um membership of uh secularity Scotland it's pretty high bar 10 million containers 20 million containers on return trade associations with more than 10 million I mean what slightly concerns me is how the smaller person the smaller producer or retailer feels that they're actually represented in circularity Scotland and their views are heard seems to be a a big scheme with big players and and ignoring the little players David do you want to answer that if you can be there um I'm going to ask Donald who was involved in setting the company up to provide a little more detail on this but first part of the answer to that question is that our membership involves trade associations trade associations three of which represent convenience stores so the the smaller the SME end of retail but also if we look across the trade associations on the producer side we have wine and spirits trade Association we have the Society of independent Brewers much more geared towards small companies and also people like the British beer and Pub Association and the British soft drinks Association as nominee are representing many small sme-sized businesses I think it would be helpful if Donald gave some more clarity around how the business was brought into being and how these rules were set please certainly um if we actually go back before the company was established a deposit return scheme has always been set up as an industry-led initiative um and before the legislation was actually laid four organizations for producers and three trade associations got together to start thinking out how will industry respond to the new obligations that's coming their way so three of those organizations were trade associations representing a broad range of organizations size-wise and it was that group which came up with the general model of the membership criteria to try and reflect the fact that yes large organizations probably have more say but absolutely have more of a role and a commitment to make with regards to the overall recycling targets but also to ensure that the smaller organizations had a vehicle to ensure their views were expressed as well and that model was essentially codified into what you summarized convener so that um of our 32 members I think something like six or seven or trade associations those trade associations represent some of the smallest Brewers and retailers in the country but through the very competent and vociferous presence that their trade Association has on the membership of the company absolutely have their views hurt to the same extent as others around the table okay um I hear what you say I'm not sure if I was uh a convenience store in in a local Village that I would feel that that I was getting the representation that I needed and and I'll come back to that if I may at the end so I'm going to go to the first set of questions which come from uh Jackie Dunbar Jackie good morning panel and what I plan to do is I've got a number of questions so I'll leave it in your hands who's best in to to up to answer them if you don't mind and my first question is regarding the the challenge that's been flagged up with the the Gateway reviews in regards to conditioning the DRS came from something that is government owned and to be an industry-led can you maybe explain to me how the transition is working and are you confident that the different rules in the scheme um including those ones of yourselves CPA zeroes Scotland and government are clear um and do businesses know where to go to to get the support that they're needed number um there is we clearly have clarity about where our responsibility Lies We Are Industries vehicle for meeting Industries responsibilities under these regulations it's the job of government to set the regulations it's the job of cepa to enforce and regulate so that they are our regulator and we whether it be as a member or as someone who registers for us to be their producer that their scheme administrator's a producer or someone who registers where the stop rates a return point we answer to them they are our customer they're our master in this regard what we have found is that overall and I mean across Society there is a lack of a clear understanding of how these roles are defined we seek at length to communicate this we have communicated extensively also have websites we we write to affected businesses we seek to find affected businesses we have online marketing and marketing campaigns to communicate with businesses so they understand where we fit into this we've also we've been on the road we've held conferences and Road shows and spoken face to face with 1500 businesses affected to try and get the message out and help to clarify we found it being quite open frustrating at the level of media coverage which is not dealing with the facts of the work that we are trying to achieve exactly what our role is in this that we are not a norm of government we are here because industry has accepted its responsibilities we are working hard we keep expanding our Communications capability to do everything that we can to enable people to understand this and it's why we do not say it lightly when we ask that you have constituents who are concerned we have a team sitting in Glasgow waiting to talk to them we want to take business by the hand and support them through this process Donald if you if I could add one more Point uh convener um those of you read some of the earlier Gateway review reports we'll have seen recommendations about establishing a Joint Communications Group made up of Scottish government zeroist Scotland uh seat by the regulator and ourselves and I think it's fair to say in the early days there was an element of miscoordination those organizations to a greater lesser degree wanted to have uh conversations with businesses around the specific roles they play because they do have very clear separate defined roles um and and we took the the view that said we have to coordinate that because to your example convener a small convenience store wants to have a relatively simple straightforward consistent series of messages as we go through the process of working out what it's about and getting live so we've stepped into that and are coordinating and organizing and ensuring that there is a consistency of message timing media to try and bring some Simplicity to to that but those individual organizations do have very separate responsibilities and for example as the regulator are very clearly sitting there to ensure all parties um adhere to the the new obligations that they have we work closely with them but they also regulate us so we have to keep somebody of separation okay I mean I've been contacted myself as you said in by the small convenience stores and and one of the questions that they raised with me which I actually got because I'm a former grocery stock controller myself so um was their their policy you know their point of sale labels and they were saying that they've stalled to they're still trying to figure to find out how they have got to have those labels um you know the Shelf labels you with the DRS on them you know they were they said did I know if something cost a pound do they have to have one pound plus 20p DRS or is it do they have to have one pound twenty this isn't includes the DRS they're still trying to get confirmation from this now I know that outside world will think that's a simple thing but when you have got systems and programs and everything behind behind the scenes they they kind of need this information now so that they can be ready for the 16th of August can you give some clarity today um yes there's a couple ways of responding to that um there are something like I don't know 35 different sections within regulations so the impact different people at different times we pick up two of those they are important ones and they sit in the middle but we have responsibilities to ensure we deliver the producer obligations to collect 90 and there are absolutely new obligations that are landing with retailers to ensure that consumers understand when they're in a shop that it's not a 20 pence increase in price it's a 20 pence deposit which they get back those are obligations which the government has laid down on those organizations we don't have a role we don't have any control or influence over the retail side of things and those organizations are getting a lot of help from their trade associations cipa have also provided some support they have a very comprehensive website but we don't have the ability to influence and control what both shop operations do because that's a new obligation which the government has said retail you have to comply with this so between the regulator between the trade associations those are probably the best sources of advice support because those organizations understand how a retail environment works we're not able to give that advice then who can I see that they need to go to to to get that to to get that advice so that they can start getting their systems in place we're working with a number of different trade associations across the convenience sector they are very expert in understanding how the regulations affect this retail side of things I would think they would be a an excellent source of advice ultimately super are the regulator they have a role to ensure their regulations are made available and understood to everybody they have an excellent website which would be also a good source of of advice it sure has I'm slightly scratching my head on this in the sense that what is the advice what what are they supposed to do apart from consult with somebody else the issue we have is that Donald correctly if I'm wrong but trading standards and sipa have not agreed on what the correct approach is oh sorry but hold on you're running the scheme so you you so somebody Rings your office as they've just been advised to do sorry I don't mean to jump on your question but somebody Rings your office as they've been advised to do to get the information that that they need to run the scheme and the answer is well bring up super or or um whoever else it was you suggested they do that that's not advice that's passing the butt I'm sorry I'm confused help me please well we are not able to make that decision about what the correct approach is because it sits between trading standards and super as the regulator to agree on what the correct approach is for shelf Edge labeling and also the pricing labeling on multipacks so if we were to make a decision on this we don't have the authority or the power to make that decision I'm totally confused then how the scheme works if we don't know what we're doing at the outset if I mean yeah convener you said we're running the scheme it's it's a short statement but to be pedantically clear we are not running the entire deposit return scheme we have a responsibility to deliver a large part of it on behalf of the producers who sit with the legal liability the legislation passed by Scottish government Place additional obligations on the retail sector for example to act as a return point that's not within our scope that's not what we were set up to deliver if I'm going to come back to you Jackie but if I just asked a question I went into a shop the other day which will remain nameless to buy 24 bottles small bottles of water at three pounds each of those are going to be labeled and it's going to come up an additional it's 20p for each bottle isn't it so my maths would suggest that the deposit is going to be more than the water and and we don't know how that's going to be shown up uh to the consumer who's being told it's not an increase in price um sorry I'm totally confused and then I'm coming back to Jackie a big one make a comment yes absolutely for the vast majority of retailers It's relatively straightforward the regulations are quite clear at the point of sale make it clear to the consumer that there's a 20 pence deposit so there's obvious that they're going to get that back and that will be returned to them once they looked on the empty container this is exactly how more than 50 other deposit return schemes around the world work hundreds of millions of consumers live and operate in in that environment it is absolutely a change to everybody in in Scotland there's no doubt about that we've had a couple of um different models of deposit returns but very narrow very operated but this is a national-wide scheme and it's it it sounds complicated it's pretty straightforward there are some technical issues absolutely to be resolved with regards to some of the the the the way that shelf Edge labels I know some stores use digital mechanisms the point about where the deposit sits with regards to the price on for example a price Mark pack is a matter which has been discussed between super Scottish government and trading standards and is close to resolution [ __ ] if you want to I'm confused um because what you've just said would suggest to me know how what to put on the label but they're telling me that they don't know what to put on the label just now do they have to have it separate or can they put it together and to me that's just a simple question and I agree that the exact point you've raised has been a simple question which has been asked of sipa the Scottish government trading standards organizations for some time and it has been owned to for resolution by Scottish government they are close to doing that I don't think there's any doubt whatsoever that is not an ideal position government officials have been working very closely on it for some time they are close to resolving that I'm going to push you to go to the next question having identified a floor in the city yeah I was just going to go with the next question thank you convener um it's another question that's been raised with me is the the collections of containers from the small retail sites um there is so and I mean the manual uplifts not the not the vending machine ones um do you know or is it in your gift to know and how often that that is going to happen and now I do realize that that depends on how many gets put back but what's the criteria for for the uplifts if it's going to be a day or a week Etc because it all has an impact on the space that the local stores is gonna have thank you Miss Dunbar I'm going to ask Simon who's in charge of the logistics operation to answer that question for you and so we recognize that collections are important and we want to create a meaningful schedule that matches people's requirements and is efficient and as cost effective as possible so at the moment we're asking people to register so we understand what those schedules look like and we understand where we need to go to collect particularly for small stores we under we recognize that there is a big issue in terms of space um we are trying to ensure those guys have the ability when they register with us to put down their estimated number of returns and which will calculate a frequency of collection now if they don't agree with what that frequency suggests for them they absolutely have the opportunity to put some free text in to say why that's an issue and invariably it's going to be space to which point our customer services will get in touch with those guys and before we'll get in touch to create the schedule that suits the needs of those businesses so we're absolutely trying to work with the small guys as well as the big guys to ensure that we create a collection schedule that suits their needs and if there are further issues particularly for small guys though obviously they have the opportunity if they're that small to apply for an exemption if they're in a rural location that's obviously not ideal for them so we want them to get in touch we'll go and visit them and we'll try and understand how we can help them to meet the needs of their shop and then these are the collections in regards to the exemption am I right in thinking that there's a distance um that they can only get an exemption if they're so far away from a bigger retail [Music] um store which we'd have an impact on some it's 400 meters there are um there's exemptions also for health and safety fire safety and food safety so depending on the size of your store if you're 100 meters squared or less you can apply for an exemption on size if you're 280 meters squared or less you can apply for under say food to go or fire safety or health and safety and I'm going to be an app for your mobile phones um and so I was just going to ask for the manual take back for the containers just going to ask do you know when that's going to be up and running and for for the small retailers to be able to get a grasp of now two final stages of development and testing and should be available end of May beginning of June for test uh and rolled out for people to be able to see what it does convenient is how do you do you assess how well you're doing and being prepared for the for the August launch date and you know what's your level of confidence that you're going to be able and to to go to go live and do you think there's any Milestones that you still need to to reach in order for this to happen there's a great deal to do we we did not set the timetable we were given the timetable and from from the point when that was set we had to find the money to run the operation we had to establish the partners put the contracts in place to build the infrastructure from that point on we have been working around the clock to deliver for the 16th of August we continue to do so we have a path to being ready there are many Milestones as you would imagine in terms of delivering I.T systems delivering the the various elements of that Logistics infrastructure but it's happening there are counting centers being set up machines being installed vehicles are on the way it's actually happening in the physical world we one of the processes that we're constantly looking at is is refining what is actually available on day one the scheme will build up over time but in terms of how we manage and measure that as you would expect we've got a very significant project management team in place Donald would you like to talk more about how we actually manage the process certainly yes it's a multi-work stream program I should expect it operations Communications commercial uh all the sort of things you'd expect we have a great team of project managers program managers we have all the traditional tools you'd expect to see in terms of risk management contingency management our partners who are obviously heavily responsible for large parts of delivery have equally competent strong teams we have Assurance over theirs in terms of them in terms of regular Steering group meetings we have an integrated plan there's nothing you wouldn't expect to see in terms of a large complex delivery there are risks ahead of us we have plans in place to address those as David said we're confident we're going to be on the 16th of August ready to go well there's a there's a whole lot of supplementaries which you've obviously let excuse the expression the cat out of the bag but I'm going to come to the deputy convener for a question then I'm going to go to Liam Kerr for a question yeah I just want to take you back to that very first question circularity Scotland the name implies it's circular it's end to end but in your answers you've said that you are responsible only for the producers and then you've offloaded responsibility for retail responsibility to Super the trade associations and the Scottish government are you implying that there should have been a similar uh organization set up for the retailers similar to what you currently do for the producers thank you Deputy convener um no I think it's important to clarify on that point when we're talking about responsibility resting with super for example trading standards we're talking about a specific point in terms of the rules around labeling which is very much outside our scope our responsibility and if you look at the way we're we are run 50 50.
So half of our organization is the return Point side which is retail and Hospitality half of our organization the way they vote on any membership matters 50 comes from producers so that as part of discharging those responsibility for a producer it is our responsibility to provide that service to the retailer the retailer has an obligation to operate a return point it's the producer's responsibility to service that return point and obviously to manage the interface with that retailer it the regulations Place responsibilities on a retailer just as they do for a producer if there are issues within that Retailer's business which they have obviously responsibility for for meeting the obligations operating return point we cannot make the decisions for them but we are Keen to support we have a customer service team we're keen whether it's the largest retailer or the smallest convenience store to be in a dialogue with them and whether it be an issue with exemptions or with the service side and the collection side the team are there to talk and support them so there's that integration between us thank you convener okay uh Liam you had a question thank you convenient morning panel just very briefly arising from Jackie dunbar's question there about your preparedness for 16th of August what contingency planning are you doing uh for the scheme if it isn't ready to go live on the 16th of August um we do not have this this timetable never gave us a great deal of time contingency and at the time when we were appointed a scheme administrator at that point that the deadline for this game was July 2022.
within the application to be scheme administrator we made it clear we cannot deliver that following that we made representations to government around how we saw the scheme going live and we identified that the period of September to October 2023 was deliverable but it contained a degree of risk and it did not allow for a great deal of contingency that's the timetable that we are now working to that risk has not gone away and the contingency has not grown in terms of what planning we are doing for contingency right through the program we are looking at what alternatives can we put in it is worth stressing particularly looking at the operating side of this business we are building an infrastructure to cope with returns at 90 percent that will not be the case on day one there'll be fairly extensive period where the scheme wraps up so that with the level of contingency that's built into the scale of that infrastructure in addition to the lower lower volumes at startup that to a degree does give us some cover but also the one thing we can't buy extra days but what you will see within the organization is We are continuing continually applying more resource so when we look at the I.T side of this business we keep pulling yeah we keep building up the resource so that we have effectively additional teams covering elements but for us we have a movable object in terms of the date we need to hit Donald and if I made one other official point there turning around slightly Mr care when you have such an immovable deadline and other program technique is to start looking at your scope so unashamedly there are things that we perhaps set out to say we're going to have these in place for go live we've had a long hard look at what we do and don't need and there are some things we said guess what we don't really need this for go live so to take the pressure off you know a tight timeline we've moved some things out you know for example some some of the reports that we might like to have for day one let's bring them in shortly after go live because there are more important critical things that we need to make sure we deliver right across the scheme thanks Liam Mark some questions from you and then I'm going to go back to Jackie yeah thanks convener um should I take all my questions yeah okay um maybe we could just sort of wind back a bit I mean there has been a lot of concern coming from certain businesses I think you've addressed some of those but what do you see is the outstanding concerns that that still exist obviously one out this this is a massive and complex project it touches thousands of businesses and therefore there are legitimate concerns and at no point do we do we just dispute that those concerns exist um a lot of what we're seeing at the moment in terms of area of concern is coming from smaller producers um we have 670 producers have appointed to speed our skin administrator 630 of those are small businesses they are preparing they've decided to use so Clarity Scotland services to meet their obligations under the scheme that does not mean that we are not listening to the other small producers that are out there and all small businesses um I am committed personally that this this project that we are working on will not damage businesses and therefore we will we will continue to do everything we can to support them what I'd like to do is ask Irene to talk more about what we're actually doing in practice to support those small businesses struggle with as a committee is to understand what are the what are the real issues that have yet to be addressed compared to perhaps you know issues around communication for example which you raised earlier on or issues that have perhaps already been addressed but have not been communicated so I'm really interested to know what what are the issues that you're still working on so yes absolutely so in terms of um in our in our working with um producers and retailers of all sizes and one of the things we're doing at the moment is uh is running solution uh working groups for the end invoicing process so um you know it's it's something that we're very uh supportive of and we are collaborating with the large and small retailers wholesalers and producers of large and small size two to make sure that across that supply chain there is a commonality and an understanding of how the invoicing the the when items are placed on Market when they go into a Depot where when vat is applied when that is not applied and you know I would say um that this is an example of how it's not exactly within our remit to to do this but it's absolutely of everybody's interest and we're very happy to facilitate that so I would say that Clarity across the supply chain of the different stages of invoicing is one area that's that's we've identified along with many of our members and we're working through that with them at the moment so that's one area yeah the other areas well in the first instance is particularly our irons leading workshops with those concerned businesses to make sure that we fully understand their issues um one of the big issues Rose particularly by small businesses with cash flow impacts the scheme going live we put measures in place designed to address that which we believe do but there are still concerns coming from invoicing is one of them there's a general level of Readiness many small businesses don't have a great deal of resource to necessarily be ready for the 16th obviously that's an area which has had a lot of discussion politically recently and we are we are Keen to do anything we and we're still looking at measures that can address some of those concerns but also I think the the compliance approach that cprof put in place which effectively looks if a small business is not ready what are they doing and is their position reasonable if I look more broadly at the scheme this is a cost to producers and therefore there are concerns about what it will cost them and knowledge and visibility and understanding of that cost and in many ways to an extent it could come back to the governance point that you raised earlier and we were set up as an our constitution sets out a number of things one is that all all businesses are treated the same being a member doesn't give you a privilege you get everybody gets the same deal everybody gets the benefit of the level of investment that's being made behind circularity Scotland and therefore when we look at the cost of the scheme ultimately it is a feature of the regulations that have been passed that the cost of running this goes back to the to the producer but our remit and our commitment is to be cost effective in doing so and that's why we have to sit in the point of conflict between the retailers who want a higher fee the fee which is the greatest cost to producers and we have to manage that conflict which puts us in a in a pressure point situation because we're trying to find a compromise and a lot of the talk with producers around the registration Point obviously is being about understanding what liability they're signing up for their liability is for one two and a half to three billionth of the cost of running the scheme for every container they put on the market that is the extent of it but obviously today we are working with forecast costs we made a forecast last August that was a relatively High producer fee we've been able to redesign the scheme subsequently and indicate up to 40 reduction in that producer fee but we recognize it's still a forecast because we will only know what those costs are at the point that we go live however that reduction demonstrates a confidence in the abilities of the whole of Industry because we can't manage all of this ourselves but us in the middle and Industry to manage those costs efficiently and furthermore if we look at the the actual cost of putting the scheme in place we sit here today our costs are below budget if we judge ourselves by the results we're delivering we are managing or cost effectively and working tirelessly particularly Simon's and Irene's teams are making sure that the infrastructure we build is able to operate efficiently and then grow in efficiency as it goes live but that I'm afraid that the concern producers have about the cost coming from this they can they can place trust in us to manage it but the fact that the cost of operating a deposit return scheme it becomes the cost of doing business if you're a producer of drugs and that is probably one of the most significant areas that many producers remain concerned about okay um can I just focus on a couple of other specific areas then as well um I'd like to understand what what the challenges might be with this cut over period so this is where you have you know scheme items non-schem items still in circulation um and perhaps if you could offer some thoughts on how that might work with a grace period for small producers as well um because it feels that there would be a complexity there in terms of having items that are either in or out of the scheme pass that to Donald who's who's been the one very much involved in the cutoff has been a challenge this scheme has faced since the beginning um I'm going to ask Donald to talk in more detail about cut open on the grace period for small producers we really want to help small businesses with the transition to a deposit returns scheme operating there are many everything you do with deposit return has unforeseen and potentially unpredictable adverse consequences and we have to be very careful that small producers who may be relieved at Having a Grace Period do not find that they are commercially disadvantaged if you are a small producer supplying a big retailer that big retailer has a lot of power and wants things to be very simple and you know I've liked this when I'm speaking to small producers that I think they have to be very careful what they wish for with some of with some of these elements that they don't find yeah they may be pleased they're not having to address the deposit return quickly but they may find the business for the sales point of view is being disadvantaged but in terms of actually how cut over will work I'm going to ask Donald to talk some more about that please certainly um when we ran the road shows in the conference uh I was the lucky person to talk about cut over I'll refer you to my YouTube channel where the full presentation is yes it's a long complicated process I'm not going to go into the real detail of it any sense in essence cutover is the process of moving producers retailers everybody involved in the supply chain from the current way of operating in Scotland to a world where deposit returns game is fully embedded where consumers are fully aware of um purchasing items with 20 pounds one of the unique elements of the scheme in Scotland is that we will have types of containers which will be sold just in Scotland but we will also continue to have containers which continue to be sold across the UK and that absolutely presents challenges we're not shying away from that so one of the challenges of cut over is to help producers retailers and consumers understand there is a transition there will be some products which as they are wrapped down and flushed through the supply chain won't attract a deposit and there will be new products coming through which are the deposit Building Products which must be identified separately the legislation has been reasonably well designed to try and accommodate that so consumers can expect to see maybe part of the Shelf which says and retailers have an obligation to do this these items are not in the scheme they're gradually been sold through that will take a bit of time two three weeks depending on the nature of the the turnover of those goods um we absolutely understand there is a strong requirement to support consumers in particular during that phase um and we've already started to design what that campaign looks like in conjunction with retailers and producers and we'll manage that process very carefully get to the other side the reason we have the ability to have both uk-wide and Scottish specific is again in support of smaller producers because there are costs associated with changing your labels changing a whole supply chain and that was recognized right from day one when the policy officers were thinking about that we'll deal with it it's something a little bit different for Scotland other schemes have danced around it if you like but we've spent a lot of time working right across industry to to have a plan we've published a guidance on that to manage it closely um and help consumers get to the the DRS operation once we're past that so that's a transitionary period then as you said that that's you know part of the course with many other DRS schemes but if there was a if there was a grace period for small producers in the middle of that I'm just trying to think what what kind of complexity that would cause I mean if you had a convenience store for example selling whiskey and you had small you know small distilleries that are not in the scheme and the stories that are up that are in the scheme you would have quite a complex shelf of regional whiskeys some in some out I I just yeah how how does that that work I mean I appreciate your point Mr Harris that the larger retailers might just go forget this it's it's too much but what other issues might that be with that that grace period for small producers for those that are retailing and wholesale I I think I think we've touched on some of those it cutover is a temporary period and we know there's going to be some different ways of treating stock but it's for a defined period in some ways and clearly More Design what needs to be done if that's the direction that the government decides to go a grace period for smaller producers could be seen to say actually your products are going to be continued to be outside the scheme um the biggest challenge I think in all that is bringing consumers along with that one of the fundamental policy objectives is to change consumer Behavior just as the behavior of hundreds of millions of other consumers across across the world have done so to get in the habit of saying I pay 20p and bring my empty container back I get my deposit back clearly if some containers some products are outside the scheme there's a different message and we're going to have to be really careful that we support consumers in that process and as David has said also make sure that there are no unintended consequences as far as those small producers are concerned because retail is a very slick streamlined automated process it doesn't like things which are a bit different um so that's obviously a choice for the retailers to decide what to do but they would rather have consistency which certainly supports the consumer side of things so it's a challenge if that's the direction that we end up going in then we will work with industry to figure out a way to to make sure we we manage that as best we all collectively can um I've got one more question it's just about the um the map of return points um which I know is very very specific uh aspect of the scheme but obviously important particularly for people in rural areas so when at what point we have certainty as to as to what that map looks like I think you've talked already in response to Jackie dunbar's question about the the kind of collection schedules which will be again hugely important for small rural stores that maybe don't have the capacity to store but but in terms of that that map of where people expect to to be able to take back their cans and bottles when when would that come thank you what we will see is a growing Network I do not expect there to be all potential return points up and running and functioning as return points on the 16th of August what I expect to see is an adequate Network so that we as consumers can interact with the scheme effectively and many stores will either be simply operating a manual Point while they assess the situation or coming on stream as we go live what we're concerned primarily with is making sure there is enough so that the consumer is able to access the scheme it's vital that that all of us who are paying out those 20ps that we talked about are able to within our local area without being inconvenienced to the fact return Simon would you would you talk a little bit more about the mapping and the words being done to actually build the network yeah so in terms of obviously we require people to register so we have a list of retailers from small to large um The Jig from a mapping perspective whether you go for three retailers or nine the nine major retailers before we get to the convenience guys the spread is pretty much covered geographically and the small Independence particularly in rural areas enhance that ability for people to return um as you would expect the central belt is very condensed with retailers and that causes us a logistical problem in terms of number of collections um in that aspect we would look for exemptions to be taken but certainly for when you when you you map out the large retailers and then you add in the small ones you get a good Geographic spread across Scotland there will always be places that someone lives that doesn't have a store but in those instances we need to look at how we can support those communities at some point in the future okay point five quick very quickly we have the benefit of learning a lot from more than 50 other schemes that have already gone live one of the more recent ones that went live I think was Slovakia and I always get confused with Slovenia but we went live first of January last year even now they are still adding to their return Point Network as uh retailers decide yes do you know what I want to be part of this or indeed actually realize there was a scheme in place so it is an Ever evolving process our registration capability will stay open permanently right in terms of the right they decide to apply for an exemption and may decide do you know what um I recognize I do qualify for an exemption or perhaps the return rate that they were expecting doesn't actually come to pass there's a lot of unknowns here and we won't really know collectively until the scheme is live and really understand the Dynamics of where containers actually come back right thanks Mark um Jackie I think you wanted a quick question here yeah it was just um in regards to your speaking about the processes some of them are complicated and some of them aren't and I was just wanted to ask um what support you've asked for from Scottish government and and other agencies and to try and help you get through these processes the main area we're obviously in constant dialogue with governments about the operational scheme as well as the regulator and the the word pragmatism has been used a great deal and I think what's been issued by super in the last few weeks about their approach to how they will regulate the scheme as it comes into being the the main area is to make sure that wherever possible even at this stage if we're able to simplify the regulations make it more and make it more deliverable for industry in many respects if we can use common sense interpreting the regulations within that enforcement framework that sepa have issued to make sure that as a business you're able to make Common Sense decisions about what works for you what is the right small retailers in particular understand their Market they understand their locality they understand what is the right thing to do we're keen as much as we can to be able to work with them to put in place so that we can collect if they're operating a return point to in a way that works for them so they can give the service they want to give if it's not the right thing for them to be a return point we're keen to support them and that's why we welcomed the change on the exemptions in terms of the practicalities we're we're here working for industry we're you know industry are paying for this so we're very much mobilizing the resources across organizations like biffer rlg and PWC who are building I.T systems to make sure that we've got all of the capability that we can harness I think with three continents in terms of the I.T build to make sure that we're we're throwing all the right resources at that but very much working with governments and you know I'm happy to talk in those terms today the more common sense we can use in terms of interpreting implementing these regulations let if we let business people make the right decisions for like for their business back to the point about having an adequate return Network the market will decide this for us those stores know and if if they need many rural areas in particular they're there to provide a service they'll understand what they need we just want to support them with a service that enables them to do that thank you thanks Jackie uh next question is from Liam Kerr Liam avino and good morning again panel uh first of all David just uh our psychology Scotland concerned that following the passing of the original deadline for registration that there will be a significant number of smaller producers currently marketing products in Scotland who still haven't registered and if they don't buy the launch date the 16th of August will they still be able to sell in Scotland this is where I think that the updated guidance from sepa is very important because what cepa are saying if they turn up to if you've got a small Distillery with a shop and you sell all of your products in that shop and if on day one of the scheme of the 16th of August you are not operating a deposit return scheme what's the plan are you committed to becoming compliant with the scheme and what is your plan for doing so and I think what is difficult for a small business the businesses we are dealing with are not used to being regulated by super if you've been regulated by sleeper for the last 20 years you can read these documents and understand them better so I think there is a technically you have to be registered with a scheme administrator or directly with sepa on the 16th of August to sell in Scotland what has been set out is a document which you can interpret and I used to work carefully interpret that because it's giving guidance it's giving guidance about having a plan in place Donald yeah I mean if I may simply say and I said I wouldn't speak on behalf of the regulator um super very aware that a lot of organizations in our Network to deal with have never dealt with them before so just recently super published a guidance to how they would support regularly and ultimately enforce and as David said the pragmatic view they are taking and we are again speaking on their behalf You may wish to have them directly in front of you at some point I've said if you're committed to complying but you're struggling for whatever reason simple will support them we've interpreted that as you have to aim for compliance with regards to the dates of their genuine reasons why you haven't been able to do so staple will continue to support them so they can get compliant we will maintain open our registration window um for as long as it takes so there may be genuine reasons why a company which has not been able to register in time it is not as far as my interpretation is concerned a shutter if there's requirements that need to be supported by sipa that organization can be helplessly but to get through and register and continue to trade nobody wants to close down trade for those organizations thank you but go on limb could you just clarify that for me just so I understand it because I'm slightly confused here super we've got regulations which have been enforced and put in by the parliament and what you're saying is sepa don't have to abide by those regulations they can interpret them as they see fit if they think they're moving in the general direction that's not my understanding of the law but if that if that's what you're saying I'd be interested to hear that just repeated with respect could be no that's not what I said um the laws are laid down by the parliament super regulate against those super Harvard approach to regulation which is not um black and white they have a desire like a lot of regulators to support organizations in becoming compliant with the regulations and believe you me because people are very clear they will absolutely go to the letter of the regulations but they have a role a pragmatic role to support and help organizations get to compliance this is a change for these these businesses and they need time to adjust to that and say part taking a view a pragmatic view that says if you have an attempts to comply with the regulations but for whatever legitimate reason you're struggling super will support them clearly if you're a business which says I'm going to ignore those I'm going to find ways around them you'll have a very different conversation with your regulator so to be really clear the interpreting the regulations has laid down and approved by the good people here but they are supporting businesses to get to a position of compliance which is what everybody wants thank you for clarifying sorry to tread on your titling so to be absolutely clear I'm going to ask you another question in a second but just to reflect back what you've said if my business if I had one was not registered by the 16th of August I may not be able to sell in Scotland going forward the question uh so if you could answer that when you take the next question mark Roscoe asked some interesting questions earlier about the support package that the measures that have been put in place uh to help smaller producers participate in DRS notwithstanding those support measures will then nevertheless be small perhaps Artisan businesses who you project will go out of business due to this scheme perhaps due to the obligations placed on them as detailed by the deputy convener earlier firstly in terms of compliance on the 16th of August as the regulations stand you must be registered with either CPA or scheme administrator on the 16th of August to sell in Scotland what Donald Davis described is there's a within the way these regulations are being forced there's some scope for supporting businesses who are not fully compliant on the 16th of August to become so as an organization what we're committed we've been we have the opportunity to continue to register these businesses is to work with them to address what concerns them about being able to being able to register and operate deposit return which links into the question about whether they will still be here due to the complexity of bringing the scheme to life we and I'm going to ask an Irene because we've spent we're spending time with the organizations representing small businesses to understand what issues have not been addressed that we can fix and find solutions for and it's it's very much for us about being practical finding the problems and seeking to address the minority thank you David I would like to say the absolute outset It's Our intention that new businesses you know would suffer you know Financial harm through this as David said there is absolutely a cost to the scheme with all producers contributing to that because it's a change in how we're recycling materials but you know the whole board and all of the exact team within circularity Scotland you know as our objective to support all businesses through this and as a result of that what we've been working on our solution-based workshops with the associations that represent these smaller producers and um and this you know this is the dialogue's been going on for some time but we've we've increased the intensity of our our um discussions with them and coming up with the absolute solutions that are required so I could give an example which is something we're exploring it's not it's not committed yet but an example would be um you know is there a threshold of smaller volumes uh for um wine importers for example that would be pragmatic common sense and something that we could look at for it for a short period of time so we are absolutely committed to coming forward and working with these organizations to get solutions that are going to help them navigate their way through this change and as a result of that you know the ideal is there there are no businesses that are adversely affected by by this implementation later okay thanks Liam I'm going to come to collect the Stevenson Colette okay thanks convener and good morning panel um yeah I've got several questions and I was invited along to a small distillery in my constituency recently who have got a variety of concerns um they produce a predominantly whiskey and gin and um they've attended the Roadshow and they didn't feel they felt they were more um confused by the Roadshow and a lot of their answers and sorry questions weren't answered so touching upon some of the things um you spoke about their their bottles are very Exquisite and they're all wrapped they're absolutely beautiful in fact when I visited one of them was actually in terms of touching upon a circular economy in single use it was getting used as a lampshade and a candle holder so their big concern in terms of incurring costs is that as a producer and a small producer is that they would be incurring that costs for each bottle however the likelihood is these items will not be brought back in and more often than not what they do do in terms of some of their suppliers is the actually um just fill the bottle back up rather than actually um you know recycle it and the other thing um they pointed out was because the bottle is so beautiful more often than not the likelihood is that wouldn't be a litter item on our streets so again um maybe you could actually touch upon that as well and I would take up your offer of to go and visit them and answer some of the questions because the other I the other areas that they asked about was the import label they've consulted to hmrc who've said that it's actually um throat spectova in terms of the import label and the other I am aspect is because they're bottled wrapped what about the re-labeling again can you come up with Solutions there but Keen to know what your comments are on that thanks thank you um I think what you just outlined there is it is a compelling case for where you have tiny volumes that we potentially seek a route to get them Exempted which is something that we're keen to explore um but notwithstanding that which would that doesn't exist today what are we doing today primarily is looking at this effectively a sticky labeling solution to provide a low admin practical option for low volume producers and we're talking about producers items below 25 000 units a year so it's not in the handmade category it's a much higher volume Simon could you touch on that please yeah so to enable small producers who don't invest in labels or don't bark so a lot of them don't barcode their particularly the small whiskey and gin guys and people don't actually want the barcode on the bottle either particularly if it's a attractive bottle so we're in the process of finalizing the solution that will allow a producer to order a gs1 compliant barcode we'll provide them with labels which they can provide to the consumer with the bottle should the consumer wish to take their 20p back they have the ability to apply the label and take it to a machine or a manual turnpoint to get their money back and if they choose not to because they want to turn it into a lampshade and they don't want to take the extra sticker off and then then that is their prerogative but we absolutely want to make sure that you know the the small producers don't have to invest in heavy labeling and kind of change the dynamic of their bottle we want to give them a simple solution that allows them to be able to offer the consumer their 20p back a few other questions you add in there very quickly um in terms of consumers keeping the bottles in appointing a scheme administrator the responsibility to achieve 90 passes collectively over to the scheme administrator and totality so that your your Distillery wouldn't have to worry about specifically having 90 return rate that would be taken care of by us um and the point about refillables if the company is marketing them as a refillable product which is a very environmentally friendly approach then they are out of scope of the scheme and they wouldn't wouldn't need to take part okay and as far as I'm aware they've been told that they don't need to take part you know compliance consult with super who are the ultimate determinant of whether they're in scope or not but um they have options there you've gone about setting um your fee structure for producers as well and did you look at aspects such as how costs would be like distributed across businesses or the environmental impacts of different materials and are the producer still raising concerns about the free structure following the changes made in the support package as well thank you um in terms of the dialogue that we're having with producers we've had obviously we had a lot of adverse feedback back in August we went out with the original fees that were quite High reflecting a set of estimates at the time when we're able to revise this in November the feedback we've had pretty much across industry is that of course they'd rather it be less but we're now at a level that they feel is realistic and reasonable and the message we have given clearly is the one about commitment to developing the efficiency of this so that we you know I would like to see the fees come down over time as we're more efficient obviously in an inflationary world that is something of a challenge but be clear there is an absolute commitment there to keep improving it but also what we've done at this stage again taking feedback that came from industry but we've we've looked at reflecting the different operating costs for the different material glass is more expensive to handle we don't have a choice about whether glass is in the scheme the regulations require it we have to collect it but it costs more to handle that's reflected in the fee we've reflected the different differential costs of operating with the different materials but we have also reflected the different values of material aluminum cans when they're bailed are extremely valuable glass is not and that's one of the other features of the fees the other points of stress on this is that the way we are set up is that we effectively have a fee structure that's flat on a per container basis and if we ignore any fixed costs that might be within the produce of a systems or anything that they need to do within their company I feel that one of the benefits we have here we're open access you don't have to be a member to sign up with us you do not have to be a major producer who can provide funding to sign up with us we are completely self-funded so whether you are the smallest company or the largest drinks company in the world you're paying the same price the big guy is not get it or is sharing their buying power with everybody across the Spectrum and Beyond where we are today we will right now we're relying on a lot of estimates and assumptions about what will actually happen when this goes live how will the cost build up what containers will actually be placed on the market will there be changes in the nature of containers placed on the market as a result of the scheme very quickly when we go live we become very data rich that will enable us to assess the drivers of costs assess whether we still have the most appropriate fee structure and we have the scope to evolve it very much with the eye to it being based on the cost drivers but also Fair so the producers are paying a fair fee for their share of the cost that are created thank you just last question last one and then I'm going to come to Monaco there has there has been reports like in in the media and you know and whatnot in social media and things about and and you know from Scotland and and then you know cross-border and potential fraud to be carried out and what have you done to prepare for that and and to what extent do you think at all our car or how how big it will occur tip a function of this fee scheme is that we are implementing it in Scotland which has an open border with England and we are not we do not have the power to compel producers to label and differentiate Scottish Market product we expect a great many of the products placed on the market in Scotland to be treated so we wish we could we wish if we if I could change one thing today we'd have the power to enforce those labels but we don't it's the nature of the world we're living in but as you would expect a great deal is being done which I'll ask Irene to talk about in terms of addressing and managing the risk we can't eliminate it what are we doing to manage it thank you just pause that there because I think that's going to be delved into slightly later uh in in the session um and try not to uh tread on anyone's toes but I'm going to come to come to Monica if I may please thank you Kid winner and good morning panel it's been quite an interesting session so far and I'll probably pick up Owen Kelly Stevenson's questions about small producers clubs from my my interest is today but at the start I was quite struck by your comment that we have um you know more than 100 Years of relevant experience in front of us today so on the one hand that's that's reassuring um but we can see that there's many small producers still not getting access to the the answers they need so I'm hoping today that we we can make some progress on that um sticking with small producers I think Kelly and I have been speaking to the the same local businesses um but they're not allowing um the example I have in mind as a small producer um who didn't sign up before the deadline they haven't signed up yet and did attend one of your in-person road shows but they have left their very frustrated speaking to other small producers they have these common concerns and I think all of us want a more circular economy but we don't want people going round and round in circles trying to get very basic answers and being passed between circularity Scotland super we've heard about trading standards and of course the minister in this business they did the minister didn't apply to them but what I think I heard David had to say a moment ago is that the example that collects Stevenson um describes they might actually be exempts um because they do are pretty on such a small scale at the moment and they are trying to helpfully promote um refill and reuse um so if they are exempt who would tell them that and why I've not been able to get that information so far from circularity Scotland or from cepa or from the government there is no exemption for them but what we've indicated is one of through the workshops we've been holding with small producer Representatives one of the requests that's come forward which we're supportive of would be just that um we can't repeat enough if you're speaking to small producers or any small any business that's got concerns please get them to call us because we're having a huge amount we're getting it fed back to us constantly particularly through the website misinformation and and poor interpretation of either our role or the regulations and if somebody engages with us to support them we're not seeking to pass them off to sepa or send them away to read the regulations we've got a customer service team who've now been doing this probably for six months about a huge amount of knowledge supporting the hundreds of small businesses that have signed up or still talking to this to us obviously it concerns me if they've attended workshops are left concerned that they haven't got the answers because because we're committed to addressing that so the first thing is to make sure that people God thank you to your customer service team they clearly have a busy and challenging job to do um these small businesses that we're talking about today they're heavily invested in local communities have invested in their workforces and securing people's jobs and growing their businesses um thinking also about nature and sustainability um they're not shy at picking up the phone they're not shy emailing msps and ask people to come out so I just wonder how many times do they have to fall in and ask the question before they get answered and is it right to pass them to see per and as an opportunity to actually get super circularity Scotland and others that can enter in the same room because it seems to be the problem that people are getting past from pillar to posts for the first point on this if that is the situation yes please don't put them in touch with customer service put them in touch with me so that I can get to the bottom of what the situation is we have and this is a big change a lot of these businesses have never been regulated as you talk about that these are businesses that are committed to their Community many of these small businesses they're already there in terms of being green and meeting their responsibilities the regulations have come along and they're caught it's not it's not us that's caught them with the regulations but we're the one organization that's been created to provide an answer to this um we have well all I would say is if you've got a situation where people have spoken to us and they're not happy and they're approaching you please contact me directly because I want to speak to them and get to the bottom of what the issue is and make sure yeah we've grown this company from nobody to 50 people in six months so if there's if there's something that's not working there I want to know about it so that we can fix it wondered in terms of and it's a very genuine offer I'm sure that you've made but as chief executive um and you've got a lot of operational um stuff to rule out from what you've said um you know is that a good way to do business every single problem has to be channeled to you to get an answer I'm not saying that to be um you know um cheeky in any way but it's just about you know if that's where we're at right now and we've gone beyond that original setting update um are you feeding this back to to minister are you discussing this with the the minister Lorna Slater because you've picked up that you think maybe there should be a case for exemption you're correct it's not in the regulation right now but are you feeding that back to government we are constantly in dialogue with government about the evolution of the skiing Donald talked earlier about managing the scope of the scheme as you'd expect anything that we can do to make this more manageable or more implementable we're in dialogue with with we're not just talking to the producer we're talking to everybody you could have a saying sorting this um but as I say we've started this business from nothing and we've had to build it very quickly one of the things I've found many times is I've had reports that people can't speak to us that are answering questions we have a CRM system I can go back I can check what discussions have taken place we've had a lot of incidents where a huge amount of time has been spent obviously I'm not suggesting this is the businesses you're talking to but answers are being but people may not like the answers a lot of this you know people don't want to operate a deposit return scheme we can't make it go away um and therefore we have spoken to people they've not been happy with where they've got to they've written they've written to their MSP or their MP who's contacted us so we need to know we've got great team of people there all learning fast in a new business and only by knowing where there is a deficiency will we actually be able to go and fix it which is why I do urge if there's a problem that it gets reported to me so I can talk to the team and actually deal with that incident because every time I get a letter from an MSP talking about a business the first thing I do is go to customer service and say right have these people spoken to us what have we discussed where was it left to try and make sure that we are we are closing down problems as they arise I think it's going to be more open and transparent because this is about confidence and trust and people being able to get information and get that Clarity I know Donald mention the YouTube video and I'm sure there's lots of resource out there but when you're capturing these inquiries uh you put me you might have done it already but is this all on your website you know is this information being shared so that people don't have to keep you know coming to you with bespoke inquiries Donald Trump pick up on the Columbus point a couple of things in there um absolutely like any organization responding to queries as we see regular types of queries we update our website um some of the queries are related to the legislation super update their website as I said before we're organizing and collaborating and trying to coordinate all the various Communications that happen to ensure that there is a growing body of um support and evidence we are producing guidance tokens documents more and more frequently I think another two or three have gone live in the last few days there is a group which we haven't mentioned yet which again is in relation to the Gateway reviews because some of the questions that are asked of our team we genuinely do not have the answers we do not know what is the detailed approach for how vat will be in the real detail addressed but we're working very closely with Scottish government who are on point to address that so there is an organization a group set up by government Chair by government with representatives of retails producers ourselves super zeroa Scotland the system-wide Assurance group and it is the body which ensures that all the hard problems and questions many of which sit outside our our remit in scope are logged and dealt with some of those sit with government to address some sit with sepa some super zoo with Scotland but there are representatives of all the organizations affected by DRS on that group so that's another Forum which is set up and shared by government in recognition that yes there are a lot of different moving Parts here not all of them sitting with ourselves not all sit with super for example so governments put itself in the middle of that and is using that as a forum to also support the resolution of these these questions about um you know these beautiful bottles that you know can be reused for lamps and candles and so on um I think we both spoke to the same business and they're concerned that the bottle has to be returned for recycling it has to be smashed and now that you have a bit more knowledge of this and also the parliament will be looking at a circular economy Bill do you think there needs to be more flexibility around that type of situation that we've described to do absolutely if I could answer that question um we're collaborating and working really closely with um sipa and the Scottish government and the organizations that represent these small these small businesses and and we're coming up with solutions to the the specific issues that they're raising and working out how we can bring that those solutions to life within the current legislation perhaps over a phased period and you know we've I'd also like to see that small producers have been you know since my time in the business of circlarity Scotland have been you know a real priority and we've dedicated an enormous amount of resource to working on the the answers that that they're looking for um and and but it's it's it's working with governments because if if the legislation is is as it is then we need to onboard these small producers if there are specifics like you're you're um Constitution is seeing the then that is a that is a no that we can investigate and come up with a pragmatic solution and then take that to government as a as a suggestion from the trade bodies from CPA from circularity Scotland and from government that's very helpful thank you um now I'm getting some dirty looks from from some people around the table who want to ask more questions I just want to reiterate that I'm going to run this on a wee bit so that the members who've come to this committee are not part of it can answer questions so don't worry about it you're getting in due course just before I move on to Liam with his notes questions I want to ask a question and see if I can David be of help to you you talked about an exemption scheme and the ability to exempt uh businesses small businesses would it be helpful to tell us when you think those guidelines need to be in place to make it work next month this month time is not on our side and therefore everything that we can do as you probably gather from we're working at incredible Pace here having throwing a lot of resource at really trying to get to the bottom of what can be done to address the concerns of these small businesses we've been through a month where the level of political uncertainty has made life difficult because a lot of Industries seen that the narrative that's out there and slowed down but we've kept pushing hard and not sat back on this but as we go through with obviously various you know narrative that's out there about things being done small producers the sooner decisions are made and we can deal with certainty and plan accordingly the better very simple terms I'm sure whoever's uh needs to be watching this committed me to will be watching it you need the answer now is is what you're saying okay Liam yours is the next question thank you convener I'd like to go back to something that Jackie Dunbar asked about earlier which is Collections and space uh first of all what do you advise smaller retailers or rural retailers to do if let's say they have particularly large deposits come back or let's say there's a local event and their uh space is overfilled what is the contingency plan if the uplift that is needed is more regular than the usual collection schedule what should they do okay Simon could you yeah so we do have a opportunity for on demand so contact us and we will arrange an on-demand collection um if they know about the event then get in touch in advance or already working with for example the guys that organize a fringe to ensure that there is a suitable collection process available for The Fringe Festival in August so the more notice they can give us of any events then the more we're able to plan and come up with a solution for them so it might be that we can get mobile rvm in place for that event for example so we will absolutely aim to work with them to support that and in terms of if there is more than expected or if someone turns up with a van full to a rural community under the legislation they technically can say no that's too much it's not within our scope to to take that much back so I appreciate that that might be difficult but they do have that right now obviously we'll do everything we can to support them in collections be that ad hoc or making sure the frequency is is sufficient for them because we also understand certain rural areas there's going to be an element of seasonality thank you for that and perhaps in my next question you could just answer will there be or confirm there wouldn't be an extra cost uh to the retailer for any adult pickup but secondly then David I is the I looked at recently as to the the collections have a value the the products have a value uh and if that's right is the retailer liable if the products are stolen and if so are there Insurance products available to cover that risk if the containers that the payment of the deposit back to the retailer is based on the items that are collected and counted and therefore therefore there is an issue for security if you've got a small store you can't just leave this in the car park um we in terms of insurance we're not an insurance provider I have heard reports that some challenge around this additional risk being covered by insurance um but to be clear from from where we are sitting we need to collect the material to pay the reimbursements of the deposit so security of Returns on site responsibility for that rests with the retailer so the risk is on the retailer Simon I'll put this question to you and you can come back on the ad hoc cost but you've obviously signed a deal with biffer who will collect the products what are the kpis that CSL have put on biffer to protect businesses from poor Service uh if that would were to happen uh regularity of collections happening on schedules strikes or whatever and given this committee's remit what obligation on biffer is there to be Net Zero okay so come on your previous one so all collections are free so as part of the producer pays the producer funds the scheme effectively so there are no charges for any collections be that for Hospitality or retail so if it's an adult collection that remains free of charge as per all other collections in terms of uh before being Net Zero so the technology and infrastructure right now isn't to where we would want it to be to run electrical electric and hydrogen it's very expensive and it doesn't it's not the best solution right now so we have invested in vehicles so you have glass top loaders and you have primarily panel Vans for the small collections which are much more efficient they will be Euro six engines and we are working to ensure that when we come around to replacement of those Vehicles we get to a position of are we ready for the infrastructure for electric and hydrogen can we change and upgrade what I would say in terms of kind of getting to Net Zero the solution is predicated on where possible to use as much existing mileage as possible we're also using retailers for back call so any empty running that is taking place between kind of retail outlets and Main recycling hubs will be done primarily by retailers and the rest will be picked up by biffer but absolutely they are tasked with moving towards carbon neutral now in terms of kpis we will be managing in day so the current collection frequency is based on in day they will be collected in Day based around somebody's operating hours and based around any collection restrictions because we're mindful that particularly in cities you can't just put a bin on the street so Biffle will be managed on a daily monthly and weekly basis to ensure that they're Meeting those kpis and any concerns we have should be raised directly with circularity Scotland and we will come back and challenge biffer in though in those meetings um in terms of strike planning it should there ever be a concern then we would work with biffer to kind of get to that point but certainly from our recruitment process and bifra not a unionized environment in the DRS division that have been created and not a unionized environment so we don't expect that to be an issue but you never know in terms of kind of there is some bad press for biffer in the past DRS is a completely separate division has been created to deliver the deposit return scheme grateful thank you that's Liam I'm not going to come to the deputy convener Fiona uh can I ask how the Scottish government has kept you updated or informed in relation to whether an internal Market act exclusion will be granted have you sought or received any guidance from the Scottish government or sought independent legal advice regarding how to prepare for different scenarios I'm bearing in mind there's been hundreds of millions of pounds of private company investment put into the scheme for our 16th of August School live is there a risk of legal action for compensation from any of those private companies of whoever may be concerned in refusing that act exclusion thank you in terms of our knowledge of the internal markets act issue I guess our knowledge of the situation is no different to what's in the public domain obviously when we are speaking to government we're asking for an update on the situation a view of what's likely to happen together with our partners we're seeking any information we can on where this may go and as I say I don't sit here today feeling that I know anything that isn't in the public domain on that um in terms of our we um and when this issue came to light the first thing I did was called our own lawyers to explain precisely what the situation is as you would imagine and therefore my understanding is that the regulations remain not the correct terminology is but they're good and robust and legally enforceable in Scotland there's a challenge if you try to enforce them with a business out of the border and that's why the exemption is required um when we are looking at how we expect it to play out my belief is worth that exemption not and our our legal advice was that the risk assessments of it not being in place was low but I recognize it has become politicized which for us we feel increases the level of risk we expect the big producers if this game goes live on the 16th of August that the there may be some exceptions but certainly the vast majority of producers we expect will operate the scheme because the regulations remaining for us in Scotland and it's the vast majority of those producers that we are speaking to recognize their responsibilities here and will will act in a responsible way on the understanding that that exemption will be achieved at a point later obviously in terms of detail planning for that particular issue and whether producers who've made Investments retailers who've made Investments or our partner organizations have made Investments would be coming back to recover funds that's probably a more difficult one clearly there would be if if the scheme did not happen as a result of that there's an awful lot of Investments out there that would be looking to get recovered okay and then finally um you said that you want to know where there are deficiencies the Scottish uh Grocers Federation have been cleared to us and in the last week have written to this committee and there are you know many outstanding issues which you must know about um because they'll have told you uh why why are they still um having these concerns and and can they be resolved by the 16th of August uh retail handling fees have gone from cost neutral to um actual costs and card reimbursement was not no longer seven days but I've moved for monthly in terms of cash flow Collections and may not be on on a daily basis and there's obviously concerns about investment there the planning regulations for reverse vending machines are benefiting supermarkets but there are difficulties in more localized collection and I think the concerns there in terms of the terms and conditions of signing up means that you know it's a bit of an open you know an open checkbook that they're expected to say and when all these things are still outstanding so why are they still writing to us to express their concerns that these issues are outstanding and how do you intend to resolve them in time and David I just say to you that please come a short answer a fulsome answer but a short one would be would be appreciated we're continuing to work through all the issues we're aware we we have lists of issues coming from various organizations with the stage that we're at in building this of course there are still items three to be resolved if we look the return handling fee we're happy to discuss that in more detail but we have an agreed method which our members set out Scottish girls Federation one of those members who signed our Constitution which were instructed by in terms of the process which has to be taken to calculate a fee which aims to put the retailer in a cost neutral position based on the cost that has been recovered in the regulations that's something which is being carried out through a very extensive process involving consultation with retailers around the payment terms point the majority of return points we will be paid seven days after we count the returns what we have done when we've issued the agreement that the document which sits in place between the retailer and the Escape administrator is we have set out that for automatic return points we are seeking payment 30 days after return so the return is immediate trigger of that payment 30 days later so it is not a difference between seven to Thirty Days it's collection counting plus seven days to 30.
The reason for this is because the vast majority of automatic return points will be operated by the biggest retailers they have long payment terms with their suppliers and therefore will get a cash flow benefit as the scheme goes live we recognize that a number of small retailers are investing in those machines we have spoken I'm speaking to one of the I won't say we stayed on who we're speaking to when we are working our way through speaking to trade associations to make sure that we are able to address the concerns of the smaller retailers that may be impacted by this one of the challenges we have is that we are trying to conduct effectively a commercial negotiation between some of the biggest companies in the world on the public scrutiny and therefore we're having to work on issuing draft contracts and putting these terms out there to get in a position with these very large companies that is not exploiting those small producers who are feeding into this system and we're having to find compromises through it we've seen with small producers we can compromise we will do the same way possible if there are issues with convenience retailers and we will work through the issues that are on that list as best we can okay so I'm just going to come now to the members who are not on the committee I'm going to start with Morris and go to focusing and then go to Brown metal where's golden thank you convener um just to follow up some lines from Monica Lynn and Mr Harris I think you've mentioned twice that circularity Scotland's in a constant dialogue with government so I'd just like to ask you just simple yes or no's around if topics have been discussed and I won't ask you any further details around what was discussed so um as Mr Jones alluded to Biff has bought almost 200 vehicles to transport the return containers they're not Net Zero they're actually conventional petrol and diesel vehicles pumping out emissions so simple question has the minister raised this issue with circularity Scotland no thank you and clearly we've seen reports around biffer's environmental record the refined 1.5 million pounds for illegally dumpling waste abroad with a judge describing their actions and I quote as Reckless and bordering on the deliberate has the minister raised any questions with circularity Scotland around biffer's environmental record we have discussed buffer at length whether I don't recall whether that specific issue has been raised but if you'll allow me we selected biffer for a very extensive tendering process we looked at their ability to manage the collections and operating system in Scotland for Scotland's deposit return scheme also their ability to provide the investment that we required as a shell company at the time to meet the obligations we had been given at the end of that process which included a vast range of companies large and small we reached the conclusion that in biffer we have the right partner we were aware of the issues which had Arisen to be clear they will have no control over where materials are going they're providing a logistical operation um my intention wasn't to raise further details about Betha but you've raised the tendering process in terms of waste collections is it not the case the way the tendering process was run only uh a large multinational business could feasibly win the bid we looked at a range of operations so the companies came forward across a broad range of sizes we selected and to be perfectly clear when we got to the end of this we selected biffer because they had the resources to put the investment in place particularly driven by the operating centers that the new facilities need to be put in place within the contract they are obliged to use existing movements as much as possible I.E to contract with local existing providers happy to talk in more detail at the work we are doing to make sure that takes place but it's there's more to this than just appointing one contractor it's a contractor to run the system a system which must use as much as possible of what is already there you as far as I can on that I need to go to focusing as far as other questions are concerned so Fergus thank you one of the the main concerns about DRS is the public the public will have to pay more more than 20p extra for um individual beverage items um Can can Mr Harris Can you provide any Assurance to the public who increasingly will be coming concerned about that especially those who are elderly and firm who don't have access to a car and therefore will have to Hulk um heavy bulky Goods back to a shop which may be some distance away from their home um can you give Assurance about what level of price inflation there will be above the 20 some industry figures say above the 20p some industry figures tell me it would be 40p others around 30p some even more than 40p but can you give any Assurance Mr Harris about what the average increase will be about of the 20p okay the only thing we have any control over is the fee that we charge the producers whether the producer passes that to their customer or not is the producer's decision and likewise whether the retailer is applying a markup to that fee or not is entirely a decision for the retailer Irene do you want to come in absolutely sorry I'm going to let Focus come back in on that because somebody's got to pay I guess well indeed and I'm just quoting from a Herald article interview with you a good self Mr Harris in which you said and I quote if if you're accurately quoted if we take into account the fact that a cost for operating this system you anticipate that the producers will seek to pass that on it will find its way down the chain so you've already admitted that there will be cost inflation above the 20p what I'm saying is that members of the public particularly the poorest will increasingly as we move towards this scheme coming into effect if it does come into effect we want it about the impact that this will have in the middle of the worst cost of living crisis in in living memory if we look at it if we look at a cost that's applied across an entire market and the comments in the herald what the point question I was asking the pointer would make what I expect that overall producers will seek to recover that from their customer be that a wholesaler or a retailer yes I do I can't which is not my decision I can't give any guarantees on that but if you apply a cost increase University across the market common sense says that's what we're going to see the time was short and I wanted to cover brief three brief issues but important issues the British class Federation advised that this scheme will result in a diminution a reduction in the amount of glass recycling into new bottles and jars and the reason for that is the there is no re-melt target but also the to crushing machines will be used by biffer they have procured crushing machines and that means the glass will be crushed into fragments so small that they cannot be recycled into bottles of glass and that means that the carbon saving which comes from recycling to bottles which is 580 kilograms per tonne will be reduced to around about 4.5 kilograms per tonne a reduction in carbon Savings of over 99 percent um now given the glass recycling into bottles and jars was estimated by zero waste Scotland uh back in in 2017 as being between 70 and 90 percent uh isn't there a serious concern that British glass Federation Whose advice was taken by the UK government who then Exempted glass from their proposed DRS isn't there a real concern Mr Harris that and you don't set the policy I understand that but you're operating it so isn't there a real concern that this scheme will actually result in less recycling of glass not more thank you firstly as as you kindly said we did not set the policy to include glass I'd like to ask Simon to talk about what we're actually doing in terms of managing glass and making sure that recycling takes place Simon please so if I have not purchased crushing machines for glass um the we expect natural breakage we have spoken to the people that may use Crushers have been hospitality and Maria engagement Hospitality to understand how we can adapt those crushing machines because it's primarily for space to ensure that fragments are less than are greater than 10 mil or no smaller than 10 mil um we're working with reprocessors so we're in the process of just working with glossary processors within Scotland to understand what size they can realistically process back into color and we're working to understand what they do with anything that doesn't make it into back into color but we are talking um 90 I need to check and we'll write back to the committee but we're talking about 98 is likely to be recycled with two percent going potentially going into aggregate we do that just it would be helpful to write to the committee to answer that specific question I'll get the clots to make sure that that's relayed to you as it was on the official record Mr Young you were always difficult to to keep keep on time when you were sitting at the far end of the table I would urge you to do it short one further question otherwise you'll upset Mr riddle and he's sat right next to you well I wouldn't want to do that again one final question um plainly small companies throughout Scotland whether they're producers whether they're retailers whether in the waste management sector are now worried that their businesses will be seriously adversely affected some will have to close somewhat will and are already planning to issue redundancy notices and Clause there pause they've recently read Mr Harris that you have a reported salary of 300 000 pounds and this as as you know is a matter of public concern as you said at the beginning so do you recognize that anger and concern and can you just clarify for me is three hundred thousand pounds the total remuneration or is there pensions and other benefits above that and is it correct that you're actually working part-time because you have substantial other commercial interests very substantial other commercial interests to which presumably you have to devote some time so can you answer those questions and perhaps give an indication about how many hours per week you devote to the CEO job at a salary of three hundred thousand pounds of circularity Scotland thank you um I can confirm that's my salary I can confirm that I work full time in the business um I would say at the moment I'm working in the region of 80 hours a week on circularity Scotland I have had to I was asked to do this job industry approached me and asked me to take the job on the board set my pay they made the offer and I accepted that one partly because I've had to recruit people to run my my other one business which I have so that I can devote the time which is needed to this I was asked by industry to do this I gave my word I would do the job and deliver what they asked me to do that's why I'm devoting so much time and allowing people to take care of the other business which I own Irene and if I can do at that on the back of the membership body that we have and the way that we're organized in terms of our corporate governance um and this this the level of um uh professionalism that those member bodies have you can imagine that we have a similar um level of governance within our own business and therefore the the appointment um the remuneration process is all approved at board and through the remuneration committee and that is put to members for their approval as well and all of that is is within even with a commercial lens as well question just so I can clarify I didn't miss hear something you I think you said 80 hours a week roughly that you're working did you answer Mr Ewing's questions about any other payments regarding pensions and such like all right sorry I may have misheard it I I receive a pension contribution at the same level as every other employee of the company okay um Mr whittle hey thank you um good morning and Nick good to see you again Mr Harris um I was considering our conversation we had last week and consider the implications of what you had to say and I'm looking at it from a practical sense and since then I've actually happened to meet up with um a constituents of my early elderly couple who get their groceries delivered by the supermarket um they already recycled they have a glass bin they have a plastic bin they have a general waste bin and they also have a garden waste bin um and they're they're collected by the council now they will be unable to return um the the the items which will be uh will be subject to a 20p charge and will no longer be collected by the council and that obviously they will be out of pocket and given that um as you said yourself that uh you will be ramping this up from the start there will be a significant number of people um in that that particular situation who are unable to do to take part in the deposit return scheme isn't the reality in the Practical terms of and I recognize your role in this in terms of an administrator but isn't the actual practical practicalities of this scheme in that those in that kind of situation as my colleague Mr and Mr Ewing said those probably in the poorest and Society will be the ones that actually have to pay for this scheme as it ends up they are the last people in the in the in the line the issue of how to deal with home deliveries has been one of the problems of implementing these regulations Donald could you could you talk about where we actually sit at the moment in terms of this situation so the legislation has passed by parliament um made it very clear that retailers Who deliver remotely online have an obligation to go to Consumers houses and collect those empty containers I think it's the first scheme that's attempted to do that at scale there are one or two other schemes which do honest part basis so it's new piece of challenging legislation barely and squarely sitting with retailers to do that and that's been known and laid out for probably about two and a half three years retailers have spent a lot of time trying to figure out how to meet that obligation and have been unsuccessful and that was one of the reasons why I think recently the minister announced an intent to make some modification I think I'm going to delay that particular part of the implementation they are still directly engaged with the retailers to figure out how some of that functionality that capability can be delivered that entirely sits with retailers to to deliver it's an obligation that they are still working out how to how to achieve Our obligation is to go to the Depots where those retailers delivery and collect the empty containers from there and we're working as far as we can to support that design effort but it's it's a it's a it's a design solution which the retailers have yet to to to deliver is a brown I was going to let you one further question because everyone else had two but if if you're sufficient on that that's I thought that thank you I just think that you know that what we're discussing here is the practicalities of this game and what we're looking for here is is the ability for people to get their deposits back and also to be able to uh recycle product and in that circumstance neither of that's happened okay uh thank you and and there are a huge lot more questions which I was hoping uh to get answers on um and you know one of the questions would be you know do you get do you get a refund of your 20p or do you get a credit against your shopping it may be that the refund is critical um at certain stages to certain people rather than a refund against the shopping but these are questions that still to be answered um and I think the committee will have to consider what further work they want to do on this which we're going to do briefly in closed sessional to this meeting and I'd like to thank the panel there for for the evidence that they've given uh to this meeting and I would ask them to Quick quickly leave so we can get consider what's been said and we'll go into closed session thank you thank you for your evidence