THE UK Government is to consider whether to allow Holyrood’s controversial recycling scheme to go ahead after saying it had finally received a “formal request” from Scottish Green minister Lorna Slater.

Ms Slater last week told MSPs that the Scottish Government had sought an exemption from UK-wide rules for the Deposit Return Scheme (DRS) as far back as July 2021.

However the UK Government said she only made what it deemed a formal request today, in a virtual inter-governmental meeting on the environment.

Whitehall sources said it meant the “starting gun” had been fired on consideration of whether to grant the DRS an exemption under the UK Internal Market Act.

An exemption from the post-Brexit Act, which is intended to harmonise trade within the UK, would allow Scotland to start the DRS ahead of a version due in the rest of the UK in 2025.

Without it, the Scottish scheme would be confined to drinks containers produced north of the border, rather than produced anywhere in the UK.  

Scottish Secretary Alister Jack has already warned that the bar for a UKIM exemption is “very high”, suggesting Westminster may reject the application, guaranteeing a constitutional row.

READ MORE: Speculation UK Government could block SNP-Green Deposit Return Scheme

The DRS is due to go live on August 16, with 20p deposits added to drinks cans and bottles in Scotland, with the money returned when they are recycled.

The scheme has been vociferously opposed by many drinks producers and sellers, who say it will increase their costs as they struggle with inflation and energy costs.

Many have refused to sign up to the DRS in case it leaves them with financial liabilities.

Ms Slater, the minister in charge of the DRS, last week boasted that producers responsible for more than 90 per cent of the drinks cans, plastic and glass bottles on the shelves had signed up ahead of a key deadline.

However it emerged that less than 20% of drink producers had signed up, as thousands of the small firms seen as most at risk had refused, with employers up in the air.

All three candidates in the SNP leadership race have said they will pause or slow down the DRS, adding to the uncertainty over it.

As the exemption is being sought for the DRS as it stands, if  the next First Minister overhauled it, it could trigged a fresh consideration process. 

READ MORE: UK Government set to block Scotland's troubled Deposit Return Scheme

The last time the Scottish Government secured a UKIM exemption, over single-use plastics, it took Whitehall almost five months to give a decision.

With barely five months before the DRS is due to start, Scottish ministers will be seeking to expedite matters. 

A UK Government spokesperson said: "At today's Inter-Ministerial Group for Environment, Food and Rural Affairs, UK Government ministers received a formal request setting out the scope and rationale for a UKIM exemption for the Scottish Government's deposit return scheme. It will now be carefully and fully considered by Ministers at the relevant Whitehall departments."

However a Scottish Government spokesperson said: “The process for excluding the deposit return scheme regulations from the Internal Market Act is well underway, was first proposed in 2021, and has been the subject of discussion with the UK Government for many months.

"We have followed the process for exclusions that was agreed between the UK and the devolved governments, and is available publicly. It does not include a step where a formal request must be made of the UK Government.

“At the Inter-Ministerial Government meeting this week, the Circular Economy Minister called again on the UK Government to provide this clarity urgently.

"At the meeting, UK ministers acknowledged that the Scottish Government has followed at all times the agreed process for securing an exclusion from the Internal Market Act, and we have finally reached the stage where the views of ministers in all four governments are needed before the process can be concluded.

"We expect the UK Government to come to a view as soon as possible, to give industry absolute clarity.”

Scottish Tory MSP Maurice Golden said: “It’s depressingly predictable that, rather than delay their Deposit Return Scheme to put right the huge flaws in it, the SNP-Greens should double down and use the policy to create another constitutional row with the UK Government.

 “Despite the siren warnings of businesses, the hospitality industry and even SNP leadership candidates – not to mention a dire sign-up rate by firms – ministers refuse to see sense.

 “Ploughing ahead with the DRS in its current form is not just pig-headed, it’s reckless. 

“To force businesses to choose between signing up to a scheme that could bankrupt them or to cease trading in Scotland is unforgivable.

“The fact that the ministers are doing so – in a bid to ferment grievance with the UK Government – is further proof that the Nationalist parties will always put their interests before Scotland’s interests.”

Scottish Government sources were adamant that ministers had requested a UKIM exemption for the DRS almost two years ago.

The development came as business leaders warned Nicola Sturgeon the DRS was “destined to fail” unless changes were made, and that pressing ahead with it would be “reckless”.

READ MORE: Thousands of drink producers shun 'disaster' deposit return scheme

CBI Scotland, the Scottish Chambers of Commerce, the Federation of Small Businesses and others sent an open letter to the outgoing First Minister, calling for the plan to be delayed.

The letter – also sent to the three candidates vying to replace Ms Sturgeon as SNP leader and first minister, Humza Yousaf, Kate Forbes and Ash Regan – said businesses backed the principle of the scheme and had spent “precious time and resources” getting ready for it.

But the group, which also includes the Scottish Council for Development and Industry and the Scottish Wholesale Association, said their efforts had “not been matched by ministers and will not deliver a DRS fit for purpose”.

They told the First Minister: “We share the objectives that DRS was set out to deliver, but in its current form, and without change, it is destined to fail.

“We believe we need to delay, review and rethink DRS plans, and give businesses more time to prepare and allow them to sign up for a scheme in which they can have confidence will deliver and without taking on unacceptable liability.”

The groups said Scotland’s economic recovery from Covid was “fragile” and highlighted the impact of inflation and the “pressure hard-pressed businesses and consumers are under”.

The letter said “businesses the length and breadth of Scotland’s communities” did not want DRS to be introduced in August as planned.

Liz Cameron, the director of Scottish Chambers of Commerce, said: “It’s been clear to the business community for some time that operating this poorly designed scheme in its current form is impossible and is adding unnecessary cost pressures on businesses.

“We are not alone in voicing our concerns – all three candidates for the Scottish National Party leadership contest have expressed their reservations too.

“The roll-out of DRS must be delayed and redesigned in partnership with the business community. This is the only route now available to make it fit for purpose and restore business confidence in this scheme.”

Federation of Small Business Scotland policy chair Andrew McRae added: “After years of crises and climbing costs, small businesses don’t need the cost and stress of a chaotic implementation of the DRS adding to their burdens.

“The ambitions of the scheme are laudable but its architects have failed to fully comprehend the implications of its roll-out for the myriad of smaller traders who will struggle to comply.

“It is essential that the Scottish Government stop and take stock of the significant concerns raised by the thousands of operators who want to do their bit but can’t make the scheme work in their business.”