53. The Scottish Government is aligning policy with EU SUPD Article 5, to consider the introduction of market restrictions for the following items:
- Single-use plastic cutlery (forks, knives, spoons, chopsticks).
- Single-use plastic plates.
- Single-use plastic straws.
- Single-use plastic beverage stirrers.
- Single-use plastic balloon sticks.
- Single-use food containers made of expanded polystyrene (EPS) and extruded polystyrene (XPS), including their covers and lids.
- Single-use cups and other beverage containers made of EPS and XPS, including their covers and lids.
54. Given that the Scottish Government has committed to implementing regulations in line with the EU SUPD Article 5, only one policy option is compared to the business-as-usual scenario.
55. Therefore, the two options considered are:
56. Baseline: No policy change – business as usual. The baseline against which the costs and benefits of the introduction and implementation of the market restrictions on the single-use plastic items are evaluated.
57. Option 1: Scottish legislation will restrict the supply and manufacture of the single-use plastic items listed above. Specific exemptions will apply to the restrictions to ensure medical, health, and wellbeing purposes as well as independent living.
4.1 Approach to modelling the policy options
58. The cost-benefit model focuses on the switch from the restricted single-use plastic items to the most-likely alternative single-use products. In line with earlier studies conducted for the Department for Environment, Food and Rural Affairs (Defra), the model also assumes a decrease in overall use of single-use items (plastic and alternative) over time, under both the business-as-usual scenario and Option 1. Part of this decrease is driven by a shift towards reusable products. Owing to limited comparability of the application of reusables as well as a lack of evidence, we have not sought to produce a separate model for reuse.
59. Legislation concerning the restrictions is expected to be laid by the end of 2021. For the purposes of this document we have assumed regulations are laid in November 2021 and come into force on 1 June 2022. To reflect the expected timeline, the model uses 2021 as a base year and assumes a transition period between November 2021 and June 2022, when the restrictions have not yet been implemented.
60. The Scottish Government recognises the uncertainty around the potential impact the United Kingdom Internal Market Act 2020 could have on the effect of these regulations, if lower standards are applied elsewhere in the UK.
61. Due to the uncertainty of the impact of the United Kingdom Internal Market Act 2020 the modelling used in this BRIA assumes that the draft regulations are fully effective.
4.2 Trends in market sales growth of the single-use items (plastics and alternatives)
62. The model includes assumptions regarding the overall growth in market sales of all the single-use items in question: both the single-use plastic items covered by the restrictions and their most-likely alternatives. The assumptions regarding market trends have been informed by previous studies conducted for Defra, which looked at the impacts associated with similar restrictions on selected single-use plastic items. The assumptions around market sales growth in these previous impact assessments incorporated population forecasts specific to England. To account for any differences in population forecasts, the model has been adjusted to account for these differences between the forecasts produced for England and Scotland.
63. The negative growth trends reflected in the assumptions below are driven by rising awareness of the population around the negative effects of single-use items, the desire of businesses to avoid the costs of non-plastic single-use alternative products, and a gradual shift towards reusable products.
64. Research by Resource Futures found that many wholesalers were announcing a switch to plastic-free alternatives at the time the research was conducted. This observed trend was projected to continue, with the assumption that this would be in a linear fashion. This is recognised as a simplified version of the market and in reality, it is likely that switching would occur in a non-linear fashion, however, it is difficult to provide a robust forecast of this. A Low, Central and High scenario approach was therefore taken by Resource Futures. We have adopted a similar approach, using Central figures in the model as follows:
65. For cutlery and plates, the model assumes an annual market growth trend of -1.1 per cent under the baseline, and of -2.1 per cent under Option 1.
66. For balloon sticks, the model assumes an annual market growth trend of -1.1 per cent under the baseline, and an annual change of -3 per cent under Option 1. The faster decline in the use of single-use balloon sticks compared with single-use cutlery and plates reflects the fact that alternatives to plastic balloon sticks are less readily available, and that it is easier to avoid their use.
67. In the case of beverage stirrers and straws, the model assumes a marginal annual increase in sales of 0.16 per cent under the baseline and an annual reduction of -1 per cent under Option 1.
68. Finally, in the case of EPS food containers and EPS cups, the model assumes an increase of 2.9 per cent in the sales of single-use items under both scenarios. This increase is primarily driven by the strong growth in the food service sector itself (reported to be as high as 7 per cent p.a.), as reported in a previous study.
69. Note on the potential short-term impact of the pandemic on demand for single-use products: the model has been adjusted to take into account GDP forecasts published by the Office for Budget Responsibility (OBR), and associated impacts on market growth trends. The adjustments took into account the difference between GDP growth rate forecasts between the time of the previous studies for Defra (2018 and 2019) and the latest GDP growth rate forecasts published by the OBR in November 2020.
70. Taken together, the forecasts imply a significant drop in the annual growth rate of single-use products in 2020, followed by a rebound in growth between 2021-2023. Despite this potential rebound in the short-term, the overall number of single-use items in the market is expected to be lower than it would have been in the absence of the pandemic. The potential impacts associated with the pandemic on market growth rates are not modelled beyond 2023.
4.3 Trends in market shares
71. The market shares of the individual single-use plastic items and their most-likely alternatives were based on previous assessments undertaken in England for the Department for Environment, Food & Rural Affairs (Defra)., In line with views expressed by stakeholders, the model assumes the 2020 market shares of products in England and Scotland to be the same. Annual changes in the market shares of the restricted single-use plastic items were also informed by these previous studies, while incorporating new information on the availability of alternatives.
72. Baseline assumptions on changes in market shares of the restricted single-use plastic items are as follows:
- Single-use plastic cutlery and plates: a 10 percentage point per annum (p.a.) reduction in market shares, capped at 10 per cent of the total market.
- Single-use plastic beverage stirrers and straws: a 10 percentage point p.a. reduction, capped at 1 per cent of the total market.
- Single-use plastic balloon sticks: a 10 percentage point p.a. reduction in market shares, capped at 10 per cent of the total market.
- EPS food containers and EPS cups: a 1 percentage point p.a. reduction.
73. Under Option 1, the model takes into account the timeline for policy announcement (November 2021) and implementation (June 2022), and assumes full compliance with the restrictions once they come into force in June 2022, while factoring in the exemptions for single-use plastic straws and balloon sticks. As a result, market shares for most items are assumed to reduce to 0 per cent by June 2022. A market cap of 1 per cent is assumed for single-use plastic straws, and a cap of 0.1 per cent is assumed for single-use plastic balloon sticks from June 2022 on.
74. During the transition period between November 2021 and June 2022, the model assumes that 20 per cent of the adjustment occurs in the first three months of the transition period and 80 per cent of the adjustment takes place in the final three months. Within each three-month adjustment period it is assumed that market shares adjust in a linear manner.
4.4 Number and weight of items and prices
75. Information from the Strategic Environmental Assessment (SEA) published by the Scottish Government for the same market restrictions was used to calculate the number and weight of single-use plastic and alternative items.
76. The prices of single-use plastic and alternative items in Scotland have been estimated based on a study carried out related to a similar policy change in Wales. This used the averages of prices found on the websites of several wholesalers, which supply UK-wide, and therefore the figures did not need adjusting for the Scottish market. The model assumes that prices remain constant for the period analysed and are calculated exclusive of VAT, as taxes are treated as transfer payments.
4.5 Approach to assessing impacts of policy options
77. The cost-benefit model considers the quantifiable impacts associated with the restrictions. The costs and benefits associated with each impact are analysed over a 10-year period (i.e. between 2022-2031) and a net present value (NPV) is calculated for each impact. The NPV calculations use a discount rate of 3.5 per cent, consistent with HM Treasury Green Book guidance.
4.6 Carbon impacts
78. A decline in the use of the restricted items, coupled with a shift to the most-likely single-use alternative products typically made of wood and paper, has significant implications for carbon emissions at both the production and end-of-life waste management stages. The cost-benefit model evaluates the carbon impacts associated with the baseline and Option 1, using carbon factors published by Zero Waste Scotland.
79. The carbon factors are compiled using a life-cycle approach and therefore encompass production or embodied impacts (regardless of whether production occurs in the UK or abroad), and disposal impacts, including emissions related to collection and transport, and to the waste management process. In addition, the carbon factors include avoided production impacts whereby waste is prevented and recycled (regardless of whether this occurs in the UK or abroad). Zero Waste Scotland reports different carbon factors for different types of materials, as well as for waste generated, and whether it is recycled, composted, landfilled or incinerated at the end-of-life stage. Further, the carbon factors differ depending on whether the waste is generated by households or non-households.
80. To monetise the carbon impacts associated with changes in the carbon footprint and emissions of single-use plastic and alternative products, the model uses carbon prices published in the Green Book by HM Treasury. The Green Book reports both traded and non-traded value for carbon prices, depending on the type of emissions reductions and whether these come from sectors within the EU Emissions Trading System (EU ETS). According to the UK Government's and the European Commission's guidance on the EU ETS, energy-intensive industry sectors including oil refineries, as well as pulp, paper, and cardboard are covered by the scheme. Therefore, the model applies the traded value to calculate the carbon impacts associated with emissions.
4.7 Impacts associated with different end-of-life waste management options
81. The model looks at four different end-of-life management options for the restricted single-use plastic items and their most-likely alternatives, namely:
- Incineration (energy from waste, EfW)
82. Together, these waste management options are assumed to account for around 99 per cent of the waste generated from the relevant single-use plastic and alternative items in a given year in Scotland. The model assumes that the rest of the waste generated (approximately 1 per cent) is littered.
83. To calculate the impacts associated with each of the end-of-life management options above, the cost-benefit model makes assumptions regarding the percentages of waste single-use plastic and alternative items that are landfilled, incinerated, composted or recycled. The model assumes that these percentages are constant over the period analysed. The assumptions have been informed by previous impact assessments conducted for Defra in relation to similar market restrictions on single-use plastic items in England.
84. In the case of recycling, the model deviates from the assumptions used in the Defra studies regarding the percentage of single-use plastic and alternative items that are recycled, on the basis of insights from Zero Waste Scotland into recycling systems in Scotland.
85. Whereas the Defra studies assumed that some of the single-use plastic items within the scope of the restrictions were recycled, the model does not include recycling as an end-of-life waste management option for the single-use plastic items, as none of the items are currently targeted for collection in Scotland.
86. In the case of alternative single-use items, the model assumes that the alternatives to single-use plastic balloon sticks and EPS cups are the only items of which a share is recycled, but only a very small proportion. By contrast, alternatives to single-use plastic plates, cutlery, straws, beverage stirrers and EPS food containers are assumed not to be recycled, since these items are contaminated after use, and often poorly separated even if recycling is viable.
87. Scotland is currently scheduled to introduce a landfill ban on biodegradable municipal waste in 2025. The definition of biodegradable is such that almost all residual waste (of which the single-use plastic items form a part) would be covered. This assessment therefore currently assumes the management route for single-use plastic items disposed of as residual waste post-2025 would be Energy from Waste rather than landfill. We note however that Scottish Government is developing a route map identifying how to best achieve its 2025 waste commitments and optimise waste policy with wider climate goals beyond 2025.
88. To calculate costs or benefits associated with different end-of-life waste management options, the model uses gate fees charged for waste recycling, recovery, treatment and disposal options. These are based on a survey looking at gate fees charged to local authorities in the UK for different waste management options. Given the landfill ban on biodegradable municipal waste that will be effective after 2025, a gate fee of £99 is assumed for all end-of-life waste management options except recycling from that year on.
89. To account for the income local authorities receive for materials provided to recycling facilities, the model uses price indicators for relevant materials. Price indicators for multigrade paper are applied to the two categories of alternative single-use items that are recycled (the cardboard alternatives to balloon sticks and EPS cups). Price data was collected and averaged over a five-year period to smooth the fluctuation in prices.
4.8 Direct and indirect costs of litter
90. Single-use items that are littered by consumers have three distinct impacts associated with them:
- Direct costs associated with the clean-up of items that have been littered.
- Indirect disamenity costs from seeing litter on the ground.
- Indirect costs from the negative effects of plastic pollution.
91. The cost-benefit model accounts for the first two but owing to a lack of data and suitable methodologies, it was not possible to include the indirect costs from the negative effects of plastic pollution, which affect territorial, land-based and marine natural capital. As a result, the benefits of Option 1, in terms of the avoided impacts of plastic pollution, are under-counted.
92. To estimate the direct costs associated with cleaning up litter, the model uses assumptions based on previous work conducted for Defra that around 1 percent of items are littered each year. These assumptions also take account of the different degradation rates involved for different types of materials. An estimate for the costs associated with each tonne of litter clean-up, enforcement and education is provided based on a previous study assessing the scale and costs of littering in Scotland.
93. In terms of the indirect (disamenity) costs of littering, it is assumed that the disamenity costs are perceived on a per-item basis rather than on the basis of the weight (or volume) of the items littered. The model draws on previous work by Zero Waste Scotland in applying an estimate of "willingness to pay", reflecting what the population may be willing to pay for a cleaner environment on a per-item basis. This cost estimate is then combined with the number of single-use items under the baseline and Option 1, to estimate the indirect (disamenity) costs associated with terrestrial and beach litter. As in the case of direct littering costs above, the model takes account of the differences between single-use plastic and alternative items in terms of degradation rates.
94. Estimates for the amount of beach litter attributable to EPS food and drink containers were informed by qualitative and quantitative research. It should be noted that no composition data was available for beach litter which clearly identifies EPS food and drink containers as separate items.
95. Total beach litter composition was informed by analysis of ten years' survey data from the Marine Conservation Society, and the impact assessment for the EU SUPD. From this, it was estimated that 'Polystyrene (small)' and 'Polystyrene foam' accounted for 9% of litter found on beaches. It was estimated that 20% of this was from EPS food and drink containers, given that the majority of EPS is used for consumer goods packaging. This 20% was then split into the individual products on the same ratio as applied to terrestrial litter within the impact assessment. From this, the estimate of the proportion of beach litter attributable to EPS items is as follows in Table 2:
Table 2. EPS beach litter by product
Product / Proportion of total beach litter (%)
- Beverage cups / 0.14
- Takeout containers and to-go boxes / 0.43
- Food trays and chip cones / 0.43
- Pots / 0.05
96. An important factor within this methodology is the comparison of the decomposition rates between EPS items and biodegradable alternatives. This is an important element in distinguishing the benefits gained from the use of alternative items compared to EPS. Non-plastic alternatives to single-use plastic items tend to decompose at a much faster rate, so there will be observable impacts on beach litter from the substitution of plastic to non-plastic single-use items.
4.9 Waste collection costs
97. In addition to the end-of-life waste management and littering costs described above, the cost-benefit model uses a simple approach to provide an estimate for waste collection costs incurred by local authorities. Waste collection costs are modelled for all end-of-life waste management options (including landfill, recycling, composting and EfW), using information on councils' refuse collection services to estimate the approximate cost associated with waste collection.
98. To provide a more robust estimate of the economic impact on waste collection services, the analysis would need to look at the wider costs such as gate rejects and higher gate fees paid for contaminated bins, and costs of disposal at the materials recovery facility (MRF) out gate. This was not possible owing to data constraints.
99. The analysis excludes landfill tax, as this is a form of transfer payment, defined as a redistribution of income through a payment where no goods or services are being paid for. Transfer payments are excluded from cost-benefit analysis under the Green Book methodology.
4.10 Enforcement costs
100. The introduction of the restrictions will lead to enforcement costs for local authorities, such as audits, investigations or legal cases. It is assumed that most enforcement will take place via Trading Standards Scotland and in combination with other duties, and therefore the additional staff time requirements will be low.
101. The cost-benefit model estimates the ongoing costs associated with enforcement using a bottom-up approach, taking into account the administrative and legal services required. The model assumes a light-touch approach to enforcement, and calculates the costs based on 0.1 person per local authority to carry out the associated administrative tasks and 0.05 person per local authority for legal advice.
4.11 Communication costs
102. The introduction of the restrictions will be accompanied by a communications campaign. The cost-benefit model includes an estimate of these costs, based on current plans.
4.12 Costs to consumers and distributors
103. The move away from single-use plastic items to single-use alternatives can, in some cases, imply slightly higher prices, as products made of wood and paper can cost more than single-use plastic items. The cost-benefit model assumes that any increases in the prices of alternative items are passed onto the end consumer (i.e. full transfer of changes in item costs). This is consistent with Defra impact assessments of similar restrictions on single-use plastic items. As noted above (see 'Prices of items'), cost impacts are based on wholesale prices, exclusive of VAT.
104. The extent to which additional costs will be experienced by consumers will depend on the willingness and ability of individual businesses in the supply chain to absorb them. This depends on factors such as profit margins, market positioning and own price elasticities of demand. How noticeable the cost increase is to an individual will also depend on the context of the purchase. Where a small number of items is provided along with a food or drink purchase, the costs to consumers are 'hidden' and any cost increases would be marginal. Cost increases would be more noticeable to consumers buying items in bulk from retailers.
105. There was insufficient data and evidence available to model the split of the additional costs from higher prices between businesses and consumers. However, this does not have any effect on the net NPV results.