Biffa Sues Scottish Government for £55M Over Failed Recycling Scheme

Waste management firm Biffa launches £55m legal action against the Scottish government over the failed Deposit Return Scheme. Biffa seeks compensation for losses incurred after investing heavily in preparing for the scrapped 10-year contract.

author-image
Aqsa Younas Rana
New Update
Biffa Sues Scottish Government for £55M Over Failed Recycling Scheme

Biffa Sues Scottish Government for £55M Over Failed Recycling Scheme

Waste management firm Biffa has launched a £55 million legal action against the Scottish government over the failed Deposit Return Scheme (DRS) for bottles and cans. The company is seeking compensation for losses incurred after investing heavily in preparing for a 10-year contract to collect all recycled containers across Scotland.

The DRS, which aimed to boost recycling by charging a 20p deposit on every drinks container, was scrapped in June 2023 following a dispute with the UK government. Biffa claims former Circular Economy minister Lorna Slater failed to disclose possible intervention by Westminster, which wants to launch a UK-wide scheme delayed until at least late 2027.

Why this matters: The collapse of the Scottish DRS has significant implications for the country's recycling ambitions and could set a precedent for future environmental initiatives. The outcome of this legal battle may also influence the dynamics of cooperation between the Scottish and UK governments on environmental issues.

In its legal action, Biffa states that the Scottish government "made no reference to any outstanding need to seek UK Internal Market Act approval" for the scheme. The company invested £55 million in vehicles and equipment, relying on assurances from Slater that the DRS would proceed. Biffa is now seeking to recoup its initial outlay as well as lost profits, which could exceed £100 million over the contract's duration.

A Biffa spokeswoman confirmed the legal action, stating, "We can confirm we are taking legal action to seek appropriate compensation for the losses Biffa has incurred." The Scottish government declined to comment on the ongoing litigation. Other companies, including Irn-Bru maker AG Barr and scheme administrator Circularity Scotland, have also suffered considerable losses due to the DRS cancellation and may pursue similar legal action.

The collapse of the Scottish DRS has dealt a significant blow to the country's recycling ambitions and left companies like Biffa facing substantial financial losses. As the legal battle unfolds, it remains to be seen whether the Scottish government will be held liable for the scheme's failure and the costs incurred by participating firms. The outcome could have major implications for future recycling initiatives and cooperation between the Scottish and UK governments on environmental issues.

Key Takeaways

  • Biffa launches £55m legal action against Scottish government over failed Deposit Return Scheme.
  • Company seeks compensation for losses after investing in 10-year recycling contract.
  • Scottish government scrapped DRS in June 2023 due to UK government dispute.
  • Biffa claims former minister Lorna Slater failed to disclose UK government intervention.
  • Outcome may impact future environmental initiatives and cooperation between governments.