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

Rationale for the Proposed Interventions

Need for system-wide approach

Systems thinking is a holistic approach to analysis that focuses on the way that a system's constituent parts interrelate and how systems work over time and within the context of larger systems. This allows the development of a package of measures where "the sum is greater than the parts" i.e., the collective impact of proposed policies and measures is greater than individual implementation. This drives system-wide change which is not possible through a 'cherry picking' of individual measures.

This approach was used to develop appropriate interventions and measures which could address 'broken incentives'; these are the things which make it easier to do the wrong thing with materials and as a result it is more challenging to make progress towards the waste and recycling targets. Figure 9 is an example of the incentives associated with waste prevention. The intention for the Route Map is to identify packages of interventions which will 'fix' these incentives through a systems approach and align behaviours of all actors required with the desired outcome of achieving the waste and recycling targets and delivering a circular economy.

For individual actors, at each stage of the supply chain, incentives were mapped on a per target basis for those waste streams or product categories that were identified as having a substantial contribution to achievement of each of the targets. These were then qualitatively assessed to determine the direction (positive or negative) and strength of their influence on the actor's decision making. By looking at all the positive and negative incentives influencing an actor it is possible to then form a view of how aligned the behaviour of that actor is towards the delivery of the target.

Interventions were identified to introduce new positive incentives to one or many actors to better align those actors to the target. The interventions had one of three aims:

a. to directly reduce the influence of an existing negative incentive,

b. to strengthen the influence of an existing positive incentive, and/or

c. to introduce a new area of influence to the actor.

Policy interventions have been selected within the policy categories to fulfil the function required to influence the identified behaviour, as per the Behaviour Change Wheel model (see figure 9).

Finally, the systems thinking approach was applied to the proposed package of interventions, again per target, to ensure that the incentives carry through the entire supply chain to deliver the desired outcome i.e. doesn't move or create a disincentive either up or down the supply chain. In addition, actors frequently have many incentives that are not concerned with waste prevention or recycling, as waste is one of many considerations. Therefore, a lessening in negative alignment is just as important as a strengthening of positive behaviour. This ensures that the package of interventions proposed in this consultation document "fixes the incentives" and aligns behaviours of all actors required with desired outcome of delivering a circular economy.

Behaviour Change

Almost all Route Map activity requires someone to do something differently. Our focus when we talk about 'individual behaviour change' is on people (householders, service users, or consumers), and not organisations^[33]. We are considering situations where individuals can be encouraged, compelled, or enabled to choose, consciously or unconsciously, to do something in a more environmentally friendly way.

Behaviour change is often equated with communications and engagement activity. This definition is too narrow. Table 1 gives examples of other behaviour change interventions include.

Behaviour change interventions can occur at different scales from the hyper-local to the national and international, and hopefully these scales would be mutually reinforcing. Whilst it is tempting to focus heavily on scalability, this may lead to an over-expectation that a 'one-size fits all' approach exists, or that 'top down' approach is better. Diversity of interventions may be a key feature in reaching a diverse population. This is something we should seek to understand better. There is no doubt multi-method approaches have the strongest track record overall.

Table 1: Example of Behaviour Change Interventions ^[34]:

Intervention	Example
Eliminate individual choice	Ban single use items
Restrict or restructure individual choice	Ban items made with specific materials Make items harder to obtain Change the default option
Fiscal disincentives	Charging, Charging deposits[35] Fines Taxes Price rises
Fiscal incentives	Rewards Returning deposits Rebates Payments Price cuts
Non-fiscal incentives and disincentives	Convenience and inconvenience, such as providing extra services, restricting residual services Improved product quality to compete Fewer materials used in packaging making systems easier to understand, Nudge interventions, peer pressure, social norms, enforcement
Persuasion/discouragement	Communications Community engagement Peer pressure
Provide information	Communications around service use, Direct "ask for a new bin" calls to action Dispelling myths
Changes to the physical/temporal environment	Infrastructure Collection timing Electric charging for cars, better public transport
Changes to the default policy	Opt in vs opt out
Social norms and salience	applying behavioural insight to the policy process, public statements Community conversations Local examples

Our own conceptual framework for considering behaviour change explicitly highlights the individual, social, and material factors that constrain or encourage individual behaviours and provides a framework to consider them in the context of a specific policy or intervention objective^[36].

Finally, it is also useful to distinguish broad types of behaviour changes we might target as some may be more rewarding to deliver than others:

• Very regular behaviour that is part of day-to-day life (e.g. packaging recycling, food shopping, switching off lights, commuting choices).
• Infrequent behaviour, which locks in an ongoing benefit. We see this with energy infrastructure investments (e.g., choosing a new boiler, fitting insulation) where it has been successful. Circular economy service models might also qualify in some contexts (e.g., car sharing models, leasing).
• Infrequent behaviour, with a one-off benefit (e.g., furniture purchase/disposal). For bigger decisions, people may think choices through more consciously (if not, in practice, more "rationally"), but getting the environmental impacts to be part of this decision framework may still be very difficult. An added challenge is that any effort to intervene may need to be done afresh every time, as infrequent behaviour is unlikely to become automatic.

Package Focus

Package 1: Promote responsible production, consumption and reuse

This section sets out in more detail the rationale for the proposed interventions to support progress towards the waste targets as a result of better resource management through waste prevention, reduction, and reuse.

The scale of the challenge

Beyond climate change, material consumption and waste are also the primary driver of nearly every other environmental problem currently faced, from water scarcity to habitat and species loss^[37]. In the last 30 years, global material extraction has increased 60%, and today, humanity's material footprint covers a third of earth's landmass. In Scotland it is estimated that we use on average 18.4 tonnes of resources per person^[38]; UN research has indicated that a sustainable level of consumption is around 6-8 tonnes per person^[39]. Current levels are clearly unsustainable and to help manage resource use globally and ensure equitability we would need to more than half our resource use overall, with even more significant reductions required for some materials. In addition, it is estimated that around four fifths of Scotland's carbon footprint is caused by the production, consumption, and all too often waste, of goods, services, and materials^[40]. This means that despite the considerable carbon saving benefits, recycling can never eliminate the majority of waste carbon impacts. Preventing the need for new products and maximising the life of existing products would bring significant environmental and carbon benefits to Scotland and beyond.

Scotland has recognised the importance of waste prevention, in both Safeguarding Scotland's Resources^[41] and Making Things Last^[42], and a number of waste prevention policies and interventions are in place or planned, including targeting single use plastics, Extended Producer Responsibility and providing direct technical and financial support to organisations operating in this space. However, we know current policy does not go far enough given our net zero ambitions, and the critical role reducing both waste and material consumption can play. Waste and material consumption reduction initiatives should be central to climate policy progress, as recognised in Scotland's Climate Change Plan and in alignment with EU and UN priorities. However, designing interventions and measures to target a reduction in the significant volumes of 'household type wastes' which account for some of the biggest carbon potential, requires an understanding and assessment of the existing incentives and their ability to impact on and influence producer, seller, and buyer behaviour in relation to the consumption and disposal of products. The buyer in this context could be households, businesses, or the public sector.

Factors impacting on consumption behaviour

According to the Reuse Network 10 million household items are sent to landfill every year across the UK^[43]. Of these, around 3 million could be reused by people in need, rising to more than 5 million if small repairs were carried out. However, it is all too often cheaper and/or easier to replace than repair. The quantity and complexity of short-life products around the home and work environment grows each year. In many cases these products are designed and priced in a way that precludes them from being repaired or reused at end of life. Where repair is possible, often the cost and/or availability of a repair service (or parts) or a second-hand replacement means that it is simply easier, more convenient and/or cheaper to purchase a new replacement product instead. However, notably, where products are expensive, as for example with vehicles and more recently, smart phones, repair services arise. Overall, this presents challenges in tackling waste arisings in relation to many common household goods such as furniture, electrical goods, and clothing.

There has been much research into why consumers behave a certain way, and what impacts on their consumption choices; knowing the cause (which can be multiple reasons of varying significance) ensures that measures proposed to drive more sustainable behaviour are appropriate^[44]. Consumers can lack sufficient knowledge of what sustainable choices are available and while they may desire to make the 'right' choice, they are often limited by time and knowledge to assess the 'best' option for them. Convenience can be a significant factor, particularly with time stressed consumers; the pace of adoption for alternative systems such as reuse will depend very much on how easy it is to make the change^[45].

The consumer faces a marketplace with a propensity of choice within many common household product groups and often purchasing choices are primarily price driven. Whilst choice architecture, which describes the presentation of choices to consumers and the impact that presentation has on consumer decision-making, can help end-users adopt, low carbon options, including sustainable consumption^[46], the cost of purchasing a more sustainable product, such as one designed for repair/upgrade (and hence durability and longevity), or accessing a product as a service, can often be considerably higher at point of sale even if the lifetime cost is lower; this can be prohibitive for some consumers.

Producers are not always compelled to design sustainable products. While producers and retailers are, to an extent, incentivised to minimise their own waste arisings and hence costs, a focus on maximising sales can encourage them to drive consumption at an individual level. Tackling waste prevention is therefore a challenge where there is a lack of sufficient incentives in place to ensure that the design and production of products placed on the market facilitates economical viable repair and long-term reuse.

Labour costs and skills shortage present barriers in market development^[47]. Shifting to a greater emphasis on repair and remanufacture is challenging as labour costs are higher in the UK than many of the countries from which we import; reuse and repair services are often operating at small scale and hence are unable to compete on a cost basis with primary production. This is coupled with a recognised skills shortage in terms of repair and remanufacture.

Large scale procurement activities are not placing sustainability at the forefront of purchasing decisions. The weak demand for sustainable products and services in the business-to-business marketplace also has an influence on, and impacts, producers and service providers offer. Developing sustainable products and services requires considerable time and investment, and carries considerable risk, particularly when it involves a step change from an established product or service to something as yet unseen. By identifying target products and services and procuring sustainable solutions, large private sector organisations and public bodies can provide the base-level demand required to give businesses the confidence needed to invest in sustainable innovation. Once proven, these solutions can then generate demand more widely in the private sector, and scale to meet it.

Changing consumption behaviour

When considering where to target interventions and measures there are a number of further considerations. This includes whether there is a degree of 'unavoidable' wastes, such as certain fractions of food waste, and excavation materials from building projects, which are more challenging to prevent, versus those wastes which are 'potentially' avoidable such as surplus food, single use packaging and textiles. In considering our journey to net zero, focussing on the reduction of specific carbon intensive materials such as textiles and plastics should also be considered a priority for targeted interventions. For example, textiles made up just 4% of waste arisings by weight in 2020 but accounted for 32% of the carbon impact of waste^[48].

The 2019 ClimateXChange^[49] evidence review also highlights the need for "a range of prescriptive/regulatory instruments and infrastructure actions". We have already acted in this way to address material pollution from single-use plastic items and may need to consider interventions more widely to achieve change in consumption patterns elsewhere at the speed and scale necessary.

The proliferation of cheap disposable products is a key challenge if we are to reduce consumption. Applying a charge to products which are unnecessary, or which have an environmentally preferable alternative, has long been shown to incentivise more responsible consumption choices, as long as the financial stimulus is set at a level to engage the consumer^[50]. In Scotland we have already successfully introduced the single use carrier bag charge which reduced usage by 80% in the first year^[51] by applying a small charge at the point of purchase. There is scope to extend this approach to other materials to consolidate consumer awareness of consumption, particularly where wider policy measures, such as DRS and EPR, are driving change in product design and use. Research has shown that all ages, genders, and income groups have responded positively to the carrier bag charge by changing their behaviour and there is a suggested "spill over" effect^[52]. We have also conducted research on charging measures through the Expert Panel on Environmental Charges and Other Measures (EPECOM) which recommended introduction of a charge on disposable cups as part of a range of measures to reduce consumption. The Panel noted evidence has shown that a disposable cup charge is more effective in generating a positive behaviour change than an equivalent reusable cup discount. Taking account of EPECOM's recommendations, we have committed to introduce a charge on single-use disposable beverage cups and to establish an Advisory Group to inform implementation plans.

The primary aim of any charges will be to reduce consumption, moving away from single-use consumerism whilst avoiding unnecessary purchases of reusable items which have a longer environmental payback period. It is noted that any measures will need to consider the likelihood of material switching and the whole-life impact of alternatives against the baseline.

It is widely reported that individual consumption patterns are affected by a number of factors, including affordability and accessibility of more or less sustainable choices on markets. Alternative options must provide equal convenience, quality and availability to the linear buy-new options that currently dominate the marketplace. Reducing individual ownership and increasing leasing or subscription business models, will help reduce resource demand, and help shift behaviours and attitudes towards ownership of products. These models have additional benefits in that retained ownership by businesses incentivises upgradeability and repair, as well as clearer routes to improved recycling when products reach their end-of-life. However, at present leasing and subscription business models tend to target specific sectors or markets such as high value, niche products, higher socio-demographic customers, or have restricted reach. There may be higher start-up costs which makes it more difficult to enter the marketplace competitively, and whilst EPR schemes will increasingly incentivise reuse models for select products, more support to encourage greater diversity and innovation in products may be required.

We have already committed to support the growth of sharing libraries over the next three years^[53], however we are interested in considering what other measures are required to further develop and maximise the impact of alternative business models and support their growth.

Significant progress has been made in improving accessibility and raising the profile of reuse opportunities in recent years, specifically as a result of community based operations and collaborations and partnerships between various public sector organisations and associated networks. In addition, specific support tools, such as Revolve certification^[54], have raised standards and ensured enhanced in-store measure are place. To date 120 stores in Scotland have been awarded the Revolve certification, representing around 10% of all third sector and high street charity shops. However, we do not have the evidence to demonstrate the impact of certification on normalising or mainstreaming reuse by providing the consumer with confidence; more work is required in this area to ensure the most appropriate support tools are in place.

In addition, we recognise that international examples of alternative ways of presenting reuse operations could give us a clearer sense of what could be achieved with sufficient planning, collaboration, and clarity of objectives^[55]. Again, the application of similar approaches in Scotland is not fully understood in terms of the potential benefits and contribution to mainstreaming reuse but we recognise the need to work together to continue to explore opportunities.

We recognise that there is a need for further evidence and research to support progress towards more sustainable consumption. The latest IPPC report^[56] details a wide range of research and evidence in relation to consumption behaviour and the changes which can be made as a result of action and interventions, however there is also clear acknowledgement of the limitation of research in some areas and quality of data in terms of its credibility and application. Further specific research into waste prevention activities is required, considering where success has been achieved in eliminating waste and changing behaviour of the local community, and its application in Scotland.

Package 2: Reduce Food Waste

This section sets out in more detail the rationale for the proposed interventions to support progress towards the food waste reduction target.

Factors impacting on progress

Zero Waste Scotland undertook an exercise to review the current actions detailed in the FWRAP and identify updates required to achieve the target. The exercise combined aspects of benefit and logic mapping.

Considering how enablers^[57] can deliver benefits that in turn lead to an objective allows the exploration of why actions are undertaken and how benefits are realised and measured. Combining the two approaches and applying them to the FWRAP target led to a map that details the sequence of benefits that arise from types of enablers that will ultimately result in the FWRAP target but also realise intermediate benefits and objects that are important to other stakeholders.

This analysis of progress towards the existing actions in the Food Waste Reduction Action Plan (FWRAP) revealed the following insights that have helped to inform the interventions and measures proposed in this consultation document, and include:

• The structure and demographics of a sector significantly influence how to achieve the greatest reach and impact within that sector, requiring a differentiated approach; there is no one size fits all solution.
• Although the majority of food waste is generated in the household, individuals are strongly influenced by the wider environment (e.g., how food is marketed, sold, packaged). This influencing role means that other food system stakeholders must be involved in the solution even though they themselves generate smaller volumes of food waste.
• Interventions are inter-dependent, and need to be designed to address systemic change; individual interventions will not achieve sufficient impact to meet the 33% target.
• Embedding sustained change across the system can be considered a 5-stage process: we need to engage with businesses and individuals to raise the issue of food waste; this will then provide the opportunity to raise awareness of the impact of food waste and create intentions to act; the first step in taking action is to measure how much food waste there is and set a target; then we can implement actions that attempt to reduce food waste; and finally, successful actions will result in a reduction in food waste.
• The above process will only be effective if it occurs in an environment that enables action to be taken, otherwise the process stalls at awareness.
• Existing data and systems for capturing data are not sufficient to monitor or assess progress towards the FWRAP.

Mainstreaming food waste prevention behaviours

The review also highlighted that there are very few policy incentives that directly target reducing food waste for businesses or for individuals. This is true for most countries. In the UK messaging has typically focused on food waste as an environmental or food poverty issue. While individuals are aware of food waste as an environmental issue and recognise the need for change at a societal level, this does not appear to resonate in the same way as other environmental issues or always translate into behaviour change at an individual level^[58]. Scottish Government have sought to highlight the importance of food waste by running two phases of a national food waste awareness campaign since 2019^[59]. The campaigns focused on food waste's link to climate change and the best ways households can prevent and reduce food waste, while recycling the food waste they cannot prevent.

Understanding the reason why individuals don't consider food waste an environmental issue, and why awareness does not always translate to action^[60] is fundamental to designing and delivering effective interventions that move beyond traditional awareness campaigns through communications.

While progress has been made to incorporate behaviour change into intervention pilot studies, more work is needed to better understand the existing behaviours and attitudes and other barriers in the food environment that prevent people adopting new behaviours that are aligned with reducing food waste.

Behaviours and attitudes will vary across different groups, as will the knowledge, skills and opportunities required to implement change. We need to understand the composition of the audience, and the common features (e.g., behaviours, attitudes, knowledge, skills, and opportunities) within each segment of the audience^[61]. We then need to design interventions that are most likely to engage each audience segment and provide them with tools that align with the common features of the group^[62].

Applying behaviour change theories to existing behaviours and attitudes can help determine the best ways of initiating the desired behaviour changes, but it is also necessary to provide the environment in which an intention to act can be transformed into action and become a sustained behaviour.

This step-change in approach will require a significant programme of research to understand all the aspects described and develop a body of evidence that can then inform and underpin all other aspects of the FWRAP.

This has to take in to account the current societal and legislative landscape and also work within the situations in which individuals interact with food. This requires an understanding of the motivations and incentives of all the actors in each situation. For example, what are the motivations of a food retailer and how well do these align with the motivations of the individual when purchasing food to be prepared and consumed in the home? What are the motivations of a hospitality business when an individual purchases and consumes food on the premises and do these change when the food is ordered to go? How can producers, manufacturers, retailers, and hospitality influence individuals and vice versa? We need to take a holistic approach to designing interventions that account for all these factors, and we need to invest in research that informs our approach to all aspects of the food waste reduction journey.

Alternative uses of food surplus

Beyond behaviour change, we also need to understand where food surplus and waste is generated across the whole supply chain. We can then optimise the outcomes for the surplus or waste according to the food waste hierarchy and attempt to rebalance a system that produces too much food to accommodate down-stream waste while simultaneously having to support people experiencing food insecurity^[63].

Preventing food waste is always the priority: food businesses should be following the food waste and surplus hierarchy to prevent or reduce food waste. However, food surplus can arise due to many reasons. These include over supply, incorrect labelling, supply chain management issues, inadequate forecasting, and seasonal fluctuations (both weather and demand related)^[64].

Current data on food surplus is sparse, potentially inaccurate, or inconsistent, and may be sensitive and therefore not publicly available. Better food surplus data would help to address this issue and potentially allow for greater volumes of food surplus to be redistributed either for human consumption or, if not suitable, to animal feed before it enters the waste stream. Without monitoring of both food waste and surplus we may not be able to identify potential feedback loops or unintended consequences of food waste prevention actions or assess any improvement in supply chain efficiencies and resilience to extreme events.

If food surplus cannot be eliminated and is still fit for human consumption, then it should be redistributed to humans. Redistribution of food surplus has grown rapidly in recent years with a 65% increase in the tonnage of food fit for human consumption redistributed between 2018 and 2020 across the UK^[65]. This has huge benefits in terms of preventing food from becoming waste. However, this rapid increase puts pressure on infrastructure and human capacity, particularly for the charitable sector.

Covid-19 increased the number of individuals and households who were reliant on food banks^[66] and similar community support mechanisms^[67], and highlighted issues around the logistics of getting high quality surplus food fit for human consumption from producers and retailers to organisations and charities that could distribute the food within communities. The initial increase in food bank usage is clearly linked to the Covid-19 pandemic, and that increase appears to have been sustained during 2021. The cost of living crisis is now also contributing to sustained levels of food insecurity^[68].

We need to undertake research to understand the demand, legal implications, barriers, nature, and geographical distribution of existing services. This would allow us to establish best practice and the most appropriate support to facilitate interactions between producers and distributers of food surplus. It would also ensure our redistribution evolves beyond addressing food insecurity to providing high quality surplus food as an attractive choice for everyone, while also improving efficiency and effectiveness of the redistribution ecosystem in Scotland.

Redistribution to humans, and for animal feed will result in a reduction of food waste, as the food will never be classed as waste, and has the potential to displace food and feed from the supply chain. It is important to recognise that there will always be a component of inedible food waste that is not suitable for human consumption. This could be diverted to animal feed if suitable, but there are biorefining processes that extract components of food surplus and waste that can then be used to create high value materials that would otherwise be made from virgin materials or fossil fuels. This may not directly result in reduced food waste, but it could result in a reduction in overall material consumption and overall waste and displace materials with high carbon costs.

The need for a circular bioeconomy

This highlights the connections between activities to improve redistribution to humans, and circular bioeconomy activities that seek to extract additional value from food surplus before it is used as animal feed, and to convert food surplus and waste to feedstocks for high value bioeconomy processes.

Developing better redistribution infrastructure and legislation, and understanding what technologies are available and how they can be integrated in technology cascades will be crucial to ensuring the system does not create unintended consequences that do not follow the waste hierarchy, as is happening with anaerobic digestion (AD).

Historically, AD has been treated as a renewable energy technology, and benefited from subsidies such as the Feed-in Tariff and Renewable Heat Incentive. These subsidies have seen a large increase in facilities across the UK. Farms and businesses that generate by-products that could provide a feedstock for AD, such as distilling and brewing, have invested heavily in the technology in Scotland. However, recent evidence suggests^[69] that the economic benefits of diverting food surplus to AD are displacing traditional routes to disposal of food waste and surplus. Distillery waste is being diverted from animal feed to AD in Scotland. This has resulted in the importation of animal feed from England, and projections suggest that if the trend continues then feed will have to be imported from abroad. AD is a better outcome for waste than incineration or landfill^[70], but the carbon impacts of importing virgin animal feed from abroad^[71] could outweigh this benefit^[72] and should not be further facilitated without careful consideration of the impacts.

Continuing with the subsidies based on energy production may lock-in AD as the dominant technology, at the expense of new technologies and processes that can extract components from food surplus and waste for high value biorefining processes while still preserving the components that are required for AD. This means designing an environment that has AD as the final stage of processing food waste, with redistribution and bioeconomy/biorefining as the primary and secondary destinations for food waste, respectively, before AD.

There is also a need for technology and logistical infrastructure so that those with a feedstock can supply it to those with the technology to process it and extract maximum value. This is only possible if we fully understand and can track the amount of material that can be diverted to these outcomes, which offer significant environmental benefits over current disposal methods like AD, incineration, or landfill^[73].

Creating an environment that encourages research into new technologies^[74] that can process food surplus and waste and supports the creation of businesses that employ these technologies and process is essential to support the effective and efficient use of the food surplus and waste that cannot be fed to humans or animals and extract the significant value that is contained in it.

The outputs of research need to be supported as quickly as possible to ensure that commercially viable technologies are operationalised by businesses. Businesses also need investment and incentives to take up new technologies through fiscal mechanisms. How quickly the research and technology development can occur will dictate the impact on the 2025 target, but this is likely to have a bigger impact beyond 2025.

Considering all organic materials for the circular bioeconomy, and not just food surplus and waste, would impact on the overall waste reduction target as well as reducing food waste and improving recycling rates for food waste that cannot be prevented or redistributed to humans or to animal feed.

If food surplus and waste is available and technologies are able to process it, then there needs to be infrastructure in place to ensure that materials can be efficiently transported and processed. This will require an understanding of where particular feedstock are being produced and considering localised infrastructure that has the ability to process the feedstock. If the output of that processing is a feedstock for subsequent processes, then the subsequent processes should be either co-located or within the same geographical location to minimise transport.

At present, large amounts of food surplus and waste are transported from across Scotland to large AD facilities in the central belt^[75]. Smaller, localised facilities that can process food surplus and waste with a final AD stage and distribution of the digestate to land improvement could potentially maximise value and minimise transport emissions of the original feedstock and the outputs.

This requires research into the amount and location of: existing feedstocks; availability of processing technologies; matching of feedstocks to processes; optimal design and location of physical infrastructure to transport, store and process the feedstock; and efficient integration with subsequent uses for the processed materials. The benefits of creating a strong circular bioeconomy extend beyond waste reduction. A correctly functioning circular bioeconomy will create green jobs, economic opportunities, and high value materials that can displace fossil fuel-based products. The climate change mitigation opportunities provided by a circular bioeconomy are also considerable, and well aligned with the latest IPCC report^[76].

Supporting Scottish Businesses

There is considerable ongoing work to support food businesses to voluntarily report their food surplus and waste in Scotland through Zero Waste Scotland's activities and, at the UK level, the Food Waste Reduction Roadmap (launched in 2018). Based on the 'Target, Measure, Act' principles, the Roadmap is facilitating voluntary food waste and surplus reporting towards the Courtauld 2025 target of 20% reduction in food waste by 2025 and the UN Sustainable Development Goal (SDG) 12.3 goal of a 50% reduction by 2030. The latest Roadmap progress report shows that 171 UK businesses have implemented 'Target, Measure, Act', 138 businesses have reported their food surplus and waste in confidence to Wrap, and 60 businesses have made the data publicly available^[77]. The combined turnover of the 171 businesses now implementing 'Target, Measure, Act' is around £234bn, representing 56% of the overall turnover for UK food manufacture, retail and hospitality and food service, and includes the UK's large grocery retailers and 155 other businesses. This shows a clear trend among food businesses towards greater measurement and openness, particularly among the large retailers. However, very few Roadmap signatories submit Scotland specific data and some sectors, such as hospitality, are underrepresented.

By 2020, Over 80%⁷⁷ of businesses who committed to the FWRR have provided evidence of implementing Target, Measure, Act, and those that have publicly reported food surplus and waste have delivered a 17% reduction in food waste. This demonstrates that the process of monitoring food waste is effective at reducing food waste, but the current Courtauld 2030 signatories do not cover enough of the food supply change to deliver the reductions needed to meet the 2025 FWRAP target.

In Scotland, Zero Waste Scotland has delivered a Food Waste Reduction Business Support Service to work directly with SMEs to audit and recommend interventions to reduce food waste. Between 2016 and 2020, the Business Support Service identified over £4m cost savings, 15,000 tonnes of food waste savings, 31000 tonnes of CO2eq savings, and almost £2m of potential revenue across ~250 audits. This represents between 5% and 10%^[78] of Scottish SMEs involved in food-related activities. The audits identified potential savings of 15,000 tonnes of food waste, which is 12% of the reduction required from manufacturing and other sectors.

However, the actual implementation rate of audit recommendations is a maximum of 50%. This means that the Support Service has helped SME businesses reduce food waste at a maximum of 1.5%^[79] per year between 2016 and 2020. If a similar level is maintained between 2020 and 2025, then this would result in an additional 7.5% reduction against the required reduction, resulting in SMEs contributing 13% of the required reduction from manufacturing and other sectors by 2025 through direct interventions recommended by Zero Waste Scotland.

SMEs account for between 12% and 22% of all food-related businesses in Scotland, with large businesses between 0.4% and 1.7%. Micro businesses make up the remaining 77% to 88%. We don't know what percentage of the total waste is generated by micro, small, medium and large enterprises, but it is likely that despite a significant majority of food businesses being classed as micro, the bulk of food waste will be generated by medium and large enterprises. In this context, 13% from SMEs is not enough.

Given these issues and Scotland's ambitious food waste reduction target (33% by 2025), the voluntary approach to food waste and surplus reporting is not expected to meet our demands for food waste and surplus data or to drive business behaviour change, and its subsequent benefits, sufficiently.

Considering legislation that requires mandatory reporting of food waste, along with the planned implementation of electronic waste tracking, is a potential solution to the problems associated with lack of Scottish specific data to drive targeted food waste prevention, redistribution, and the circular bioeconomy. The legislation would require careful implementation to encourage positive engagement with food waste recording and reporting and should also be linked to the interventions designed to engage households and members of the public with food waste reduction.

Package 3: Improve Recycling from Households

This section sets out in more detail the rationale for the proposed interventions for improving recycling from households.

Factors driving the current national recycling performance

There are several different factors which impact on recycling performance^[80]. To achieve recycling performance levels of 60% and above most households will have to recycle most wastes most of the time. Evidence from previous waste composition analysis and waste and recycling tonnages reported by SEPA suggests this is not the case currently. The complexity^[81] of short-life household products (e.g food, packaging, paper and card, clothing, electricals) grows each year. A significant portion of household products placed on the market do not have technical or economic options for reuse or recycling^[82].

Household participation in recycling grew significantly from the early 2000's until the middle part of the last decade, as evidenced from improving recycling rates. Participation is reliant on goodwill and a social norm to 'do the right thing', and whilst goodwill has produced good progress in the early years, progress has since plateaued. Other options are required for those not motivated by goodwill alone.

It is usually cheaper and easier for individuals to dispose of waste than to reuse or recycle. Cheaper refers to the time and cost to recycle when compared to disposing in the non-recyclable bin. Recycling requires for example the additional washing of packaging, segregation of food waste in kitchen caddies and temporary storage before collection.

Greater cognitive and physical effort is also required to recycle. We are required to make judgements on each item before they are separated, whereas placing everything in the non-recyclable bin promotes cognitive ease. Ideas and actions that induce a sense of cognitive ease are judged more favourably. Those that induce cognitive strain make us more vigilant and suspicious^[83]. Individuals are expected to be knowledgeable and make relatively complex daily decisions on the fate of wastes they produce; our expectations may be unrealistic for many. Where people do the wrong thing there is currently little or no feedback provided by the waste collector. The findings from a wide range of citizen surveys and data on the contamination of dry recycling collections^[84] would suggest approaches to date have not been particularly effective.

Shared or communal waste and recycling services represent a significant challenge to further improving recycling performance in urban areas^[85]. Service users tend to be more transient, subject to higher levels of multiple deprivation, and subject to physical restrictions for storing recycling prior to collection. Providing high performing services in more complex urban environments is likely to require different approaches (e.g changes to physical infrastructure, more transient populations will require more regular communication)^[86].

Food waste incurs high overall 'costs' of participation due to well-established attitudes and behaviours around hygiene^[87], which is reflected in the relatively poor recycling performance for household food waste. In a high performing system, it needs to be easier and cheaper to reuse or recycle than to dispose of waste, particularly for those waste types where we know current performance is lacking.

There is currently significant variation in recycling performance between local authorities in Scotland. This is reflected in the national household recycling rate calculated and reported by SEPA^[88] which shows widely varying performance between local authorities in Scotland. In 2019, local authority household recycling rates ranged from 17% to 68%, in 2020 between 18% and 58%. Between 2011 and 2019, variation in performance has remained consistently high (27% and above). Significant variation in recycling performance between local authorities is therefore the norm, despite significant increases in the performance of individual local authorities. The diverse nature of Scotland's geography presents very different challenges (e.g islands, remote rural, dense urban) when further improving recycling performance.

Figure 10 plots local authority recycling performance (vertical axis) and proportional circles representing how much household waste is generated by each local authority on a national share basis. Local authorities with lower household recycling performance also tend to manage the largest national shares of household waste. Further improving national recycling performance is therefore disproportionately weighted towards improving the performance of those local authorities.

Household waste services are currently delivered by thirty-two unique organisations, with very different operating contexts. Each organisation must balance a much wider range of local priorities (e.g., social care, education). In previous analysis^[89] a higher level of deprivation (percentage of social grade D&E), the presence of a subscription (paid for) garden waste collection, higher residual waste bin capacity and a lack of food waste collection have all been found to be associated with lower recycling rates.

Most households in Scotland have access to common recycling services, with Scotland's 2012 Waste (Scotland) Regulations placing requirements on Local Authorities to provide a comprehensive recycling service to their householders, and establishing the minimum recycling service.

To build on this, in partnership with the Convention of Scottish Local Authorities (COSLA), the Scottish Government created the voluntary Scottish Charter for Household Recycling^[90], which seeks to deliver more consistent recycling collections across Scotland. It has an associated Code of Practice which provides guidance and best practice to support the design of recycling services and promote reuse. 31 of 32 local authorities have currently signed up to the Charter, and around a third of councils have aligned their services with the guidance provided in its supporting Code of Practice. Through our Programme for Government, we have committed to evaluate the Charter and review its supporting Code of Practice to ensure that it aligns with Scotland's forthcoming deposit return scheme, and reforms to extended producer responsibility (for example, packaging).

To help support alignment with the Charter, and modernise Scotland's recycling infrastructure, in 2021 we launched the Recycling Improvement Fund^[91], a five-year £70 million fund designed to support local authorities to improve recycling and reuse infrastructure. The first investments are funding a range of improvements, including more frequent recycling collections, the extension of food and garden waste collections, new capacity to recycle problematic materials like plastic films, and local service redesigns to align with Scotland's Household Recycling Charter.

Tackling the Current Challenges

In developing the rationale for the proposed interventions for household recycling, we have looked globally to better understand the types of policies and practices that support high-performance.

The implementation plan developed by the European Commission to support the revised waste directives^[92] describes a wide range of policies and practices to support waste prevention and recycling, including the examples below:

• "Promote the use of economic instruments at national level to provide adequate financial incentives to ensure better implementation of the waste hierarchy (in particular, landfill/incineration charges, EPR schemes, direct variable charging schemes)".
• "Expand systems for door-to-door separate collection schemes as soon as possible and undertake pilot projects on separate collection to develop solutions for local circumstances".
• "Introduce and gradually increase charges on landfill/MBT/incineration. Revenues from these charges should be used to support separate collection, awareness raising and the creation of modern infrastructure, focusing on prevention, re-use and recycling".
• "Reform administrative structures and procedures to simplify administration of waste management, e.g. bundle capacities via inter-municipal associations".

In 2019 Zero Waste Scotland and Eunomia carried out detailed qualitative comparative analysis of the policies and practices associated with high household recycling rates^[93]. No single policy or practice was sufficient on its own to fproduce household recycling rates of 65% and above. For those with a 65% household recycling threshold, a stretching local target, comprehensive collections, direct charging for residual waste collections and other incentives to recycle were present in all four cases. Extended producer responsibility schemes and comprehensive communication were in place for three of the four cases over the 65% threshold. The findings suggest that high household recycling performance occurs when a range of complementary measures are in place.

In 2021 we commissioned Eunomia^[94] to look in-depth at the types of policies and practices associated with high recycling performance, focusing on case studies from urban and rural areas. It found that providing as many households as possible with access to a full range of recycling services is a common feature of successful systems; Communal collections should be minimised as far as possible and restricting access to shared containers may be required (e.g swipe cards); Services should be complemented by recycling centres or other provision (e.g mobile recycling centres, especially in dense urban and highly rural areas); Steps should be taken to disincentivise the production of residual waste, for example restricting residual waste capacity by reducing collection frequency or container size, or restricted access to communal bins (e.g swipe cards); Binding targets may be applied to the waste collector and in the case of packaging wastes a performance uplift is often driven by a financial incentive built into extended producer responsibility schemes.

Supporting the desired behaviours

There is no single 'type' of recycling service that will meet the needs of all households in Scotland. A more useful way to approach this topic is to ask how the regular, desirable recycling behaviour can be supported in different contexts. For example, the challenges of supporting effective recycling behaviour in remote rural areas are very different from those in dense urban areas. Examples of sharing good practice in designing and delivering recycling and reuse services in different contexts are readily available^[95].

More recently Zero Waste Scotland has carried out a structured COM-B analysis^[96] of three key recycling behaviours:

• Putting food waste into food bins
• Separating out, rinsing, and putting only the correct items in recycling bins
• Putting recyclable items into recycling bins.

This analysis, which highlighted the importance of the design and operation of recycling services and associated communication activities, will be vital to inform work to boost future recycling rates, along with other key research highlighted in this consultation, and collected through consultation responses. For example, it highlighted that a good recycling service should be reliable and easy to use; with clear, consistent, and joined up communications to make the connection between material and bin.

Use of economic instruments to promote recycling behaviour

Economic instruments such as landfill/incineration charges, EPR schemes, and direct variable charging are established policies in other countries to further incentivise waste prevention and improved recycling^[97].

Scotland is already implementing two such economic instruments, a deposit return scheme for drinks containers and extended producer responsibility schemes for key waste types. Both policies are explicitly based on the idea that the waste producer contributes to the costs of managing those wastes for environmental benefit. Further research is required to better understand the potential application of economic instruments in Scotland.

Regarding charging in Scotland, fourteen local authorities apply a direct charge (typically less than £50 per year) for the collection of garden waste. Many councils also charge for uplift collection of bulky items in Scotland. Charging households to do the 'right thing' could be argued to send a confusing signal on the relative value of recycling.

The Eunomia Review of High Performing Recycling Systems^[98], outlined above, set out the importance of taking steps to disincentivise or reduce residual waste production and collection as part of boosting recycling rates. In other countries this has been achieved in multiple ways, for example through restricting effective weekly residual waste capacity (via smaller bins and/or less frequent collections), enforced volume limits (as in Wales), or other fiscal measures such as direct variable charging^[99].

Package 4: Improve Recycling from Commercial Businesses

This section sets out in more detail the rationale for the proposed interventions for improving recycling from businesses and commercial operations.

Understanding the challenges

All business activity generates a volume of materials that are considered waste by the producer; the choice businesses are making is whether to dispose of the material (to landfill or incineration) or recycle or reuse it. However, we recognise that commercial waste is the least understood part of the waste stream with a very large stakeholder base of over 350,000 businesses operating in Scotland and engaged in a wide variety of activities, including agriculture, forestry and fishing, manufacture of chemicals, plastics and pharmaceuticals, manufacture of food and beverage products, manufacture of wood products, mining and quarrying, power industry, waste management and the water industry.

SEPA estimates that the commercial and industrial recycling rates in Scotland are currently 53% (2018 data)^[100], and waste has steadily reduced year on year with a 22.1% decrease between 2011 and 2018. The changes in commercial waste management are significant and highlight the success of the waste industry in supporting their customers to recycle more and dispose of less. The most significant changes between these periods include:

• Separately collected food waste more than doubling from 123,904 to 329,787 tonnes.^[101]
• An increase in separately collected glass (79%) and plastics (36%).
• Mixed municipal waste nearly halving from 1.35 million to 721,797 tonnes.

Changes in how we use some materials has had a significant impact on the waste requiring management^[102].

Recycling performance in the business and commercial sector is not well understood internationally. There are few comparators for recycling rates and where they exist different methodologies have been used. This is due to several factors including the co-collection of household and commercial materials and the need to make assumptions on the split of the material collected and end-destination.

The clearest opportunity for C&I waste to further contribute to the 'all waste' recycling target is in the segregation of municipal-type commercial wastes, rather than industrial waste; approximately 700,000 tonnes of residual municipal waste is produced, however we do not have any robust compositional data. Assuming a similar composition to residual household waste, 60% of this material could be readily recycled using existing services; as much as 420,000 tonnes. The significant tonnage combined with the source of the material merits further investigation to establish the potential opportunity contained within this material stream.

Better understanding of the composition of commercial waste streams will provide essential insights to as to how we can maximise prevention, reuse and recycling.

It is worth noting that the COVID-19 pandemic had a significant impact on waste generation with some estimates showing reductions in collected C&I waste tonnage of around 50%.^[103] According to SEPA recovery has been a mixed picture with some trade waste collectors continuing to report tonnages less than pre-pandemic levels while others report a return to normal.

Factors impacting on recycling behaviours

In terms of incentives to move up the waste hierarchy, currently, the Waste (Scotland) Regulations, introduced in 2014, place a requirement on producers of waste to separate out their recyclable materials (paper, card, metals, plastic, glass and food). A summary of inspections by SEPA and local authorities following the implementation of the Waste (Scotland) Regulations concluded that 60% of businesses had the correct recycling infrastructure and were using it, 20% were at least attempting to recycle and 20% did not have the necessary infrastructure. There is an opportunity therefore, to optimise recycling collections from this 80% of businesses who have the correct infrastructure or are attempting to recycling, ensuring recycling performance is maximised.

SEPA's inspections of compliance with the regulations highlights those least likely to have a compliant waste service being businesses that tend to have high staff turnovers and can be time and resource poor, such as small independent food businesses. Total waste management costs can be relatively small and as a result do not always incentivise good recycling practices.

Other incentives to recycle more, such as consumer demand creating competition on sustainability grounds and reducing costs of their waste management to increase profitability, are significantly weaker than the drive to maximise profit/sales for businesses. In addition, for the majority of businesses in Scotland their waste management costs will be minimal in comparison to the costs of operating their business, and the variability in the recycling market does not create certainty for waste collectors to significantly incentivise recycling behaviour through differential charging.

As a result, businesses can comply with the regulations but not be making active changes to systems which could drive a change in the composition of their waste and increase recyclability. The waste collectors are ultimately reliant on the goodwill and correct use of the recycling facilities provided to businesses to maximise recycling.

Mismanagement of waste as a consequence of criminal activities has seen a reported increase during COVID-19 pandemic, according to SEPA, with an increase in waste services being advertised via Facebook and other informal channels. Criminals continue to operate in the waste sector in Scotland, undercutting legitimate operators for collections and impacting on performance and progress towards waste targets.

Commercial waste service provision is highly competitive and there may be a tension between downward pressure on operating costs and efforts to maximise recycling performance. High performing services require significant ongoing investment and the certainty to make that investment.

Collection options for difficult to manage but low frequency commercial wastes – lightbulbs, batteries etc. – are limited. Drop off points for business wastes are rare.

There are opportunities to invest in technology (e.g., smart card access containers, the siting of containers underground, fill sensors) that are not being realised in Scotland.

Improving performance

To bring more businesses into compliance and maximise capture of quality materials from all premises requires greater insights to the barriers to participation and optimisation. The potential to co-design commercial waste services is evident, bringing together enabling and support mechanisms to address knowledge gaps and identifying and responding to emerging issues as other policy measures come online, such as EPR schemes.

Businesses can be challenged with the array of commercial waste services available, which can also vary in terms of engagement, awareness raising of optimal practice and enforcement measures taken. The variety of providers, operating different collection infrastructure and uplift times also impacts on the local environment in terms of air quality and emissions from multiple vehicles entering the same area to service different clients with similar waste arisings. Zoning could reduce vehicle movements and optimise efficiency of collections as well as providing a measure of consistency. A single provider in an area also assists enforcement since that provider will be able to monitor participation by all businesses who should be receiving a service.

Zoning has been utilised in a number of locations including Los Angeles, New York, Waregem (Belgium), Barcelona and London to encourage collaboration and reduce local environmental impacts, such as a reduction in local air quality. Analysis by WRAP has suggested that businesses could save up to 40% by collaborating on service procurement^[104]. Collaboration could also improve service consistency and improve recycling performance through optimised efficiency of collections. Commercial waste zoning has not been tested in Scotland, and we do not yet have evidence on the administrative burden to define zones and manage contracts, the impact on waste service providers, implications of reduced competition, and overlap with local authority services, therefore further research is required.

Package 5: Embed Circular Construction Practices

This section sets out in more detail the rationale for the proposed interventions to reduce resource needs, reduce waste, and encourage refurbishment and reuse in construction.

Factors impacting on arisings

Construction and demolition (C&D) accounts for around half of all waste produced in Scotland, with 5.8 million tonnes of construction and demolition waste generated in 2018^[105]. Every year, a relatively small number of sites can be responsible for a significant share of the overall C&D waste arisings, with arisings varying greatly year to year due to differences in construction and wider economic activity. The origin of the waste is often uncertain, with different construction activities (excavation, construction, refurbishment, demolition) and project types (infrastructure, residential or commercial new builds etc.) posing specific waste-related requirements and challenges which can require bespoke interventions and measures to prevent the generation of waste and divert waste from landfill.

Of the 5.8 million tonnes of waste, approximately 70% is recycled although this figure rises to 97%^[106] if soil and stones are excluded as per the reporting under the Waste Framework Directive. With soil as the majority material in this sector it is worth noting that this term covers a wide spectrum of quality, from high value top soil to low value contaminated material requiring disposal.

Soil and stones accounted for 38% of all waste send to landfill in 2018^[107], although some material is used to infill quarry and landfill sites to bring them back into economic use or meet licensing requirements; there is a need for sufficient volumes of the soil and stones waste stream to fulfil closure conditions and ensure infilling of landfill sites and quarries can be completed, otherwise alternative, likely virgin materials will be required for these purposes. However, as infilling of major quarry sites is completed in the coming years, there will be a need to find alternative uses or locations for some of this material.

Use of secondary and recycled aggregate in construction whilst desirable can be much more challenging than using primary aggregate. Primary aggregates can be generated to a consistent output at a location that is convenient to the end user of the material. Sites generating secondary and recycled aggregates for use in the construction sector have an inconsistent input material which leads to a less uniform output material. They are also generally less convenient for the end user and transport costs combined with the potential for a reduced consistency do not incentivise the end user to use secondary material, as their priority is to complete their project to a defined standard. In addition, the cost differential for secondary and recycled aggregates compared to primary aggregates is too small to incentivise their use where less convenient.

The majority of C&D waste arisings could be prevented through better design and handling practices. Despite progress by the sector, poor planning, design and handling practices still exist, leading to unnecessary waste arisings.

There are other factors which impact directly or indirectly on arisings such as a lack of financial incentives to improve performance when operating within very tight margins. There is a lack of demand from clients to do things differently, especially if more sustainable concepts and practices impact on cost and timescales for delivery, although this is starting to be addressed in the National Planning Framework 4, Standard 7, and the Route Map outlines that we will be considering the possibility of mandating 'design for deconstruction' through building standards.

Supporting changes in behaviour^[108]

With the sector exposed to tight margins and a high reliance on public sector clients, the economic viability and cost implications on public spending are important considerations. Regulatory requirements, such as building standards, planning permission and procurement clauses, strongly influence the practices and culture that ultimately determine the amount of waste generated and how it is managed.

It is recognised that soil is an important natural resource, and there are high value uses for some of this material, if well managed^[109]. However, construction activity will continue producing high volumes of low impact low value soils. Finding nearby uses for this material is essential to keeping transport costs low and maximising any carbon savings available. A soil symbiosis service which anticipates large volumes of soil and identifies nearby uses for it (e.g., on another construction site) have been successful in the north of England, France and Canada.

A fundamental principle of the circular economy is to keep materials and products in productive use for as long as possible. This extends to larger products and goods, such as buildings, where structural integrity and compliance with regulations have been maintained. Research shows that extending building life reduces the generation of low-value, high-tonnage construction and demolition waste, and significantly reduces embodied carbon emissions^[110]. However, there is a prevalence of practice where buildings are demolished and downcycled into aggregate when they could be refurbished. It is not clear what incentives and measures would drive prioritisation of refurbishment and further evidence is required. The draft NPF4 requires refurb and reuse (where appropriate), but this will depend on how this is interpreted.

The construction industry has a number of voluntary and mandatory standards in place to ensure efficient, effective and safe working practices^[111]. These include project-based waste reduction and reuse targets or benchmarks, site waste management plans and waste generation reporting at project level. There are numerous examples of best practice which has demonstrated significant impact on waste reduction, reuse and higher value recycling. Detailed sector guidance also exists but is not always followed. Small and medium sized enterprises also face significant barriers to adoption of voluntary practices such as cost, time, and awareness; however small and medium sized enterprises make up the largest share of the sector by some margin^[112]. Site Waste Management Plans would provide a means to evaluate total waste arisings by category, identify opportunities to prevent arisings, evaluate the merits of retrofits and refurbishments and create an audit trail to provide compliance with waste regulation ^[113]. Considering existing practices and mechanisms and exploring the most impactful approach may support progress in this area.

Providing a platform for construction companies to store, reprocess, certify, source and utilise used materials and products could prevent significant waste arisings and divert material to reuse. There are many examples of salvage and reuse of construction materials in the UK and overseas^[114], however activity is often ad hoc and relies on stakeholders to drive the market. The practice remains relatively niche and faces challenges of supply, geography, specifications, and certification. Under current conditions, it is thought unlikely that reuse of construction materials will become commonplace, therefore without intervention the environmental benefits will remain largely unrealised.

Potential for economic instruments

The Scotland Act 2012 devolved, to the Scottish Parliament, the power to tax disposals made to landfill. This power is exercised through the Landfill Tax (Scotland) Act 2014 which provides for the setting of tax rates and bands, qualifying materials, administration and reporting requirements^[115]. The Aggregates Levy is an environmental tax designed to discourage the extraction of virgin aggregate and encourage the recycling of construction and demolition waste. The Scotland Act 2016 gave the Scottish Parliament the power to introduce a devolved aggregates levy. The Scottish Government continues to progress work to introduce the necessary enabling legislation^[116]. Both taxes provide an opportunity to drive better environmental outcomes for Scotland.

The Scottish Landfill Tax has meant residual waste has long been subject to one of the most direct interventions to change incentives to divert waste away from landfill. It comprises two rates - a standard rate and a lower rate for qualifying materials, including inert waste such as soil and stones.^[117] There is a significant difference between the rates (currently £3.15 per tonne at the lower rate, and £98.60 per tonne at the standard rate). Currently, as stated the use of secondary and recycled aggregates faces challenges of quality and location. Construction companies must be confident in the quality of material grades to ensure construction projects meet stringent regulatory requirements. Similarly, the cost of materials and transportation must make economic sense therefore aggregate markets must be close to the construction locations to minimise transport fees for heavy material. At present, primary aggregates have a high confidence of quality and are often closer to the sites required, making them often a cheaper option with less perceived risk.

As with amendment of any economic measures, it is important that the impacts of any change are fully understood to avoid unintended consequences such as worse environmental outcome, disproportionate economic impacts on the construction sector and opportunities for waste crime.

Bonds are another fiscal tool, that 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. There is the potential to further develop the use of bonds, imposing a recycling bond which would require construction projects over a threshold, to post a proportionate monetary value, returnable when specific reuse or recycling performance targets are met. The bond would be returned on completion of the project accompanied by evidence of performance. Further research is required to ensure recycling bonds achieve the objective of greater recycling of materials without having a disproportionate financial impact, administrative burden or monitoring requirements.

Package 6: Minimise the Impact of Disposal

Other packages set out measures that will help to reduce the amount of residual waste produced, recognising that this is ultimately the best way to minimise the impact of residual waste. As Scotland moves to an increasingly circular economy model, we will see reducing amounts of materials going to disposal, with a focus instead on supporting optimised use, reuse and then recycling of materials. Where materials must be disposed of, we want to focus on the best environmental outcome for different material streams.

This section sets out in more detail the rationale for the proposed interventions to minimise the impact of disposal of unavoidable residual waste.

Understanding the challenge

We sent around 2.6 million tonnes of material to landfill in 2020, less than half of what we sent in 2005. The proportion of waste sent to landfill has decreased from 43% in 2011 to 32% in 2018^[118]. This trend has been driven by a number of factors, including increased landfill taxes, a marked shift from landfill to incineration^[119], improved recycling rates and upstream management of waste, and the upcoming ban on sending biodegradable municipal waste (BMW) to landfill.

Nevertheless, achieving the 5% to landfill target set in 2010 represents a significant challenge, since much of the waste we landfill cannot easily be recycled or disposed of by other means. In addition, actions taken to drive tonnage away from landfill to achieve the 5% to landfill target may not align with ambitions to reduce carbon and other environmental impacts in the long term. In particular, the current policy framework for the sector is focused on weight and, therefore, does not account for the carbon impact of materials sent for disposal, either through full life cycle assessment or at end of waste treatment. We recognise there is support for driving the best environmental outcomes by balancing further progress towards the current landfill target with steps to align to our net zero targets.

In reducing the amount of waste sent to landfill, the number of landfill sites across Scotland has decreased. There are now around 41 operational landfill sites compared to 129 in 2005. While there will ultimately be a reduction in the required capacity for residual waste treatment as Scotland moves towards a circular economy, this needs to be a planned reduction to ensure that there is sufficient capacity to treat Scotland's residual waste in a way which minimises environmental impacts while avoiding unintended consequences.

Factors impacting on disposal

The Scottish landfill tax escalator has played a significant and positive role in reducing the volume of waste being sent for disposal since introduction in 1996 and is one of the most direct interventions to divert residual waste away from landfill. An escalator was applied, so the standard tax rate increased from £15 per tonne in 2005 to £98.60 per tonne in 2022. This was effective in making alternatives to landfill more attractive for investment.

However, whilst the Scottish landfill tax has been successful in driving change, further increases in landfill tax alone are likely to be insufficient to influence reductions in carbon emissions of waste management, given the weight based approach to measuring and monitoring residual waste, nor changes in behaviour since individuals and businesses producing the waste rarely experience any direct impacts of increases in disposal cost.

The Waste (Scotland) Regulations 2012 prevent separately collected materials, such as firm plastics, from being incinerated or landfilled. However, as the report on the review of the role of incineration into the waste hierarchy in Scotland^[120] notes, there is still a large proportion of recyclable materials in the residual waste stream^[121].

Driving change

The size of investment required in any residual waste solution requires a stable commercial environment to give investors confidence of a viable and profitable operation, and waste producers/collectors a reliable solution to their residual waste needs. There is a critical need to allow for research, development and innovation in the waste and resources sector, while accounting for the need for medium to long-term disposal contracts to ensure financial viability of necessary treatment infrastructure at the required scale, and the significant changes that will occur across the economy which will influence how waste materials need to be managed, as we drive to net-zero by 2045.

Stakeholders have also raised the need for a more strategic approach to waste infrastructure. The recent independent report into the role of incineration in Scotland's waste hierarchy^{Error! Bookmark not defined.} highlights this and recommends that a more strategic approach to planning and deploying waste collection, reprocessing and management facilities.

The review of the role of incineration into the waste hierarchy in Scotland¹²⁷ concludes that that incineration in a properly regulated and operated facility remains the most appropriate treatment route for residual biogenic and biodegradable municipal waste, especially once everything that can be extracted for recycling has been taken out and where waste prevention and reuse have been maximised.

Evidence suggests that the best residual management for some other materials might well be landfill^[122]. Examples include some contaminated soils, sorting residues^[123] and asbestos. Sorting residues have steadily increased in landfills as more municipal and construction waste is processed to recover useful material rather than being landfilled directly. Very little mixed construction and demolition waste is directly landfilled anymore - a significant change from 10 years ago.

The review into the role of incineration in Scotland's waste hierarchy has commissioned further research into the decarbonisation options for existing residual waste infrastructure, with a focus on incineration. Pending the outcome of this research, the recent report from the independent review suggested that one decarbonisation option is to recover more of the recyclable material from the residual waste stream^[124].

We are aware that the cost of removing material from mixed waste streams could be prohibitive, the secondary markets for such material may be very limited and that there is a balance to be found between material removal and ensuring optimal efficiency of plants. A sector-led plan to reduce fossil carbon sent for incineration could ensure economic and environmental viability, and identification of the measures required to implement the optimum solutions. This work would be strongly aligned with the development of the Residual Waste Plan, building particularly from the long-term policy objectives identified and utilising the research outputs that help assess future arisings and composition.

The importance of making further progress to decarbonise the sector suggests there is a need to consider what additional fiscal measures could be introduced to reduce the carbon emissions associated with disposal of waste. This is particularly true for incineration facilities^[125] and we are working with UK Government to consider the potential expansion of the UK Emissions Trading Scheme to include incineration^[126]. The proposed expansion of the UK ETS could provide an incentive for the development and uptake of decarbonisation technologies or practices to reduce emissions from waste incineration and Energy from Waste, principally by strengthening long-term investment incentives. For example, by enhancing the pre-treatment of waste before it is incinerated to reduce fossil plastic in the waste stream (a costly and intensive process). However, it is important that other fiscal incentives are also considered and that these are considered alongside other measures that are in place, or proposed in this Route Map. There are international examples of such practices that can inform further discussions with industry, such as the co-regulation approach taken by Denmark^[127].