Waste Reprocessing Infrastructure in Scotland

5. Challenges and opportunities

Common challenges and barriers

If we are to achieve our circular economy ambitions, we require sufficient reprocessing infrastructure to manage the volume of materials flowing through our economy. However, material reprocessing everywhere faces a set of common challenges^[49].

The high cost of some processes may mean that they are unable to compete with low-cost virgin alternatives. In recent years, domestic costs have increased due to the high price of energy and labour in the UK compared to other countries, driving some closures or relocations. Commercial viability depends upon securing a stable supply of materials in order to achieve required economies of scale and minimise the impact of price fluctuations. Finally, the value of some reprocessed material can currently be too low to justify investment, particularly where there is contamination in the collection and sorting process or material inputs have high environmental exposure (for example, fishing gear).

While there are common challenges, barriers to investment also vary significantly by material type (Table 1). For some material types, notably textiles and organic wastes, there is a high volume of material arisings, but current consumer behaviours and collection and sorting processes mean that a large proportion is disposed as residual waste. For other materials such as plastics there is a growing availability of material for reprocessing, but the current contractual landscape can mean that material tonnages are tied to existing facilities or long-term contracts (particularly for household plastic packaging) and so do not support new infrastructure investment.

Finally, new reprocessing infrastructure requires significant financial investment. The evolving landscape of waste composition and recycling markets can make long-term planning challenging. This can be further compounded by consumer behaviours – both purchasing habits and recycling practices – that influence waste composition. Investment and development can be slowed by changing requirements under environmental regulations, planning and permitting permissions, and access to key utilities including grid connections. Securing upfront capital and accessing the necessary investment therefore relies on a supportive and stable policy environment, especially for innovative new technologies.

Table 1: Potential barriers to investment in domestic waste infrastructure across the 15 materials considered in this report.

Material stream

Plastics

Potential barriers to infrastructure development

Limited advanced sorting (Plastic Recycling Facilities) and recycling capacity, reliance on export markets, energy costs, contamination issues, access to and aggregation of material (type and tonnage) and material data, limited demand for reprocessed material, competition from virgin plastics.

Material stream

Aluminium and Steel

Potential barriers to infrastructure development

High energy costs for reprocessing, dependence on scrap collection efficiency, competition with global markets

Material stream

Paper and Card

Potential barriers to infrastructure development

Fluctuations in demand for recycled fibre, contamination from mixed waste streams, processing infrastructure gaps in Scotland

Material stream

Glass

Potential barriers to infrastructure development

Energy costs, challenges in colour sorting, transportation costs, challenges of capturing non-container glass

Material stream

Wood

Potential barriers to infrastructure development

Lack of dedicated reprocessing facilities, contamination from treated wood, inconsistent collection systems between public and private sector

Material stream

Fibre-based composites (drink cartons)

Potential barriers to infrastructure development

Complex material composition requiring specialised recycling technology, limited domestic sorting and processing capacity, low tonnage availability in Scotland

Material stream

Electronic Waste

Potential barriers to infrastructure development

Complex material separation, hazardous components, reliance on export markets for processing, immature collection infrastructure for smaller domestic products

Material stream

Batteries

Potential barriers to infrastructure development

Hazardous material handling requirements, fire risks during storage, energy and insurance costs, limited domestic recycling capacity, collection inefficiencies

Material stream

Renewable energy installations

Potential barriers to infrastructure development

High costs to reprocess material, low value and limited demand for recyclate, transportation costs and logistics, small current size of the market

Material stream

Organic Waste

Potential barriers to infrastructure development

Infrastructure gaps for anaerobic digestion and composting, contamination risks, regulatory hurdles

Material stream

Textiles

Potential barriers to infrastructure development

Limited collection and sorting infrastructure, low demand for reprocessed material, data limitations

Material stream

Mattresses

Potential barriers to infrastructure development

Bulky nature complicates logistics and increases costs. Challenges associated with material separation and markets for some of the materials recovered

Material stream

Construction Materials (Concrete)

Potential barriers to infrastructure development

High transportation costs, contamination from mixed demolition waste

Material stream

Tyres

Potential barriers to infrastructure development

Limited end markets for recycled rubber within Scotland, transportation costs, regulatory restrictions on disposal

Opportunities to support domestic reprocessing infrastructure and investment

The materials reprocessing sector is expected to grow to keep pace with the material needs of the Scottish and global economy, particularly those materials that underpin our transition to net zero. The circular economy policy landscape has also sought to drive the separation and recycling of material to maximise the value of our resources. Finally, there will be a growing need to manage new material streams in the near future, for example as the first generation of electric vehicles and Scotland’s renewable energy infrastructure reach end of life at scale.

For some materials, the capacity of Scotland’s domestic reprocessing infrastructure has not kept pace with material arisings, with the majority of plastic, metals, paper and card, electronic waste and batteries managed through exports. The data considered in this report point to several potential opportunities to expand reprocessing infrastructure, though this will be dependent on the wider market across the UK and beyond. A key role of the Scottish Government is to ensure there is a clear and stable policy framework to support economic investment, alongside a viable route to market and access to the relevant sites, skills and infrastructure. This may also include derisking early-stage technologies in some cases. Action to address the challenges highlighted here will help to unlock investment in our circular economy and support a just transition, with the potential to position Scotland as a global leader in reprocessing for some materials.

Strategic infrastructure capacity

Domestic reprocessing helps to ensure that maximum value is extracted from material resources, and adds to long-term resilience of supply chains by reducing reliance on imports. This is particularly true of strategically important materials that form the cornerstone of the transition to net zero and Scotland’s renewable energy infrastructure.

Our Green Industrial Strategy (GIS) seeks to ensure that Scotland realises the maximum possible economic benefit from the opportunities created by the global transition to net zero^[50]. We cannot achieve the pace and scale of change required to seize this opportunity without the critical resources that underpin this transition, and the GIS highlights material reprocessing as central to achieving its goals. This is not unique to Scotland; the UK Government’s Critical Raw Materials Strategy acknowledges that critical minerals are essential to the new, Green Industrial Revolution and seeks to accelerate a circular economy of critical minerals in the UK^[51], while the EU’s Critical Raw Materials Act seeks to strengthen all stages of the European critical raw materials value chain, including enhancing circularity. While the data underpinning this report cannot directly identity critical raw materials as part of the waste stream, they do point to a lack of domestic reprocessing capacity for metals and waste types that contain these materials, including electronics, batteries, and turbine blades. In some cases these materials arise in small quantities and can be difficult to capture in economy-wide material flows, yet their value and importance offer a strategic opportunity to better understand where they arise, and how to recapture their material value for future manufacturing and economic application.

Battery technologies are essential to electric vehicles (EVs) and renewable energy storage, with global demand for batteries increasing rapidly and set to increase 14 times by 2030⁴. Batteries contain numerous critical raw materials that can be recycled at the end of their life, and as demand grows there will be increased need to ensure these are not lost from the supply chain via disposal or export. Improper storage and disposal of batteries can also have a number of damaging environmental impacts. Scotland currently exports approximately 78% of existing battery waste for reprocessing elsewhere, with supply expected to grow. However, the battery reprocessing sector faces a number of well documented challenges, including high energy costs, fires at waste battery storage facilities, insurance costs, and the complexity and cost of reprocessing processes. There is therefore a strategic case for greater investment in batteries reprocessing infrastructure, technologies that can minimise risks, and associated supporting policies, and the Scottish Government is already prioritising this as an area of focus with the other governments of the UK.

Finally, Scotland has led the way in transforming our energy generation to renewable sources. We have seen an almost a four-fold increase in renewable generation since 2010, with much of this growth in onshore wind energy^[52]. By 2050, 26 million tonnes of material is expected to be generated as waste for consented offshore wind installations, with up to a further 1.4 million tonnes from onshore wind. Wind turbines comprise a range of materials including steel, copper and rare earth elements. Zero Waste Scotland estimate that there is potentially up to 1.56 tonnes of critical raw materials (CRMs) contained within a 2MW turbine^[53]. Maximising the capture of these materials at end of life – as well as avoiding the environmental and economic costs of disposal or exporting heavy material elsewhere – has therefore become a key focus of Scotland’s onshore and offshore policy, and presents a significant opportunity once decommissioning commences at scale.

Quantity and quality of supply

We continue to dispose of a high proportion of some material types, particularly plastics, organic waste, and textiles. Scotland’s Circular Economy and Waste Route Map include various policies that particularly target these materials, including mandatory kerbside collections of flexible plastics from 2027. However, this will hinge on accessibility, uptake and participation by households. Expanding reprocessing infrastructure for plastic film and flexibles ahead of the introduction of soft plastic collections is a priority given limited existing capacity across the UK. Supporting expansion of this reprocessing infrastructure ahead of 2027 is a focus of both the Scottish and UK Governments, and underpinned by consideration of PRN reforms and a review of the plastic packaging tax.

Scotland’s bioeconomy produces more than 10 million tonnes of organic surplus every year, which could be used as valuable feedstocks for bio-based processes such as food and feed ingredients and bio-based materials^[54]. Previous research in this space has found that more circular approaches to Scotland’s beer, whiskey and fish sector by-products alone could generate £500-800m each year, representing a significant opportunity to add value to waste and by-products. As well as diverting higher volumes of organic wastes from residual more can also be done to extract the highest value possible, for example as animal feedstock or as inputs to green chemicals and biofuel, as demonstrated by Celtic Renewables^[55].

Food waste recycling also presents one of the largest opportunities to improve household recycling performance and quality in Scotland, and is critical if we are to further reduce the impact of waste on our climate. Participation in food and garden waste collections in areas with those services can be variable, meaning that the increases required to reduce the carbon emissions associated with organic waste will require a commensurate increase in processing capacity.

Finally, our commitment to prioritise textile waste in the forthcoming Product Stewardship Plan provides the opportunity to consider interventions across the whole supply chain that can drive the recyclability and collection of textile waste, including considering the potential to align with forthcoming EU requirements for Extended Producer Responsibility, if appropriate.

Access to material

Many materials, even if collected in large quantities, can be unavailable to new reprocessing facilities due to existing contract arrangements. This can hold back investment in new reprocessing infrastructure, particularly for emerging technologies. Action to aggregate input materials and support access can therefore support new reprocessing opportunities, particularly for new market entrants and emerging technologies. Zero Waste Scotland has previously supported work on a material brokerage service for local authorities, with the aim of generating economies of scale enabling higher levels of contract interest and price. Similar approaches to pooling material tonnages for contract have been used in Wales and within parts of the NHS. Brokerage services work well when there is strong market engagement prior to the service or framework development.

Assessment of the potential to support multiple local authorities to collaborate or partner to deliver services may deliver potential efficiencies and reduce complexity for reprocessors seeking to access material, though could risk locking up a greater proportion of material in long-term contracts. Finally, producer responsibility policies such as the deposit return scheme for single use drinks containers, can transfer material ownership to product producers, potentially offering new opportunities to access material for reprocessing.

Demand for reprocessed material

Reprocessors must compete with suppliers of virgin materials on largely global markets. While there will be other drivers that support demand for reprocessed materials, cost is assumed to be the key component underpinning demand for reprocessed products. For some materials, for example aluminium or lead-acid batteries, market dynamics favour the use of recycled materials, leading to strong market demand. However, suppliers particularly of high grade plastics and textiles face price volatility and competition from imported virgin or lower recycled content materials.

We see a strategic and environmental case to stimulate demand for recycled content or other reprocessed material and strengthen domestic reprocessing. Demand-side policies are largely reserved to the UK Government and impact businesses in all parts of the UK, and so this is an area that the Scottish Government is prioritising for UK-wide action, including engagement through the UK Government’s Circular Economy Taskforce. This could be further supported by a better understanding of current and future domestic raw material dependencies, and opportunities to meet demand with reprocessed material, particularly for critical raw materials and non-virgin polymers.

EU Alignment

Circular Economy policy development is further advanced in the EU for many of the materials considered by this report. The EU has also updated rules on where in the recovery process quality materials can lose their waste status, improving quality assurance and boosting the market for secondary raw materials. There is a risk that Scotland’s environmental standards fall behind those of the rest of Europe, and that divergence results in new regulatory or technical barriers to trade for Scottish businesses. Consultation feedback and engagement with businesses has already indicated that there is appetite from some businesses to keep pace with the EU to maintain competitiveness, and the Scottish Government will seek to align with the EU where it is meaningful to do so and in a manner that seeks to contribute towards maintaining and advancing environmental standards.

Data availability

This report highlights some of the challenges associated with accessing high quality and up-to-date data for waste material flows. This is also strongly reflected in our engagement with industry and enterprise agencies. Publicly available data gathered from industry suffers from a time lag which can create uncertainty for both investment decisions and for the development of policy. Updates to waste classifications in Scotland have also been viewed by industry as too slow and failing to keep pace with new developments. Where better data sources do exist, they can be fragmented or difficult for potential investors to access. Material and product development can also happen faster than reporting or legislative cycles. Some of these issues may be addressed by the forthcoming Digital Waste Tracking Service^[56], which will make data available in a more timely manner and inform better decision making. However, wider changes to waste data and classifications will require action across the UK.

Increasingly other nations and the EU are seeking to improve data flows and enhance traceability. In conjunction with recycled or local content standards and improve quality assurance, this can enhance local supply and diversify the supply chain. These traceability elements if mirrored in Scotland could drive innovations in data collection, and open up new markets to reprocessed Scottish products.

Additional opportunities to improve data availability include:

• Gaining a clearer understanding of what data will not be available through Digital Waste Tracking, particular for waste source that do not have EWC codes.
• Improving our understanding of commercial and industrial waste composition, including through our national compositional study of residual waste from commercial premises, particularly industries producing higher volumes of critical raw materials (for example, oil and gas decommissioning, manufacturing).
• Understanding the potential of artificial intelligence innovations to provide more timely and granular data, including end-destination information.
• Identification of opportunities to leverage data sharing across material streams and sectors.

Sector engagement

This report provides a baseline of the material value chain and the existing and planned reprocessing infrastructure in Scotland, based on publicly available data. Ongoing sectoral engagement is essential to build deeper insights into the barriers and opportunities for material reprocessing in Scotland and to maximise material value. It also helps to understand market readiness of existing facilities to accommodate changes in policy, allowing smooth transition, supporting compliance, and highlighting future policy needs.

Strategic partnerships between government, industry, and investors have proved successful at accelerating infrastructure development and local job creation. These underpin our Infrastructure Investment Plan, forthcoming Circular Economy Strategy, and the work underway to identify material reprocessing opportunities at Grangemouth. We are also engaged in cross-border partnerships to optimise material flows into and out of Scotland that maximise our infrastructure assets, local expertise and abundant clean energy. We will continue to embrace new opportunities on the back of the findings in this report that will help ensure that our circular economy is built for growth, creates green jobs, and underpins supply chain resilience and security.