Digital Waste Tracking: business regulatory impact assessment

2. Purpose and Intended Effect

2.1 Background

6. The Scottish Government is committed to delivering a circular approach to our economy, where we move from a "take, make and dispose" model to one where we value the materials we use. Economic models based on ever-increasing resource extraction and high carbon intensity are simply not sustainable. Embedding circularity within our economy is essential to ensure resilience and sustainability, while supporting economic growth, and tackling climate change.

7. To achieve a more circular economy we must ensure we have the information about what waste is being produced and where it ends up. Around 9.5 million tonnes of waste is produced in Scotland each year^[2], but there is currently no single or comprehensive system to track it. We need to be able to ‘close the loop’ by turning the waste that does end up being produced into a resource.

8. The Scottish Government also wants to support and make the system fairer for those operating legally. At present waste tracking is carried out using largely paper-based record-keeping, making it very difficult to track waste effectively. Waste can be fraudulently reclassified and transferred, or simply be illegally dumped, at which point the paper trail disappears. This makes it difficult to identify and deal with waste crime ranging from fly tipping and deliberate misclassification to illegal waste exports and the operation of illegal waste sites. The cost of flytipping alone to Local Authorities in Scotland has been estimated to be approximately £12.7 million per year^[3], not including the wider costs of waste crime to legitimate industry, the environment, and society.

9. The Scottish Government and the Scottish Environment Protection Agency (SEPA) have been working with the other UK administrations and regulators to develop and introduce a waste tracking system for hazardous waste^[4]. This work followed an amendment made to Directive 2008/98/EC on waste (“the Waste Framework Directive”) to require member states to establish an electronic registry or coordinated registries to record the data on hazardous waste which persons carrying out authorised waste management activities were required to record. Separately, Regulation (EU) 2019/1021 on persistent organic pollutants (“the EU POPs Regulation”) required member states to ensure that ensure the control and traceability of waste containing persistent organic pollutants (POPs) in line with requirements in the Waste Framework Directive on hazardous waste^[5]. The digital waste tracking policy builds on these requirements by extending digital tracking to all waste types, ensuring a single and consistent system that strengthens compliance and support circular economy objectives.

2.2 Regulatory background

10. Currently in Scotland, as the rest of the UK, there is no comprehensive service for tracking waste transactions. Multiple IT services collect specific elements of waste data, but large amounts of data are either not collected, or not collated centrally. The overall picture is of a fragmented set of services that do not ‘talk’ to each other.

11. Legal requirements are focussed on having a written description of the waste that should be transferred along the supply chain when the waste is passed from one holder to another. Handwritten or digital waste descriptions of the waste composition and details of the waste transaction must be accurate and contain all the information the holder is reasonably in a position to provide to ensure the lawful and safe handling, transport, treatment, recovery or disposal of the waste by subsequent holders.

12. Those receiving waste must ensure that the waste matches the written description and that any permit^[6], if applicable, allows the acceptance of such waste. Those operating under a waste exemption must ensure that any waste received does not contravene the exemption^[7] criteria e.g. waste limits or types.

13. The specific legal requirements for the information that must be recorded when waste is moved or transferred differ depending on the type of waste being handled and how the waste is transferred/moved.

• Non-hazardous waste – waste that does not display properties that would classify it as hazardous waste
• Hazardous waste – waste that displays specified properties that might make it more harmful to human health or the environment if not managed appropriately
• “Green List” waste movements – includes types of waste that are considered to pose a low risk to the environment when shipped to EU/OECD and some non-OECD countries for recycling or recovery.

14. It is estimated that each year there are at least 2.1 million notes recording waste movements/transfers issued each year in Scotland^[8] (Table 1), and around 500 million waste transactions each year across the UK^[9].

Non-hazardous waste

15. Legislation already requires that when non-hazardous waste is transferred from one holder to another, an agreed written description of the waste should also be transferred^[12]. This is known as a ‘waste transfer note’ and should include the waste description and code, information about how the waste is contained, details of the parties involved in the transfer, as well as other information specified in the ‘Duty of Care Code of Practice for managing controlled waste’^[13],[14].

16. Waste transfer notes can be completed in several different ways; in paper form, online via the voluntary digital Duty of Care (edoc) service^[15], or by using an operator’s own digital services. These notes do not need to be submitted centrally, unless requested.

17. Where the same type of waste is transferred regularly between the same parties a ‘season ticket’ may be used. A season ticket is a single waste transfer note that covers a series of non-hazardous waste transfers. Businesses are expected to keep a log of individual transfers covered by a season ticket for audit purposes.

18. A waste transfer note is currently not required for non-hazardous waste if the waste holder does not change on the transfer of waste e.g. the waste is moved to other premises belonging to the same business. However, under the Duty of Care Codes of Practice for managing controlled waste businesses are expected to keep a record of internal transfers for audit purposes.

Hazardous waste

19. Waste legislation requires hazardous waste producers, carriers, brokers, dealers, permitted/authorised treatment sites and some exempt waste sites to keep certain records relating to the production, transport and management of hazardous waste^[16]. Currently, moving hazardous waste involves a similar transfer of information to moving non-hazardous waste, albeit with more information required for hazardous waste movements^[17].

20. Details of the waste moved must be recorded on ‘consignment notes’. These must be completed for all movements of hazardous waste including movements from one premise to another within the same business. The only two exceptions where a consignment note is not needed are where domestic hazardous waste (other than asbestos waste) is removed from a domestic household, and waste is imported or exported under international waste shipment controls^[18].

21. Businesses that handle hazardous waste are required to use consignment notes and obtain a hazardous waste code from SEPA to put on their consignment note.

22. Amendments made to the Waste Framework Directive in 2018^[19] require records of hazardous waste movements to be made available to the relevant regulator through a digital registry. Therefore, a new IT service is required to enable businesses to submit records of hazardous waste movements into a central system. Businesses need to digitally record and submit the quantity and nature of materials and products resulting from re-use, recycling, or other recovery of hazardous waste.

23. The EU POPs Regulation also requires member states to apply these requirements, to submit records relating to the production, transport and management of hazardous waste, to waste containing POPs (which may be either hazardous or non-hazardous) ^[20].

“Green List" waste movements (non-hazardous waste that is imported/exported abroad)

24. An ‘Annex VII’ document must be completed and travel with “Green List” waste at all times. This must contain information regarding who has arranged the shipment of the waste, who is transporting it, as well as information about the waste’s description (including required identification codes) and details of where it is being taken. In Scotland Annex VII forms for waste exports must be submitted to SEPA in advance of the movement taking place.

25. The EU is currently developing its own digital waste tracking systems for exports (the Digital Waste Shipment System or DIWASS). The digitalisation of waste shipment procedures is one of the key objectives of the Regulation (EU) 2024/1157 of the European Parliament and of the Council on shipments of waste which was adopted by the EU in April 2024. Under the new EU system operators who are exporting waste to countries within or via the EU will be required to submit information that is currently contained on ‘Annex VII’ from May 2026. This will directly apply to exporters in Northern Ireland and will be available for movements between GB and EU at some point in the future. Between May 2026 and April 2027 Northern Ireland based exporters will need to enter information onto the EU system directly.

26. A single UK-wide DWT system from 2027 will mean uniform collection of information across all four nations, with the possibility of information being shared between the UK and EU systems. This will ensure NI can easily comply with EU requirements and reduce administrative burden for exporters who would otherwise have to deal with two systems.

2.3 Objective and rationale

27. Existing regulations and supporting digital infrastructure do not enable waste to be easily and consistently tracked from the point of production to end fate. 

28. Multiple IT systems collect specific elements of Waste Tracking data^[21], but large amounts of data are either not collected or not collated centrally. Some data are paper-based and other data are captured digitally (Table 2). Some data are managed by private contractors, whilst other data are managed by Government or the regulatory agencies. There are separate services for household waste, commercial waste, hazardous waste and international waste shipments. As government requirements have changed over time, various add-ons and separate databases have been developed in isolation. Therefore, the overall picture is of a fragmented set of systems that do not ‘talk’ to each other.

29. Many of the existing digital services available for businesses to record non-hazardous waste transactions are voluntary. As a result, the use of these services is very low. EDOC (a non-mandatory service for commercial waste transfers) had just over 11,000 registered users when it was discontinued in 2021, most of which were not regular or active users. This compares to the millions of businesses that are estimated to be carrying out non-hazardous waste transactions across the UK.

30. The lack of a central digital service for recording waste movements/transfers presents several problems:

• Up-to-date information is not available to allow the efficient and effective regulation of waste.
• There is opportunity to commit waste crime. Waste can easily be ‘lost’ or deliberately misclassified, and regulators cannot easily gather or interrogate the information needed in order to investigate waste crime.
• There is a lack of reliable information for infrastructure planning and investment.
• Data on waste movements are fragmented across systems, preventing effective sharing between industry, regulators and government and reducing the efficiency of compliance activity. Industry lacks information on products from waste that could be used to reduce raw material costs, for example, and producers cannot easily check how their waste has been treated.
• Policymakers do not have sufficient data to monitor the effectiveness of interventions and identify opportunities to move towards a circular economy.
• It is more difficult and time consuming for producers of waste to comply with their duty of care.

31. In order to move towards a more circular economy, and effectively regulate and manage waste, the DWT system will track waste being produced and where it goes. Data will provide a clearer picture of what materials, products and packaging are moving through the economy, which are being recycled and reused, and how much ends up in landfill, incineration or being exported. This requires the DWT system to capture:

• What the waste is.
• Who produces waste.
• Who is responsible for the waste at any point in the journey (including treatment).
• How the waste is treated.
• Where it ends up, and in what form.
• The description of the recyclate.
• Any products or materials that have been made from waste.

32. There are gaps in our knowledge for all the above, particularly with regards to commercial and industrial wastes, construction and demolition waste, and how waste is treated at a small number of exempt sites^[23].

2.4 Rationale for Intervention

33. Being able to track waste and resources will transform the way that waste is regulated, and provide the information that agencies need to prioritise regulatory activities, tackle waste crime and support a shift to a circular economy.

34. The key objectives of the implementation of a digital waste tracking system are to:

• Integrate and simplify recording of all waste transactions and treatment details – bringing together separate systems covering commercial, household, and hazardous waste and linking this to other waste systems (waste carriers, permitting etc.).
• Improve the quality and accuracy of data on waste transactions by ensuring the right data are captured at each point in the waste chain to meet diverse user needs.
• Realise the full value of the data captured by making it easily accessible and usable (e.g. facilitate strategic decision-making for all parties).
• Realise efficiencies and resource savings and remove risks associated with existing legacy systems.
• Reduce the amount of waste crime committed in the UK.
• Monitor performance against targets.
• Ensure that waste tracking data supports key government policies, strategies and regulatory activities.

Information inefficiencies

35. Tracking the UK’s annual approximate 190Mt of waste^[24] – what the waste is, where it comes from, where it goes to, and what is done to it – is vital to helping businesses, regulators and policy makers understand how they can maximise resource efficiency and support strategic goals.

36. Access to timely information on waste movements would help legitimate businesses to identify opportunities for cost savings and more sustainable routes for their waste. In addition, waste producers are often not confident that they have met the requirements of the duty of care^[25] as, in most cases, they do not know with certainty what has happened to their waste.

37. Current data on waste movements is incomplete, inconsistent, and not shared in real time. The absence of a single, standardised system prevents regulators from accessing accurate, timely information to monitor compliance, plan infrastructure, and evaluate progress towards circular economy goals.

38. Timely information would also allow regulators to prioritise their interventions and make better use of the resources they have – increasing efficiency and effectiveness.

39. The current system reflects a wider coordination failure within the waste sector. Multiple unlinked data systems prevent information from flowing efficiently between waste producers, carriers and regulators, creating gaps in reporting and oversight. Without a unified approach, individual actors lack the information and incentive needed to coordinate data sharing, leading to inefficiencies, and reduced oversight of the waste chain. Where voluntary participation depends on a contribution from all stakeholders, waste companies have limited incentive to comply unless others do the same. Without a mandatory waste tracking system for all, legitimate operators front the costs of participation, whilst illegal and non-compliant operators can free ride on the lack of a centralised system.

40. The information failure and coordination failures occurring in the market result in multiple negative externalities and unfair competition.

41. Digital Waste Tracking will deliver these foundational data and transparency improvements, providing the single, consistent data source needed to support evidence-based regulation and circular economy policy.

Social and Environmental negative externalities

42. Under existing waste regulations there are significant negative externalities arising because of criminal activity in the waste industry. Negative externalities are a market failure, when economic activities give rise to costs that are not reflected in market prices. Externalities in this case consist of the negative environmental impacts, risk to human health, and disamenity effects.

43. Negative externalities stem from disposing of waste in a non-optimal manner (e.g., not recycling, disposing of hazardous waste unsafely and fly-tipping). Operators do this to avoid the private costs associated with the correct disposal of waste, for example, paying landfill tax. However, in doing so, there are costs to society and the environment – including carbon emissions, the release of harmful chemicals, the release of foul odours, the pollution of surface or ground water, noise and dust from vehicle movements or on-site operations, and safety risks from fires.

44. A Waste Tracking system will reduce the amount of ‘waste crime’ that is committed in the UK by reducing the incentive for waste operators to act illegally on the basis that they are more likely to be caught committing crimes. Specifically, mandating that digital records of waste transactions are uploaded into a central system will enable regulators to identify when waste ‘goes missing’ and/or when the description of waste changes. In addition, once waste is added to the system (and is being ‘tracked’), any subsequent omissions in the data trail will raise an alert to the regulator. This intelligence will support regulators to carry out more targeted monitoring of compliance and provide useful evidence to effectively enforce against criminal activity.

45. Being able to track timely data on waste movements to regulated sites would mean that interventions to prevent waste crime could be proactive, rather than reactive. For example, when a site receives waste that it is not permitted to accept, or is nearing its maximum capacity, regulators could respond accordingly. Data on site activities is currently submitted to the agencies in quarterly returns – potentially up to three months after a given waste movement – so little value can be extracted from the available information.

46. The Independent Serious and Organised Waste Crime Review in England^[26] highlighted that the lack of digital record-keeping in the waste industry is frequently exploited by organised criminals, as it provides ample opportunity to hide evidence of the systematic mishandling of waste. This report recommended that to better address the problems we face, mandatory electronic (digital) tracking of waste should be introduced at the earliest opportunity.

Economic inefficiencies

47. Not only do illegal operators directly generate negative externalities, they also compromise fair competition and impede resource efficiency by undercutting compliant businesses that seek to recycle or recover resources and feed them back into the economy. The main economic costs are lost business revenues to the legitimate waste sector (which can hinder investment and employment opportunities), loss of taxation that would have been paid by businesses operating legitimately, and costs to the environment from the non-optimal handling of resources. In 2018/19, it was estimated that criminal activity related to waste management cost England £924m^[27]; an estimate is not available for Scotland.

Enabling future policy

48. As a large-scale digital transformation programme, a portion of the value of DWT derives from improvements in capability that improved data will enable for future government policies, government functions and market actors. DWT is a foundational enabler, provided underlying digital, data and system infrastructure required for a wide range of current and future waste, environmental and regulatory reforms to function effectively. These enabling benefits are critical to delivering long-term value but cannot be easily quantified or monetised.