Delivering Scotland's circular economy - route map to 2025 and beyond: consultation

Package 5: Embed circular construction practices

Embed circular construction practices to reduce resource needs, reduce waste and carbon, and encourage refurbishment and reuse.

Current actions and commitments

• Introduce requirements through the National Planning Framework 4 to encourage developers to minimise waste and carbon intensity in construction projects.
• Promote The Net Zero Public Sector Buildings Standard, which is a voluntary standard to support public bodies to meet their net zero commitments.
• Support the Construction Scotland Innovation Centre.

Proposed new actions:

• Work with industry to accelerate the adoption of best practice standards.
• Investigate options to incentivise refurbishment of buildings.
• Coordinate a Scottish Programme for Reuse of Construction Materials and Assets.
• Investigate the potential use of recycling bonds to divert material from landfill.
• Consider how devolved taxes can incentivise the use of secondary aggregates and support circular economy practices.
• Work with industry to identify ways to reduce soil and stones going to landfill.
• Facilitate the development of a soil symbiosis programme.

Focus of this package

Construction and demolition accounts for around half of all waste produced in Scotland.^[92] Construction and demolition waste is largely soil excavations from housing and infrastructure projects as well as bricks, tiles and concrete from demolition. Scotland has met the European Union target of 70% recycling and reuse of construction and demolition waste by 2020 every year since 2011 and latest data suggests a recycling rate of 97% in 2018.^[93]

It will be almost impossible to meet our target to reduce waste by 15% without accelerating action to reduce waste from construction and demolition. We have already taken action to move towards more circular practices^[94][95] and there is significant potential to build on this to deliver transformational change across the sector. Reducing construction waste would also contribute to our target to send a maximum 5% of all waste to landfill.

What we want to achieve

We want to transform construction practices by incentivising approaches that use fewer resources, make the most of existing buildings and materials, and divert waste from landfill. We want to increase the value of recycled materials, including by identifying high value reuse and recycling routes for high-tonnage materials such as soil and stones. We want to collaborate closely with industry to identify barriers to change, drive innovation, and accelerate adoption of best practice.

The measures proposed in this package are designed to:

• Improve collaboration between Government and industry

Any policies designed to transform construction practice will require close collaboration between Government, public bodies and industry to understand how interventions will work in practice and mitigate any unintended consequences.

• Incentivise sustainable construction practices

The construction sector is exposed to tight margins and a high reliance on public sector clients. Many practices that reduce waste or increase reuse and recycling have cost implications that make them less economically viable compared to less sustainable alternatives, though there are also savings associated with reduced waste. Some construction practises can also be designed to minimise waste or reduce the volume of waste that needs to be reprocessed and recycled.

• Promote best practice

Regulatory requirements such as building standards, planning permission and procurement clauses have been effective in changing behaviour across the sector. However, voluntary standards also strongly influence the practices and culture that determine how waste is generated and how it is managed.^[96]

• Improve our understanding of how and where waste is generated.

Different construction activities (excavation, construction, refurbishment, demolition) and project types (infrastructure, residential or commercial new builds etc.) generate very different types of waste. Understanding these differences will help us design bespoke interventions to prevent the generation of waste and divert waste from landfill.

Where we are now

In 2018 the construction and demolition sector generated 5.8 million tonnes of construction and demolition waste.^[97] There has been no significant trend since 2011, and waste varies greatly year to year due to differences in construction and wider economic activity – as low as 3.7 million tonnes in 2012 and high as 5.8 million tonnes in 2018.^[98] Variation in construction and demolition waste is the main factor determining whether we achieve our 15% waste reduction target in any given year.

Around 70% of all construction waste is soil and stones. While soil and stones have a low carbon impact, they are one of the largest contributors to our current weight based targets. In 2018, 70% of soils were recycled, but soil and stones still accounted for 38% of all waste sent to landfill.^[99] There are a range of uses for this material, including infill for quarry and landfill sites, though this is still classified as landfilling in some cases.

The remaining 30% of construction and demolition waste includes bricks, concrete, metals, wood and other materials, as well as packaging. 97% of this material was recycled in 2018.^[100] This high recycling rate offers limited scope for further improvement. However, there is potential to increase the value of recycled material, for example by using recycled aggregates in high-performance structural concrete or for engineering purposes in landscaping.

What we have done

The Net Zero Public Sector Buildings Standard is a voluntary standard to support public bodies to meet their net zero commitments. Objective 2 includes a benchmark for embodied carbon with voluntary reporting.^[101]

The Scottish Construction Leadership Forum's Net Zero Group is working to embed net zero practices including identifying solutions to reduce waste, operational emissions and embodied carbon, and to support the domestic construction supply chain and sustainable materials.^[102]

The Circular Economy Investment Fund^[103] supports a range of sustainable construction solutions.

A number of other initiatives are underway across industry and key partners[1], including:

• Historic Environment Scotland's Carbon Calculator for Sustainable Procurement of Sandstone.^[104]
• Research on carbon impact of retrofitting pre-1919 dwellings.^[105]
• Development of a Sustainable Value Framework tool.
• Supply Chain Sustainability School's guidance on sustainable retrofitting.^[106]
• Architecture & Design Scotland's web platform for sustainable building materials.^[107]
• Scottish Government's Procurement Guidance for Construction.^[108]
• Construction Scotland Innovation Centre's research and funding.^{[109],[110],[111],[112]}

What we are already doing

[From 2022]

Our draft National Planning Framework 4 (NPF4) will help ensure we make best use of our assets and infrastructure to support emissions reduction. Through this framework, we are updating our planning policies to reflect the opportunities that arise from the shift towards a circular economy. Planning can support development which better reflects the waste hierarchy, prioritising the reduction and reuse of materials, and facilitating the infrastructure we need to make this possible.

[From 2022]

Skills Development Scotland are developing The Climate Emergency Skills Action Plan^[113] which includes the Circular Economy Sustainable Retrofit Training Programme.

[From 2023]

We will consider the possibility of mandating 'design for deconstruction' through building standards. This is in line with the Climate Assembly recommendation to "Introduce appropriate legislation that requires all new buildings to be designed from the outset using techniques that enable demountability, disassembly, material recycling and reuse at end of life".^[114]

What we are proposing to do

[Do]

1. We will work with industry to accelerate the adoption of best practice standards and explore options for mandatory compliance.

The construction industry has a number of voluntary and mandatory standards in place to ensure efficient, effective and safe working practices,^[115] and industry-led groups such as the Construction Industry Research and Information Association (CIRIA) and the Scottish Infrastructure Circular Economy Forum (SICEF) act as platforms for engagement and knowledge sharing. However, while detailed guidance exists, it is not always followed. Small and medium sized enterprises also face significant barriers to adoption of voluntary practices such as cost, time, and awareness.

We propose to review existing practices and work with industry to understand the opportunities and requirements for successful adoption and compliance. We will develop a strategic plan for any new measures or standards taken forward, and take a phased approach implementation from 2023, based on material type, business or project size. Whilst we believe that a significant impact can be achieved on a voluntary basis, we will also explore options for mandatory compliance.

[Investigate]

2. We will investigate options to incentivise refurbishment of buildings by 2023.

Extending building life reduces the generation of low-value, high-tonnage construction and demolition waste, and significantly reduces embodied carbon emissions.^[116] However, it remains common practice for existing buildings to be demolished and rebuilt, rather than refurbished.

We propose to research the potential incentives for refurbishment, including changes to VAT, public procurement and planning requirements. We recognise that some options, notably changes to VAT, are reserved and would require long implementation timelines. Should we identify any new policy measures, we will work with industry to gauge feasibility, cost and implementation needs.

[Develop]

3. We will coordinate a Scottish Programme for Reuse of Construction Materials and Assets by 2025

We propose to coordinate the development of a Scottish Programme for Reuse of Construction Materials, in order to provide a platform for construction companies to source used materials.^[117] Whilst many examples of salvage and reuse of construction materials exist in the UK and overseas,^[118] activity is often ad hoc and relies on stakeholders to drive the market. The practice remains relatively niche and faces challenges of supply, geography and specifications.

A Scottish Programme for Reuse of Construction Materials would provide a coordinated approach to expanding reuse opportunities and help build market confidence. The programme could also deliver coordinated investment in research, development, training and upskilling activities.

If this measure is taken forward, we will launch an industry consultation on expanding salvage and reuse, as a first step. We will develop a phased plan for implementing the programme by 2025, identifying in-scope sectors, materials and construction life-cycle stages.

[Investigate]

4. We will investigate the potential use of recycling bonds to divert material from landfill.

Recycling bonds require an upfront monetary payment that is returned when specific reuse or recycling performance targets are met. Bonds are commonly used in the construction industry to protect against poor contractor performance or non-competition, guard against default of the company, secure use of plant or materials stored off-site, or provide for dispute resolution.

We propose to investigate whether recycling bonds could be used to increase recycling performance and quality, and to divert material from landfill. If this measure is taken forward, we will begin by piloting a recycling bond by 2024 for soil and stones with a small number of partner organisations.

[Investigate]

5. We will consider how devolved taxes can incentivise the use of secondary aggregates and support circular economy practices.

The Scotland Act 2016 provided legislative powers for the introduction of a devolved Aggregates Levy in Scotland. Following consultation, we intend to introduce the necessary legislation in the current session of the Scottish Parliament.

The Scottish Government published research reviewing, modelling, and analysing illustrative options for a Scotland-specific Aggregates Levy in 2020.^[119] This research showed that the impacts of the Aggregates Levy and Landfill Tax are complementary. We will therefore consider how both taxes can be used together to incentivise the use of secondary aggregates and support circular economy practices.

[Develop]

6. We will work with industry to identify ways to reduce soil and stones going to landfill by 2023.

We propose to provide bespoke support to reduce soil and stones waste, and find alternative uses for waste that is unavoidable. Soil is an important natural resource, and there are high value uses for some of this material, if well managed.^[120] If this measure is taken forward, we will assess the regulatory, financial, geographic, and time-dependent barriers, and identify ways to address these wherever possible. We will work with industry and SEPA to understand availability, quality, reliability, and storage needs, to identify upcoming projects that will generate large quantities of soil and stones, and to consider reuse applications which are economically viable and environmentally beneficial.

[Develop]

7. We will facilitate the development of a soil symbiosis programme by 2025.

We propose to investigate the feasibility of a formal soil symbiosis programme to divert soil from landfill. The programme would seek to establish an industry-owned platform^[121] to communicate excavation types, volumes and timings so that material can be used in other structural projects.^[122] If feasible, we will develop and detail a full implementation plan for the programme by 2025.

The design of any programme would be informed by the actions identified with industry (measure 1). We will explore the merits of voluntary and mandatory use of the programme, any threshold criteria for required participation and other policy measures that can support diversion from landfill such as procurement requirements. If successful, this approach could be expanded to other material streams.

Consultation questions

Question 9. To what extent do you agree with the measures proposed in this package to embed circular construction practices? Please provide evidence to support your answer if possible.

[Strongly agree / Agree / Neither agree nor disagree / Disagree / Strongly disagree / Not answered]

Question 10. Are there any further measures that you would like to see included in the Route Map to embed circular construction practices?