Draft circular economy strategy: consultation

4. Priority Sectors

We have identified five priority sectors, which will be the focus of our policy development. This is based on international evidence, a wide range of data sources and the criteria in the Circular Economy (Scotland) Act 2024. The plans and priorities for these sectors are set out in this section and build on the positive actions already set out in the Circular Economy and Waste Route Map. The five sectors are -

1. The Built Environment

2. Net Zero Energy Infrastructure

3. Textiles

4. Transport

5. The Food System

Roadmaps

For four of the priority sectors, we will work in partnership with stakeholders to develop roadmaps to improve circularity. Transport, as it is a key sector within the forthcoming Climate Change Plan, will not have a separate roadmap but will involve close working with the sector and stakeholders. Roadmaps will identify sector-specific conditions, barriers, and opportunities to accelerate circularity. They will also outline interventions to influence the baseline economic conditions, provide additional incentives, and/or remove barriers for greater adoption of circular economy practices.

Our aim is to complete these roadmaps within a year of the final strategy publication and deliver interventions over a 5-year period. Roadmap development will be led by Zero Waste Scotland, who will identify those best placed to deliver the interventions.

4.1 The Built Environment

The built environment encompasses the human-made physical surroundings where people live, work, and interact. It plays a pivotal role in shaping social, economic and environmental outcomes. As one of the largest consumers of resources and contributors to waste, the construction sector is particularly critical in shaping a resource-efficient future.

A more circular economy provides new opportunities for the sector, with the potential to source goods and services closer to home and reduce reliance on global supply chains, reducing emissions and opening up jobs and opportunities for people in Scotland.

Priority: Work with the sector to develop a roadmap

Adoption of low carbon materials and circular economy practices can face barriers such as lack of confidence, less established supply chains and higher prices. Roadmap development for this sector will focus on the conditions needed for businesses to adopt a greater range of circular economy practices and unlock economic opportunities.

Priority: Promote the adoption of lifecycle assessments for buildings

Embodied carbon is the total greenhouse gas (GHG) emissions generated to produce a built asset, including emissions that result from raw material extraction, product manufacture, transportation, construction, use and maintenance, and end-of-life (demolition). For new buildings, this can account for as much as 70% of a building’s total carbon emissions over its lifecycle.^[14]

We are aiming to reduce embodied carbon in the built environment through:

• the investment hierarchy in the Infrastructure Investment Plan,^[15] which promotes maximising the useful life of existing assets, or repurposing or co-locating existing assets, before creating new buildings;
• National Planning Framework 4, which requires development proposals to be “sited and designed to minimise lifecycle greenhouse gas emissions as far as possible”, which can encourage use of low carbon materials;
• planning guidance, which supports consideration of embodied carbon by promoting ways to assess whole life carbon impacts;^[16]
• the net zero public sector building standard,^[17] which helps public bodies meet their net zero commitments.

Priority: Increase the reuse of construction materials

The sector has made good progress to reduce waste and increase recycling rates^[18] but there is a need to promote activity further up the waste hierarchy.

Our priority is to deliver the Circular Economy and Waste Route Map circular construction actions, including the European CirCoFin project,^[19] which is developing plans for a regional reuse hub for construction materials and a national roll out plan to maximise coverage. The project will also include consideration of the role of these hubs in reprocessing and recertifying products and materials, addressing some of the barriers to availability of materials.

4.2 Net Zero Energy Infrastructure

Net Zero Energy Infrastructure is the physical and technical/digital facilities that underpin the energy sector’s transition to net zero. Embedding circular economy practices within the energy transition will reduce emissions associated with infrastructure design and deployment, enhance the strength of local supply chains; and reduce dependence on international supply chains for the supply of essential materials such as critical raw materials. In line with the Green Industrial Strategy, there are also significant economic opportunities associated with capturing the value of resources from decommissioned oil and gas facilities as well as wind turbines.^[20] For example, refurbishment and reuse options could generate significantly more revenue than traditional recycling or disposal: potentially £230,000 cost recovery for a 3MW turbine through the reuse of components^[21].

Priority: Work with the relevant sectors to develop a roadmap for increasing circularity in net zero energy infrastructure

Companies operating in both the operation of energy sector assets and their supply chains are already doing considerable work to further the adoption of circular economy practices. Roadmap development for this sector will build on this work and address the underlying conditions that impact business decisions about circularity, leveraging industry expertise to adopt new business models and unlock investment.

Priority: Maximise the role of circularity for critical raw materials in Scotland

There is growing demand for the critical raw materials required to support our energy transition which is putting pressure on supply. Scaling up the circular economy is one way to support economic and supply chain resilience. This is a significant opportunity for Scotland, as highlighted in the Waste Reprocessing Infrastructure in Scotland report.

We will commission research to better understand Scotland’s exposure to supply chain risks for renewable and net zero technologies. This will evaluate the critical raw materials value chain and identify areas of comparative advantage that can support national and regional net zero ambitions by promoting new business opportunities to keep valuable materials in use for as long as possible.

4.3 Textiles

Textiles are part of a complex, global supply chain which places increasing pressure on both resource production and end-of-life management.^[22]

Imported textiles, particularly those related to fast-fashion, can be of poor quality, which limits reuse and recycling options. While there have been long-established international routes for the UK’s used textiles, for example export to Africa, these are now often at capacity, leaving little option other than to dispose of textiles as waste. This brings additional disposal costs and loss of potential value, as well as harmful conditions to communities internationally if waste is exported.

Textiles are a global commodity and gaining circularity across this sector will require embracing circular economy practices across all actors in the supply chain, through to citizens and eventual end of life material capture instead of waste management.

Textiles also feature within the product stewardship section.

Priority: Work with the sector to develop a roadmap

The aim of a roadmap for textiles is to build an economic system that is designed for reuse and repair, and enables industry to identify mechanisms for growth without environmental, social or economic harm.

Priority: Align with the EU strategy for sustainable and circular textiles, where appropriate

The EU's textiles strategy^[23] includes increasing the repairability of textiles by embedding the ‘right to repair’, setting eco-design and durability standards, introducing minimum recycled content standards, developing digital product passports to provide clear information and transparency, and restricting the exports of textile waste. From July 2026, the EU’s Ecodesign for Sustainable Products Regulation will introduce a direct ban on the destruction of textiles and footwear by manufacturers, importers and distributors.

We will seek alignment with the EU where it makes sense to do so, including developing a producer responsibility approach to textiles (see product stewardship section) and measures to address the disposal of unsold consumer goods (which could include textiles) as set out in the Circular Economy and Waste Route Map. We will work with the other governments in the UK to develop a coordinated approach where appropriate.

Priority: Improve management of post-consumer textiles

Textiles are not currently collected at the kerbside by any local authority in Scotland. We have consulted on whether to make kerbside collection of textiles a mandatory service and are currently considering the responses.^[24]

We will use the results of the consultation to consider whether changes to the way textiles are handled would be desirable and practical and to inform the development of the new household recycling Code of Practice, a priority action within our Circular Economy and Waste Route Map. We will also consider measures that support actions higher up the waste hierarchy to improve overall management of post-consumer textiles.

Priority: Support sustainable alternatives to fast-fashion

Behaviour change is an important part of countering the unsustainable way we consume textiles. We will continue to support work by Zero Waste Scotland to raise awareness about the environmental impact of textile waste, and to encourage and promote textile repair.^[25]

We will also consider the contribution of Scotland’s rural economy to sustainable clothing materials, such as hemp or wool.

4.4 Transport

Transport underpins all aspects of our everyday lives, from where we work, to the goods and services we consume. Transport is Scotland’s largest source of net emissions, and requires significant quantities of carbon intensive and critical raw materials.

Transport is a key sectoral focus in Scotland’s Climate Change Plan. Reducing emissions will require a shift in technology towards electric vehicles, and behaviour changes towards more sustainable travel choices. For that underlying shift in technology to be sustainable, we need to ensure that the principles of circularity are embedded in this transition.

Currently, most critical materials required for electric vehicles (EVs) are imported from virgin sources abroad. With international demand for these materials growing, retaining and recycling these materials will increase the resilience of supply chains and help to reduce the negative impact extraction can have on communities at home and abroad.

Priority: Improve circularity of passenger and light goods vehicles

Improving circularity in the transport sector requires change to vehicle design, maintenance and treatment at end of life. The EU has proposed new regulations to improve vehicle circularity including design and treatment of end-of life vehicles.^[26] We will look to align with such regulations where we can, which will require working on a four-nations basis to ensure a joined-up approach. We will also work with the UK Government on reserved policies such as waste shipment regulations (which could encourage domestic recycling of materials from end-of-life vehicles that are currently exported).

Priority: Increase EV battery repurposing, recycling and material reprocessing

Batteries contain numerous critical raw materials that can be recycled at the end of their life.

However, improper storage and disposal of batteries can also have damaging environmental impacts and the battery reprocessing sector faces various challenges, including high energy and insurance costs, and fires at battery storage facilities.

In 2023, the EU’s Batteries Regulation (EUBR) came into force,^[27] setting out requirements for eco-design, such as minimum recycled content and end-of-life management. Digital passports for EV batteries will make it easier for consumers to choose more sustainable products and for recyclers to treat waste batteries and recover materials.

We will continue to work with the other countries in the UK to update relevant batteries regulations, seeking to align with the EUBR where appropriate. This will improve the eco-design of batteries, help create market demand for secondary EV battery inputs, and increase second battery use in ways that are safe and appropriate in workplaces and for consumers.

4.5 The Food System

Access to safe, healthy food contributes to Scotland's food security and is essential to support and protect Scotland's population, as well as being central to Scotland’s high performing food and drink economy. However, food and drink supply chains also generate significant amounts of waste and environmental impacts.

Priority: work with the bioeconomy sector to develop a roadmap

The bioeconomy sector has potential to create significant and sustainable economic growth.^[28] It is a highly innovative sector, creating new products ranging from new sources of omega-3 from wastewater from distilleries to building insulation from local hemp crops. Roadmap development for this sector will aim to maximise the value derived from our biological resources and greater adoption of circular economy practices.

Priority: Improve circularity across the supply chain

Circularity is recognised in our Good Food Nation Plan^[29], the Agricultural Reform Programme, Local Food Strategy,^[30] and delivery of our marine food production strategies.^[31] Existing actions include:

• ClimateXChange research^[32] into the actions farmers and crofters can take to support a more circular agricultural sector.
• Part-funding of WRAP’s UK Food and Drink Pact,^[33] which is engaging in collaborative action across the entire UK food chain to deliver farm-to-fork reductions in food waste, greenhouse gas emissions, and water stress.
• Investment via the Marine Fund Scotland to help deliver innovative circular economy approaches.
• Advice to businesses to cut waste and save money through Zero Waste Scotland’s Food Waste Reduction Business Support Service.^[34]

Priority: Develop an intervention plan to guide long-term work on household food waste reduction behaviour

Given the importance of behaviour change to tackling food waste, we are working with partners to review evidence and develop a behaviour change intervention plan by 2026/27 to help inform long-term household food waste reduction action.^[35]

Priority: Explore improvements to food waste collection systems

In 2022 around 80% of Scotland’s households had access to food waste collection services. We recently consulted on the approach to the existing rural food waste exemption, which enables local authorities not to collect food waste from some rural locations if it is inefficient to do so, to assess whether it should be updated in order to expand access to food waste collections.^[36]

We are also assessing wider household recycling services in Scotland, including food waste collections and other organic waste, as we develop the new household recycling Code of Practice for Scotland.

Priority: Develop effective options with stakeholders to support food waste reduction by businesses

Food waste and surplus reporting reveals the size of the issue within businesses and encourages behaviour and operational change to reduce costs. Reporting also increases transparency by providing up-to-date information on the amount of food waste produced and where potential new business opportunities could occur.

As set out in the Circular Economy and Waste Route Map, we will develop effective options to implement mandatory reporting for food waste and surplus by businesses from 2025/26. This includes UK-wide engagement to explore opportunities for alignment, helping to ensure considerations are given to the different needs of large, medium and small businesses operating in Scotland and across the UK.