The deposit return scheme (DRS), initially planned for implementation next year, will require shoppers to pay an extra 20p when buying drinks in cans and bottles, with the fee being refunded when they return the empty containers for recycling.
It has been dogged with delays and prior to the Scottish election in May, was criticised by Scottish Green co-leader Lorna Slater for a lack of movement.
Now a minister for the circular economy, Ms Slater told MSPs the scheme was to be delayed again and set no date for its introduction.
She said: “"The global pandemic and Brexit had a major impact on businesses, particularly retailers and those involved in their supply chains and challenges persist today.
"Unfortunately, the very businesses who will be most instrumental in making the DRS operate, including hospitality businesses, small convenience stores and small brewers, were and still are badly affected by the pandemic and the mismanagement of Brexit.
"There have also been unresolved issues such as a lack of clarity from the UK Government on the VAT treatment of deposits, which add unnecessary cost, time delay, and risk to the project."
Ms Slater said the Scottish Government had written to the UK Government asking to remove VAT from deposits, but claimed the Treasury had indicated there was “no route” to doing so, a decision she labelled “deeply disappointing”.
She said she would return to Holyrood with an update on the timescale and schedule for the deposit return scheme “in due course”.
Responding in the chamber, Scottish Conservative MSP Maurice Golden called on the delay to deliver improvements such as offering home collection of deposits.
He also hit out at a lack of transparency over the process.
Mr Golden said: “Deposit return is shrouded in secrecy, with a multi-million pound tender process hidden from the public and this Parliament.
"FOIs won’t work because the SNP used a private company to oversee it.
"We don’t need to see the commercial responses, but will the minister release the brief and specification that has been provided to bidders?”
Scottish Labour’s Mercedes Villalba asked for a date for when a new timescale would be outlined, whether lobbying from industry contributed to the delay, and to confirm the implementation date of 2022 would be met.
Responding, the minister said she would return to Holyrood “as soon as possible” and refused to confirm a clear date for the policy’s implementation.
Ewan MacDonald-Russell, head of policy at the Scottish Retail Consortium, called on the Government to confirm a new start date “swiftly”.
Welcoming the delay, he said there had been “no realistic chance” retailers could have accommodated the scheme alongside the impact of Brexit, Covid-19 and the VAT requirement.
He said: “Retailers will raise a weary eyebrow that after this long-postponed announcement there will be a further delay until they receive clarity and visibility on the launch of the scheme.
"This process has been drawn out to a pretty farcical degree – and needs urgently resolved.”