1. The following are no longer Net Zero, Energy and Transport Committee Members but took part in Stage 1 consideration ?

   • Liam Kerr MSP (resigned 29 June 2023)

   • Ash Regan MSP (resigned 30 October 2023)

2. The Net Zero, Energy and Transport Committee gives a qualified welcome to the Circular Economy (Scotland) Bill. With an estimated 98% of Scotland's material use derived from virgin materials, Scotland urgently needs to become a more circular nation: on environmental grounds and to realise our net zero ambitions. Having reviewed the evidence, and listened to a broad cohort of stakeholders from the public, private and third sectors, we are persuaded that legislative action is necessary to help make this change. Given the clear urgency required to address the severity of the issue, the Scottish Government must look at additional opportunities to act.

3. The measures proposed by the Scottish Government in this Bill are well intended and most should have a positive impact. However, the Committee remains unconvinced that the Bill on its own will create the systems-wide change needed in Scotland to fully close the loop. There is a heavy focus in the Bill on waste management, littering and flytipping; less so on tackling consumption and concrete measures to encourage repair and reuse. We also believe care must be taken to strike the correct balance between encouraging behavioural change of consumers and the underlying responsibilities of producers. Producers must be responsible for the materials they create and distribute. We acknowledge that the Scottish Government already has some existing legislative levers (for example in relation to producer responsibility) and that some other actions can be taken forward without new legislation, as set out in the Scottish Government?s draft Circular Economy and Waste Route Map to 2030. We also recognise that some key matters are reserved and that the Scottish Government must work within the requirements of the UK Internal Market Act.

4. The Scottish Government has brought forward this Bill largely as framework legislation, meaning that a number of key details are not found on the face of the Bill, but will be brought forward as subordinate legislation. The Committee has sought to scrutinise both the general principles of the Bill and give some consideration to potential future secondary legislation. This has presented a challenge. It is difficult to express an informed view on the Bill?s interplay with UK Internal Market requirements. That will take place when powers created by the Bill are used, and subordinate legislation is laid in the Scottish Parliament. It is also hard to scrutinise the financial implications of potential future secondary legislation stemming from any framework Bill, as the Finance and Public Administration Committee underlined in their report.

5. Whilst some Committee Members found what sometimes seemed like a lack of detail on the face of the Bill disappointing, others welcomed the opportunity this ought to provide for the Scottish Government and key stakeholders to shape future legislation together, under a process of co-design. All Members agree that the Scottish Parliament must have ample opportunity to consider regulations derived from these enabling powers, including having meaningful opportunity to consult widely on the most complex ones. In some cases, this will require amending the Bill to create space for enhanced and meaningful consultation and scrutiny.

6. A statutory circular economy strategy and targets are welcome inclusions in the Bill. Voluntary approaches have been largely insufficient in driving the scale and pace of changes required. Given the relationship between both provisions, the Committee believes the Bill should be clearer on how targets and the strategy will speak to each other, to support a joined up approach. Setting the right statutory targets will be crucial and we call for the Bill to be amended, to give the Scottish Parliament more time to consider any proposals brought forward in this area. We also want the Scottish Government to explain why it has not made the imposition of targets a duty: in our view it should be a ?must? rather than a ?may? power.

7. The Bill must avoid unintended consequences. We heard concerns from business and other stakeholders about the potential impact of provisions on charges for single-use items, disposal of unsold consumer goods and mandatory reporting of waste data. The Committee heard compelling evidence regarding the environmental, social and economic rationale for these powers, but the Scottish Government must work constructively and pragmatically with industry and listen to their suggestions before bringing regulations forward. A circular economy cannot be achieved unless the Scottish Government takes businesses with it on this journey. The Scottish Government must also think strategically about the application of these provisions to prioritise waste streams from industries such as clothing and construction, where targeted interventions will have the most impact in delivering more circularity.

8. We support the Scottish Government?s ambitions in Sections 10 and 11 of the Bill regarding household waste. The Committee agrees that all householders must fully embrace the shared endeavours to increase recycling and tackle flytipping. The use of penalties must be proportionate and not at the expense of wider engagement with households.

9. The Bill offers the opportunity for a household recycling and waste management system in Scotland that is both more consistent across council boundaries and more ambitious overall, including embracing reuse and repair more systematically. Proposals for a statutory code of practice and local targets are therefore welcome. The current fragmented approach risks confusing households and undermining efforts to establish consistently high-quality service delivery nationwide. However, the Scottish Government must work collaboratively with local government in establishing mandatory service standards and setting local targets to reflect local circumstances and the principles of the Verity House Agreement. It must also make sure the resources and investment required to deliver consistency are available.

10. We also support additional measures to tackle littering and more serious forms of waste crime. But unless these are backed up with additional resources to enforce them, they will fall short of expectations.

82. The Circular Economy (Scotland) Bill was introduced on 13 June 2023 by M?iri McAllan MSP, then the Cabinet Secretary for Transport, Net Zero and Just Transition. The Bill was accompanied by?

    • Policy Memorandum

    • Explanatory Notes

    • Delegated Powers Memorandum

    • Financial Memorandum

    • Statement on Legislative Competence

83. The Policy Memorandum says its purpose is to facilitate progress towards a circular economy in Scotland. It says that a more circular economy?

    • ?cuts waste, carbon emissions and pressures on the natural environment;

    • opens up new market opportunities, improves productivity, increases self sufficiency and resilience by reducing reliance on international supply chains and global shocks; and

    • strengthens communities by providing local employment opportunities and lower cost options to access the goods Scotland needs.?ⁱPolicy Memorandum, paragraph 4.

84. The Parliamentary Bureau referred the Bill to the Net Zero, Energy and Transport Committee to consider and report to the rest of the Parliament on the Bill's general principles. The Delegated Powers and Law Reform and Finance and Public Administration Committees have separately reported on aspects of the Bill relevant to their remit, and the main points they raised are considered further below.

85. On 27 June, we agreed a call for views on the Bill, which was launched on 30 June. It was split in two: a detailed set of questions aimed at professional organisations and stakeholders, plus an online discussion with the public. The call closed on 1 September. We received 123 submissions of written evidence and 98 people took part in the online discussion.

86. We agreed initial witnesses on 27 June and further witnesses on 26 September. We held ten evidence sessions on the Bill?

    • On 26 September 2023: representatives of Scotland's business community;

    • On 3 October 2023: statutory environmental bodies the Scottish Environment Protection Agency (SEPA) and NatureScot, and also from Zero Waste Scotland;

    • On 31 October 2023: the Scottish National Investment Bank (SNIB);

    • On 7 November 2023: Consumer Scotland;

    • On 14 November 2023: representatives of environmental, social and non-governmental organisations;

    • On 21 November 2023: two panels: first the Convention of Scottish Local Authorities (COSLA), the Society of Local Authority Chief Executives and Senior Managers (SOLACE) and private waste companies, then a panel of local authorities.

    • On 28 November 2023: two panels: first an international / rest of UK panel of stakeholders involved with circular economy policy, then a panel of academic experts in the circular economy and the UK internal market;

    • On 5 December 2023: Lorna Slater MSP, Minister for Biodiversity, Circular Economy and Green SkillsⁱReferences to "the Minister" in this report are, unless otherwise stated, to Ms Slater and Scottish Government officials.

87. We put on record that amongst the representatives of business we invited to give evidence was Amazon UK. They are a major employer in Scotland and an important contributor to our retail economy. We were sure they would have an interesting story to tell about their place in the circular economy and were keen to hear it. Despite our best efforts to find a slot that would suit them, Amazon UK repeatedly indicated that they were not available to give evidence. This is disappointing and somewhat surprising, given Amazon UK's significant resources including a very active public affairs department. We acknowledge that they did, in the end, provide written evidence which says they have "...made every effort to provide comprehensive and informative answers...." to the Committee.ⁱWritten submission from Amazon UK.

88. As well as taking formal evidence, we visited?

    • the Binn Group, a waste and resource management company, at its site in Glenfarg, Perthshire on 8 November;

    • the Edinburgh Remakery, the Edinburgh Tool Library and a refill shop called WeighToGo in Leith, Edinburgh on 20 November; and

    • Change Waste Recycling, a recycling and waste management company at its office in Edinburgh on 30 November.ⁱThemes explored on visits can be found in Annexe C.

    On 15 November, we also held an online engagement event with small and medium-sized enterprises (SMEs) taking more circular approaches to products and services.ⁱⁱThemes explored during the event can be found at Annexe D.

Scottish Parliament (2023)

89. We also acknowledge a thoughtful introductory briefing on the circular economy from Dr Catherine Weetman of Rethink Global at our 2023-24 Business Planning Day on 4 September.

90. We are grateful to everyone who contributed to scrutiny of the Bill.

91. A briefing from the Scottish Parliament Information Centre (SPICe) says that?

    "Exact definitions or models of how a circular economy is expressed can differ, but generally the emphasis is on circularity of resource use, minimising or designing out waste, and doing so in a way that addresses the twin climate and nature crises."ⁱScottish Parliament Information Centre (SPICe). SPICe Briefing - Circular Economy (Scotland) Bill.

92. The opposing concept to a circular economy is a linear model of consumption where products are bought, used, and thrown away as waste. This means more virgin materials must be extracted from ecosystems to be manufactured. It means more production and more consumption.

93. Scotland's current performance on the circular economy is set out the Circularity Gap Report Scotland 2022 from Zero Waste Scotland.ⁱCircle Economy (2022). The Circularity Gap Report Scotland. It states that Scotland's per capita material footprint is nearly double the global average at 21.7 tonnesⁱCircle Economy (2022). The Circularity Gap Report Scotland. and that Scotland is only 1.3% 'circular', meaning more than 98% of materials in Scotland are extracted from virgin resources.ⁱCircle Economy (2022). The Circularity Gap Report Scotland.

94. Clearly therefore, Scotland current level of material consumption is unsustainable and inconsistent with wider policy goals, in particular addressing the climate and biodiversity crises. The Circularity Gap Report suggests that increasing circularity could help to reduce emissions in Scotland by up to 43%.ⁱCircle Economy (2022). The Circularity Gap Report Scotland.

95. According to the SPICe Bill Briefing, there are two main ways of calculating a country's carbon emissions?

    "Production-based emissions: often referred to as territorial emissions, are calculated by adding up all the emissions that are produced within a country (e.g. emissions produced from industry, manufacturing, energy production, transport etc.).

    Consumption-based emissions: often referred to as a "carbon footprint" are calculated by adding up all the emissions associated with the goods and services consumed within that country (e.g. emissions from the products and service we buy and consume)."ⁱScottish Parliament Information Centre (SPICe). SPICe Briefing - Circular Economy (Scotland) Bill.

96. There is much focus in climate policy on production-based emissions, mainly because this is the basis for national accounting under the UN's Paris Agreement 2015United Nations Framework Convention on Climate Change (2015). The Paris Agreement. and associated legal targets. Production-based emissions are the basis of the national targets set out in the Climate Change (Scotland) Act 2009. This approach can however cause issues where a state reduces its production-based emissions without reducing its consumption emissions; for instance by decarbonising its own industry but increasing imports of goods and services made abroad in a carbon-intensive way. This is sometimes called "offshoring".ⁱScottish Parliament Information Centre (SPICe). SPICe Briefing - Circular Economy (Scotland) Bill.

97. Section 37 of the Climate Change (Scotland) Act 2009 requires the Scottish Government to make an annual report on national consumption-based emissions. Recent reports show that consumption emissions are larger than production-based emissions.^ivScottish Government (2023). Scotland's Carbon Footprint 1998 ? 2019.

98. The waste hierarchy is a method of prioritising action to prevent waste. According to the SPICe Bill Briefing?

    "Under the waste hierarchy, waste prevention through efficient use and reuse of resources, recycling and recovery of value should be prioritised in that order, with landfill or other disposal a last resort"ⁱScottish Parliament Information Centre (SPICe). SPICe Briefing - Circular Economy (Scotland) Bill.

SPICe Briefing on the Circular Economy (Scotland) Bill.

99. The briefing also states?

    "Section 34 of the Environmental Protection Act 1990 (as amended) makes it the duty of everyone (with the exception of occupiers of domestic properties as respects the household waste produced at those properties) who produces, keeps or manages controlled waste, or as a broker or dealer has control of such waste, to take reasonable measures to apply the waste hierarchy. Producers of waste also have a duty under the Act to take reasonable steps to increase the quantity and quality of recyclable materials."ⁱScottish Parliament Information Centre (SPICe). SPICe Briefing - Circular Economy (Scotland) Bill.

100. Achieving a more circular economy involves pulling on a number of policy levers, engaging both devolved and reserved competence. There are also important international obligations and standards that domestic circular economy policy must either adhere to or give regard to. One example of such consideration is alignment with the UN Sustainable Development Goals.ⁱUnited Nations (2015). The UN Sustainable Development Goals.

101. Regulation of waste management and recycling are devolved areas. However, many of the levers further up the waste hierarchy which could be used to prevent or design out waste are within reserved areas, such as fiscal policy, product labelling and standards, and trade policy. The intersection between devolved and reserved competence can be complex.

102. There are also some areas that are devolved but where regulation has historically taken place UK-wide, to achieve policy coherence and maintain the UK internal market. Brexit has also led to UK-wide regulatory approaches being developed in areas formerly regulated at an EU level. An example of this is the expected roll out of Extended Producer Responsibility (EPR) across the UK in 2025. The policy intention behind EPR is to increase producer responsibility for the environmental costs of the items they make and incentivise them to adopt more sustainable practices.

103. Sections 50 and 51 of the Environment Act 2021 allow for the establishment of producer responsibility regimes.[1] According to the draft Circular Economy and Waste Route Map to 2030?

     ?Producer responsibility schemes are currently in place UK-wide for packaging, waste electrical and electronic equipment (WEEE), batteries, and end-of-life vehicles (ELVs).? We are working with the UK and devolved governments on reforms to these schemes which will help drive circular economy outcomes. The first will be EPR for packaging, which is being implemented from 2025 on a four nations basis across the UK.?ⁱⁱEnvironment Act 2021, Sections 50 and 51.

104. A consultation on extended producer responsibility for packaging closed in March 2021ⁱⁱⁱUK Government (2021). Extended Producer Responsibility for Packaging. and the results of this contributed to the development of draft regulations.^ivUK Government (2022). Consultation outcome: packaging and packaging waste: introducing Extended Producer Responsibility. The recently closed consultation^vUK Government (2023). Draft producer responsibility obligations (packaging and packaging waste) regulations 2024. on draft regulations was "undertaken jointly by the UK Government, the Scottish Government, the Welsh Government and the Department of Agriculture, Environment and Rural Affairs in Northern Ireland." The UK Environmental Law Association said the results of this should inform the development of the Bill.^viWritten submission from the UK Environmental Law Association.

105. There was support for ensuring that the responsibility for materials throughout their lifecycle, including costs of disposal, remained with producers. The interaction with proposed extended producer responsibility was a theme of comments on several provisions of the Bill.^viNet Zero, Energy and Transport Committee, Official Report, 14 November 2023, col 31 and 47; Net Zero, Energy and Transport Committee, Official Report, 21 November 2023, cols 19 and 20 and written submissions including NFU Scotland, Action to Protect Rural Scotland and The UKRI CircularChem Centre.

106. Even at a purely devolved level, circularity is complex as it relates to other policy goals and initiatives, particularly - as already noted - tackling the climate and biodiversity crises but also, for instance, achieving a just transitionⁱA just transition seeks to ensure that the benefits of a green economy transition are shared widely, and provides support to those who stand to lose out economically from the transition. away from a high carbon emission-based economy. In 2016, the Scottish Government sought to bring all this together in the strategy paper, 'Making Things Last'.^viiiScottish Government (2016). Making Things Last: a circular economy strategy for Scotland.

107. The legislative actions set out in the Bill are part of a framework of actions the Scottish Government has proposed to progress towards a circular economy. Alongside consultation on the Bill in 2022, the Scottish Government also undertook a parallel consultation exercise on proposals for a Circular Economy Waste Route Map to 2025 and beyond.^ixScottish Government (2022). Delivering Scotland's circular economy A Route Map to 2025 and beyond. When the Committee embarked on scrutiny of the Bill, the Scottish Government indicated that a final version of the route map would be published before the end of 2023. The Scottish Government instead published a further draft on 18 January 2024^viiNet Zero, Energy and Transport Committee, Official Report, 5 December 2023, col 3. and, because of this, we requested, and obtained, a short extension to the Stage 1 deadline to allow time to consider this further draft. The consultation on this latest draft closes on 15 March 2024.^xiScottish Government (2024). Scotland?s Circular Economy and Waste Route Map to 2030 Consultation.

108. A Circular Economy Bill has been a long-standing commitment of the Scottish Government. The Bill was first promised as part of the Programme for Government 2016-17.ⁱScottish Government (2016). A Plan for Scotland: The Government's Programme for Scotland 2016 -17. The Covid-19 pandemic delayed progress on the proposed Bill originally consulted on by the Scottish Government in 2019.ⁱⁱPolicy Memorandum, paragraph 22.

109. In 2022, the Scottish Government began re-consulting on proposals for the Bill, seeking views on thirteen separate policy proposals.ⁱⁱⁱScottish Government (2022). Delivering Scotland?s circular economy: a consultation on proposals for a Circular Economy Bill. An analysis of the consultation responses was published in November 2022.ⁱⁱⁱScottish Government (2022). Delivering Scotland's circular economy: Proposed Circular Economy Bill - Consultation analysis.

110. Two proposals in the 2022 consultation not taken forward in the Bill were on?

     • establishment of circular economy public body; and

     • business recycling collection zoning.

111. The Scottish Government's reasons for omitting these proposals from the Bill can be found in the Policy Memorandum.^vPolicy Memorandum, paragraphs 128-135.

112. Another measure not taken forward in the Bill was on giving the Scottish Ministers and/ or local authorities powers to incentivise household recycling, for example through waste charging.ⁱⁱⁱScottish Government (2022). Delivering Scotland?s circular economy: a consultation on proposals for a Circular Economy Bill. The Policy Memorandum does not discuss why this proposal has not been taken further. However, the draft 2025 Routemap set out a proposal to review waste and recycling service charging by 2024. This commitment has been included in the draft 2030 Routemap with an extended timescale for delivery (2024/25).^viiScottish Government (2024). Scotland?s Circular Economy and Waste Route Map to 2030 Consultation.

113. The Bill contains 20 Sections?

     • Sections 1 to 5 ? creates a new duty for Scottish Ministers to prepare and publish a circular economy strategy;

     • Sections 6 and 7 ? provides a new power for Scottish Ministers to create statutory circular economy targets;

     • Section 8 ? provides a new regulation-making power for Scottish Ministers to restrict the disposal or destruction of unsold goods;

     • Section 9 ?confers new regulation-making powers for Scottish Ministers to introduce additional charges for single-use items;

     • Section 10 ? establishes new criminal offence for householders failing to meet their obligations around the disposal of waste as set out in the Environmental Protection Act 1990;

     • Section 11 - creates a new fixed penalty regime and civil penalty regime in relation to failure to comply with household waste requirements under section 46 of the Environmental Protection Act 1990;

     • Section 12 - introduces new obligations for Scottish Ministers to prepare a statutory code of practice on recycling to be followed by local authorities in undertaking their waste collection duties.

     • Section 13 - provides powers for Scottish Minister to set statutory recycling targets for local authorities.

     • Section 14 ? creates a new civil penalty regime for tackling littering from a vehicle;

     • Section 15 and 16 ? creates new enforcement powers for SEPA and local authorities in relation to certain environmental offences;

     • Section 17 ? provides regulation-making powers for Scottish Government to set new obligations for reporting of information relating to waste; and

     • Sections 18 to 20 ? final and auxiliary provisions.

114. Further information on these provisions can be found in the SPICe Bill briefing.ⁱScottish Parliament Information Centre (SPICe). SPICe Briefing - Circular Economy (Scotland) Bill.

115. General views on the Bill were that it was well-intentioned and some of its provisions would have a positive impact. However, in many areas it was not thought to prioritise efforts upstream in the waste hierarchy or address the root causes of circularity.ⁱⁱNet Zero, Energy and Transport Committee, Official Report, 28 November 2023, cols 29, 30, 31 and 32 and written submissions including Circular Communities Scotland, Action to Protect Rural Scotland and UKRI Interdisciplinary Centre for Circular Chemical Economy. The Minister told us there were several provisions which focused on reduced consumption or reuse including the strategy proposed at Sections 1-5 and the proposed targets at Sections 6-7,ⁱⁱNet Zero, Energy and Transport Committee, Official Report, 5 December 2023, col 4. as well as the wider policy framework - the Routemap - existing outside the Bill.ⁱⁱNet Zero, Energy and Transport Committee, Official Report, 5 December 2023, col 4.

116. Whilst some new duties are directly set out on the face of the Bill, some of the most important - or potentially most important - aspects of the Bill arise from new order-making powers being created and given to the Scottish Ministers. The Bill confers 16 such powers, as listed in Annexe E of this report. The Bill therefore largely meets the definition of a "framework Bill". The UK Cabinet Office has said that a framework Bill is primary legislation that?

     ?... consists primarily of powers and leaves the substance of the policy, or significant aspects of it, to delegated legislation..."ⁱUK Government (2022). Guide to Making Legislation.

117. The Minister told us the Bill?

     ?.. will establish the legislative framework to support Scotland's transition to a zero waste and circular economy, significantly increase reuse and recycling rates, and modernise and improve waste and recycling services.?ⁱⁱNet Zero, Energy and Transport Committee, Official Report, 5 December 2023, col 2.

     [Emphasis added]

118. There are arguments for and against Bills being framework Bills and these were rehearsed during Stage 1 scrutiny. Broadly put, the main argument in favour is flexibility. The main argument against is the reduced opportunity for scrutiny, including financial scrutiny.

119. Framework legislation can be used to deal with policy areas where there may be shifts in priorities over time without necessitating new primary legislation or where the relevant policy area is relatively volatile, for instance because of current or anticipated technological advances. This is a relevant consideration in the context of circular economy policy.ⁱNet Zero, Energy and Transport Committee, Official Report, 7 November 2023, col 46 and Scottish Wholesale Association and the Scottish Retail Consortium noted the pace of change of technology and the former said the focus should be on what is in development. Governments may also seek to use it where they simply have not yet determined in any detail what policy in a particular area is to be. The legislation sets down a marker of future intention but does not commit the government to specific actions. In this connection, it should be noted that governments in the UK usually draft order-making powers as non-mandatory: they are "may" powers, not "must" powers, and this is the case with the Circular Economy (Scotland) Bill.

120. Subordinate legislation can enable governments to be nimble, allowing them to respond to fast-developing emergency situations, as we saw during the Covid-19 pandemic, and make laws quickly. It is not clear whether this is an important consideration in the context of creating a circular economy. Instead, some stakeholders suggested that another possible advantage of using secondary legislation rather than putting measures on the face of the Bill is that it would create further opportunities for consultation or "co-design", i.e. government and stakeholders working together on drafting a new order or regulations permitted under the new Act.ⁱNet Zero, Energy and Transport Committee, Official Report, 3 October 2023, col 34.

121. Overall, there is no question that subordinate legislation has a place in the range of tools available to governments. It is a question of whether, in each individual case where a new power is proposed, the Parliament is persuaded that it is right to give the government the broad power, rather than, by way of amendment?

     • insisting that the proposed new law should be set out on the face of the Bill;

     • narrowing the way the power can be used; or

     • subjecting the power to additional scrutiny measures in the event of it being used.

122. During Stage 1, we heard of support for specific measures being subject to order-making powers rather than being laid out on the face of the Bill. One example was on charges for single-use items where new products or environmental challenges may become clear over time.ⁱNet Zero, Energy and Transport Committee, Official Report, 26 September 2023, col 21 ; Net Zero, Energy and Transport Committee, Official Report, 14 November 2023, col 18 and Net Zero, Energy and Transport Committee, Official Report, 28 November 2023, col 35.

123. The less detail there is on the face of a Bill, the less there is to scrutinise. This is one of the main concerns raised about framework Bills, alongside a perception that they are becoming a more common way to make law. In relation to a recent Scottish Government Bill (the National Care Service Bill), the Delegated Powers and Law Reform Committee commented that there was "insufficient detail on the face of the Bill and within the Bill documents to allow for meaningful parliamentary scrutiny"ⁱDelegated Powers and Law Reform Committee Delegated powers provisions in the National Care Service (Scotland) Bill at Stage 1, 13th Report, 2023 (Session 6).. It said this was?

     "... unacceptable and risks setting a dangerous precedent, undermining the role of the parliament."ⁱDelegated Powers and Law Reform Committee Delegated powers provisions in the National Care Service (Scotland) Bill at Stage 1, 13th Report, 2023 (Session 6).

124. During Stage 1 of the Circular Economy (Scotland) Bill, stakeholders raised concerns of this nature. They questioned whether it was possible to carry out good quality scrutiny of the Bill, given the lack of detail on its face in many areas.ⁱⁱⁱNet Zero, Energy and Transport Committee, Official Report, 26 September 2023, col 2 and 4, Net Zero, Energy and Transport Committee, Official Report, 14 November 2023, col 18, Net Zero, Energy and Transport Committee, Official Report, 28 November 2023, col 35 and written submission from the Scottish Retail Consortium. The recent case of proposals for a new Scottish deposit return scheme (now considerably delayed) was raised as an example of the problems that can arise when important and technically complex lawmaking in this policy area is left to subordinate legislation.ⁱⁱⁱNet Zero, Energy and Transport Committee, Official Report, 26 September 2023, col 2.

125. The Circular Economy (Scotland) Bill's status as largely a framework Bill has affected scrutiny in two main areas?

     • Gauging the financial impact of the Bill and, with this, scrutiny of the Financial Memorandum; and

     • Attempting to assess the the Bill's interaction with the UK Internal Market Act 2020 ("the Internal Market Act").

158. Section 1 of the Bill places a new statutory duty on Scottish Ministers to "prepare" a circular economy strategy. According to the Policy Memorandum, the strategy would?

     • "Bring together legislative and non-legislative actions around the circular economy;

     • Set out a clear indication of priority sectors and direction of travel for businesses and wider stakeholders; and

     • Support the delivery of the vision and outcomes in other areas such as Scotland?s Environment Strategy, the Biodiversity Strategy and Waste Route Map."ⁱPolicy Memorandum, paragraph 28.

159. There was support for the principle of legislating to mandate the creation of a strategy.ⁱⁱNet Zero, Energy and Transport Committee. Official Report, 14 November 2023, cols 16 and 17; Net Zero, Energy and Transport Committee, Official Report, 3 October 2023 col 51 and written submissions including The Ethical Dairy, Stirling Council and The City of Edinburgh Council. Themes for consideration included?

     • Justification for placing the strategy on a statutory footing;ⁱⁱNet Zero, Energy and Transport Committee. Official Report, 14 November 2023, col 16; Net Zero, Energy and Transport Committee, Official Report, 3 October 2023 col 51 and written submissions including SEPA, UKRI Interdisciplinary Circular Economy Centre for Mineral-Based Construction Materials and South Lanarkshire Council.

     • Whether its purpose and outcome were sufficiently clearly defined;ⁱⁱNet Zero, Energy and Transport Committee. Official Report, 26 September 2023, cols 5 and 6.

     • Whether it should replicate or more closely mirror the framework for setting targets, producing and refreshing a strategy and reporting on progress in the Climate Change (Scotland) Act 2009.ⁱⁱNet Zero, Energy and Transport Committee. Official Report, 14 November 2023, col 17 and written submissions including Friends of the Earth Scotland, Scotland?s International Development Alliance and Nourish Scotland.

160. Making Things Last is the current Scottish Government strategy on a circular economy which was produced and has operated without statutory basis.ⁱNet Zero, Energy and Transport Committee. Official Report, 14 November 2023, col 21 and written submissions including Scottish Enterprise, South of Scotland Enterprise and UKRI Interdisciplinary Circular Economy Centre for Mineral-Based Construction Materials. However, some stakeholders questioned its effectiveness and its voluntary nature was identified as the primary reason for this.ⁱNet Zero, Energy and Transport Committee. Official Report, 14 November 2023, col 17 and written submissions including Olio Exchange Limited and UKRI Interdisciplinary Circular Economy Centre for Mineral-Based Construction Materials.

161. A legally-binding strategy was viewed as essential to?

     • Mandate the creation of a long term vision by the Scottish Government;ⁱⁱⁱWritten submission from Resource Management Association Scotland.

     • Provide a single point of reference for all intended action to deliver a circular economy;ⁱWritten submissions from Highlands & Islands Enterprise and Scottish Wholesale Association.

     • Ensure meaningful buy-in from across society. It would also enable collaboration amongst businesses, communities and the third sector to work with Government in reaching their ambitions.ⁱWritten submissions including CIWM Scotland, Scottish Environmental Services Association, Aberdeenshire Council.

     • Enabling investment through providing policy visibility;ⁱWritten submissions including SEDA UK, UKRI Interdisciplinary Centre for Circular Chemical Economy and The Food and Drink Federation. and

     • Identifying actions for key sectors.ⁱWritten submissions including Nourish Scotland, Consumer Scotland and NFU Scotland.

162. Some questioned the necessity of a strategy on a statutory basis.ⁱWritten submissions from the UKRI Interdisciplinary Centre for Circular Chemical Economy, The Food and Drink Federation and The Scottish Tourism Alliance. We heard that funding existing programmes to enhance and promote a circular economy across sectors and industries could also have the desired effect.ⁱⁱⁱWritten submission from The Scottish Tourism Alliance.

163. Section 1(2) lists the content the strategy must contain. It was suggested this Section should also state some of the "other matters" in relation to the development of a circular economy on the face of the Bill. These included?

     • Assessment of the international impact of Scotland's consumption;ⁱNet Zero, Energy and Transport Committee, Official Report, 28 November 2023, col 9 and written submissions including Highlands & Islands Enterprise, Scotland?s International Development Alliance and SCIAF and Siembra Colombia.

     • Just transition principles;ⁱNet Zero, Energy and Transport Committee. Official Report, 14 November 2023, col 19 and 31, written submissions including Friends of the Earth Scotland, Just Transition Partnership and UNISON Scotland. and

     • Links to the targets (discussed in the SECTION 6-7 CIRCULAR ECONOMY TARGETS part of this report).ⁱⁱNet Zero, Energy and Transport Committee. Official Report, 14 November 2023, col 17.

164. We also heard views on other aspects of "other matters"?

     • Education and behaviour change;

     • The strategy must inspire business and investment confidence; and

     • The strategy must account for local and geographical variations.

165. We heard the strategy should have a global outlook and play a beneficial role in supporting the transition to a circular economy internationally.ⁱNet Zero, Energy and Transport Committee, Official Report, 28 November 2023, col 9 and written submissions including Highlands & Islands Enterprise, Scotland?s International Development Alliance and SCIAF and Siembra Colombia. The strategy was viewed by stakeholders as an opportunity to accurately assess the impact of Scotland's consumption, which includes imported products and materials derived from complex global supply chains.ⁱNet Zero, Energy and Transport Committee, Official Report, 28 November 2023, col 9 and written submissions from Scotland?s International Development Alliance and SCIAF and Siembra Colombia. Despite the impacts of Scotland's consumption being felt internationally, current climate targets, which are based on territorial emissions, do not account for this offshoring.

166. In its 2020 publication "The Environment Strategy for Scotland: Vision and Outcomes"ⁱⁱⁱScottish Government (2020). The Environment Strategy for Scotland: Vision and Outcomes., the Scottish Government commits to ?...gather evidence on the nature of Scotland?s international environmental impact.?ⁱⁱⁱScottish Government (2020). The Environment Strategy for Scotland: Vision and Outcomes. It is not clear from the latest progress report on the strategy whether this step has been taken.^vScottish Government (2023). The Environment Strategy for Scotland: Second Progress Report to the Parliament. It does however say a further consultation on the strategy will be published in early 2024.

167. There was support for including a commitment to just transition principles in the Bill to ensure workers were not left behind in the journey to a more sustainable future. This included inserting wording to 'do no harm' with regards to Scotland's workforce and wider global impacts.ⁱNet Zero, Energy and Transport Committee. Official Report, 14 November 2023, col 19 and 31, written submissions including Friends of the Earth Scotland, Just Transition Partnership and UNISON Scotland.

168. Stakeholders said the strategy should support public understand of the meaning of a circular economy and individual's role in it through education and behaviour change.ⁱNet Zero, Energy and Transport Committee, Official Report, 21 November 2023, col 9; Net Zero, Energy and Transport Committee, Official Report, 7 November 2023, col 43 and written submissions from Highlands & Islands Enterprise and Met4Tech. It was recognised that this would be a significant challenge.ⁱⁱNet Zero, Energy and Transport Committee. Official Report, 26 September 2023, col 10.

169. Northern Ireland and Finland were both identified as examples of best practice in rolling out circular economy strategies with a strong emphasis on education to encourage behaviour change.ⁱWritten submissions from UKRI Interdisciplinary Centre for Circular Chemical Economy, Ostrero and Circular Economy Hub, University of Exeter.

170. However, we also heard evidence on the risk of putting disproportionate expectations of individuals and consumers within the Bill in relation to behavioural change. Stakeholders told us the greater onus should be on businesses, producers and service providers if the strategy is to create truly transformational change.ⁱNet Zero, Energy and Transport Committee, Official Report, 14 November 2023, cols 30 and 31; Net Zero, Energy and Transport Committee, Official Report, 28 November 2023, col 32 and written submissions including Wellbeing Economy Alliance Scotland, Scottish Youth Parliament and Reloop. For example, the Wellbeing Economy Alliance said?

     "Very little responsibility is put on businesses, especially the larger corporations that drive consumption, embed planned obsolescence in their products, and make a disproportionate impact on the nature and climate emergency."ⁱWritten submission from Wellbeing Economy Alliance Scotland.

171. The Scottish Youth Parliament said the Bill?

     "...should not focus on penalising consumers. Instead, it should concentrate on ensuring businesses and producers are responsible for their waste and have sustainable products and services."ⁱWritten submission from Scottish Youth Parliament.

172. One of the criticisms of the Finance and Public Administration Committee was that it considered the cost of education and communication programmes had been underestimated.^viiFinance and Public Administration Committee. 10th Report, 2023 (Session 6). Report on the Financial Memorandum for the Circular Economy (Scotland) Bill (SP Paper 484). The Minister told us "I have committed to revisiting the numbers in the financial memorandum that the FPAC highlighted to me".ⁱNet Zero, Energy and Transport Committee, Official Report, 5 December 2023, col 54.

173. The pathways to a circular economy at local and regional level vary significantly. We were told the strategy must account for this to achieve equality of opportunity to participate in and collectively enjoy the financial and environmental benefits of a circular economy.ⁱWritten submissions from Volunteer Scotland, South of Scotland Enterprise and Zero Waste Scotland. To achieve this, we heard the Scottish Government should engage with local communities and empower them with the resources required.ⁱWritten submissions from Volunteer Scotland, Resource Management Association Scotland and Janet Hunter. The operation of tool libraries, reuse hubs and other voluntary organisations were noted as having a particularly noticeable impact within local communities in enabling a 'sharing economy'.ⁱNet Zero, Energy and Transport Committee, Official Report, 28 November 2023, col 34 and written submissions from Volunteer Scotland, Consumer Scotland and Resource Management Association Scotland. Opportunities to reuse and repair should be as accessible as recycling. We heard that at present, many people do not have somewhere nearby, or know of somewhere nearby, to reuse, share and recycle many products.

174. Representatives of Scottish businesses said the strategy offered an opportunity to clarify policy direction which would enable businesses to plan and invest in their infrastructure and practices.ⁱNet Zero, Energy and Transport Committee, Official Report, 26 September 2023, cols 5 and 6. As part of our online engagement event with circular economy SMEs, we heard about the innovative ways businesses were implementing more sustainable and regenerative methods to support the transition to a circular economy. They told us the strategy provided an opportunity to support their growth and share best practice.ⁱⁱInformation from the Committee's online engagement event can be found in Annexe D of the report. Scotland's enterprise agencies and the SNIB indicated they were ready to support businesses to realise their ambitions around the circular economy.ⁱⁱⁱNet Zero, Energy and Transport Committee. Official Report, 31 October 2023, cols 36-38 and written submissions from Scottish Enterprise and South of Scotland Enterprise.

175. Section 1(3) lists characteristics of a desirable economy which the Scottish Government must "have regard to" in preparing the strategy. It was questioned whether "have regard to" was sufficiently strong language.ⁱNet Zero, Energy and Transport Committee, Official Report, 14 November 2023, col 16 and written submissions from Friends of the Earth Scotland, Scottish Environment LINK and Action to Protect Rural Scotland. In evidence, further suggestions for criteria in Section 1(3) were presented. These included?

     • Support regeneration of natural systems and takes account of the "biological economy";ⁱWritten submissions from Circular Economy Hub, University of Exeter and NatureScot.

     • Prioritise action at the top of the waste hierarchy; and

     • Account for international responsibilities.

176. Section 1(3) includes a range of characteristics of the circular economy the Scottish Government must consider in preparing the strategy.ⁱCircular Economy (Scotland) Bill, Section 1(3) We heard there should be more emphasis on actions further up the waste hierarchy, such as reducing consumption and promoting the reuse of materials.ⁱⁱNet Zero, Energy and Transport Committee. Official Report, 14 November 2023, col 17 and written submissions from Consumer Scotland, Zero Waste Scotland and Highlands & Islands Enterprise.

177. Scottish Environment LINK proposed adding?

     "(f) the production, distribution and end of life management of things is carried out in such a way as to avoid the leakage of materials into the environment,

     (g) polluting and harmful materials and chemicals, and materials which the production of which causes pollution are phased out,

     (h) the content of materials including harmful chemicals, is transparent and traceable to facilitate safe repurposing and reuse of goods and materials."

178. Friends of the Earth Scotland suggested replacing "things" in s1(3)(e) with "goods, products, and materials".ⁱⁱWritten submissions from Friends of the Earth Scotland (supplementary) and Scottish Environment LINK.

179. The Minister told us that "reducing consumption of materials is the fundamental driver for the strategy and for the national targets" and that the waste hierarchy would be embedded in the strategy.^ivNet Zero, Energy and Transport Committee, Official Report, 5 December 2023, col 4.

180. Stakeholders suggested Section 1(3) should include global considerations and the aim to 'do no harm'.ⁱNet Zero, Energy and Transport Committee, Official Report, 28 November 2023, col 8 and 13 and written submissions including Highlands & Islands Enterprise, Scotland?s International Development Alliance and SCIAF and Siembra Colombia. A joint submission from international charities Scottish Catholic International Aid Fund (SCIAF) and Siembra Colombia also suggested this provision could also be strengthened by placing a requirement on Scottish Ministers to ensure the strategy "must have regard for the goal of promoting international realisation of human rights in supply chains".ⁱWritten submission from SCIAF and Siembra Colombia.

181. We heard the strategy should be systems-wide if it was to be truly transformational.ⁱNet Zero, Energy and Transport Committee, Official Report, 28 November 2023, cols 30 and 31 and written submissions including Scottish Enterprise, Zero Waste Scotland and Resource Management Association Scotland. Section 1(4) says in preparing the strategy and its objectives, the Scottish Ministers should give consideration to "sectors and systems" and how they may deliver a circular economy.ⁱⁱCircular Economy (Scotland) Bill, Section 1. It does not state which sectors and systems must be covered by the strategy.

182. Some stakeholders were supportive of the strategy being underpinned by sector specific plans.ⁱNet Zero, Energy and Transport Committee. Official Report, 14 November 2023, col 17 and written submissions including Consumer Scotland, Marine Conservation Society and NFU Scotland. It would provide the clarity on the pathways for each sector and the challenges they faced in progress towards a circular economy recognising some industries would find transformation harder than others.ⁱWritten submissions including Consumer Scotland, Marine Conservation Society and NFU Scotland.

183. Sectors referenced in evidence included?

     • Construction;ⁱNet Zero, Energy and Transport Committee, Official Report, 28 November 2023, col 30, 40, 41 and written submission from Consumer Scotland, Built Environment Forum Scotland and UKRI Interdisciplinary Circular Economy Centre for Mineral-Based Construction Materials. - Subject to annual variations, we heard construction accounts for a significant proportion of waste in the Scottish economy.^viSEPA (2021) Waste from all sources ? Summary data 2021 and Net Zero, Energy and Transport Committee, Official Report, 28 November 2023, cols 30 and 31. The Committee was concerned at the imbalance in the Bill between obligations on industry and individuals. The Minister undertook to consider this further.ⁱNet Zero, Energy and Transport Committee, Official Report, 5 December 2023, col 6. The Minister said the Scottish Government considered construction a high priority in relation to the imposition of public waste reporting and committed to consider further evidence received by the Committee.ⁱNet Zero, Energy and Transport Committee, Official Report, 5 December 2023, cols 5 and 6 and 38. However, the latest draft of the Circular Economy and Waste Route Map reduces the specificity of what will be required of the construction industry and delays action when compared with the 2022 draft.^ixScottish Government (2022). Delivering Scotland's circular economy A Route Map to 2025 and beyond.

     • SoilsⁱNet Zero, Energy and Transport Committee, Official Report, 3 October 2023 col 42 and written submissions including NatureScot, Nourish Scotland and Scottish Environment LINK. - Soil , we were told, is the second highest source of landfilled waste, but more effective circular use of this as a resource could lead to climate and environmental benefits.ⁱNet Zero, Energy and Transport Committee, Official Report, 28 November 2023, col X and written submissions from Nourish Scotland, NatureScot and Scottish Environment LINK. Nourish Scotland said soil should be a "key pillar" of the Bill and Scottish Environment LINK suggested amendments to the Bill on soil.ⁱWritten submissions from Nourish Scotland and Scottish Environment LINK.

     • Fisheries, aquaculture and other marine sectors as well as sectors having significant impacts on the marine environment - we heard concerns about the impact that microplastics or 'nurdles' were causing in coastal communities in Scotland.^xiiiWritten submission from Scottish Environment LINK.

     • Agriculture;ⁱWritten submission, NFU Scotland and Quakers in Scotland.

     • Food;ⁱWritten submission, Scottish Wholesale Association, Consumer Scotland and Nourish Scotland.

     • Retail;ⁱWritten submission from West Lothian Council.

     • Manufacturing;ⁱWritten submission from West Lothian Council, Consumer Scotland, Quakers in Scotland, Built Environment Forum Scotland and UKRI Interdisciplinary Circular Economy Centre for Mineral-Based Construction Materials.

     • Textiles;ⁱNet Zero, Energy and Transport Committee, Official Report, 28 November 2023, col 40. and

     • Chemicals.ⁱNet Zero, Energy and Transport Committee, Official Report, 28 November 2023, col 40.

184. The Scottish Government said that many of these sectors also operate within a wider "system", which was the rationale for the phrasing used in Section 1(4).ⁱNet Zero, Energy and Transport Committee, Official Report, 5 December 2023, col 13. By looking at the system, regulations could target the wider supply chain and drive focus further up the waste hierarchy. ⁱNet Zero, Energy and Transport Committee, Official Report, 5 December 2023, col 13.

185. The legislation requiring a comparable strategy for reaching Scotland?s climate change emission targets includes a list of the sectors of the economy which must be covered. The Climate Change (Scotland) Act 2009^xxiiClimate Change (Scotland) Act 2009, Sections 35-36. says the Scottish Government's target delivery document, the Climate Change Plan, must include specific chapters in relation to sectors of the economy and the emissions produced.

186. The most recent iteration of the Plan provides a list of the Scottish Government's priority sectors?

     ?As has been recommended by a number of stakeholders, including the Advisory Group on Economic Recovery, the Decoupling Advisory Group and Scottish Environment Link, we will embed circular economy principles into our wider green recovery, prioritising areas with the biggest opportunities: construction; agriculture/food and drink; energy and renewables; procurement; skills and education; and plastics.?^xxiiiScottish Government (2020). Update to the Climate Change Plan 2018 ? 2032 Securing a Green Recovery on a Path to Net Zero.

187. In March 2021, the Scottish Government wrote to the Session 5 Environment, Climate Change and Land Reform Committee and said, "Work is underway on the development of roadmaps for each of the priorities listed, which will be taken forward alongside the development of the 2025 Routemap."^xxivLetter from the then Cabinet Secretary for Environment, Climate Change and Land Reform to the Conveners of the Session 5 Environment, Climate Change and land Reform Committee, Economy, Energy and Fair Work Committee, Local Government and Communities Committee and Rural Economy and Connectivity Committee in response to their reports on the draft Update to the Climate Change Plan 2018 - 2032 - 24 March 2021

188. A draft routemap was produced for consultation in 2022^ixScottish Government (2022). Delivering Scotland's circular economy A Route Map to 2025 and beyond. and then again in 2024.^xxviScottish Government (2024) Scotland?s Circular Economy and Waste Route Map to 2030 Consultation. Neither mention the sector specific roadmaps for the priority areas listed by the Scottish Government.

189. Section 1(5) indicates the strategy "must be prepared with a view to achieving consistency, so far as practicable, between the objectives and plans set out in the strategy and?

     • the climate change plan prepared under Section 35 of the Climate Change (Scotland) Act 2009;ⁱCircular Economy (Scotland) Bill, Section 1(5)(a)

     • the environmental policy strategy prepared under Section 47 of the UK Withdrawal from the European Union (Continuity) (Scotland) Act 2021;ⁱⁱCircular Economy (Scotland) Bill, Section 1(5)(b) and

     • any other strategy or plan which the Scottish Ministers consider to be relevant."ⁱⁱⁱCircular Economy (Scotland) Bill, Section 1(5)(c)

190. Stakeholders were supportive of this but it was also noted the circular economy strategy may have conflicting ambitions to other policies.^ivNet Zero, Energy and Transport Committee, Official Report, 28 November 2023, col 3 and written submissions including Moray Firth Coastal Partnership, Stirling Council, Malcolm Rae, Scottish Environment LINK, The City of Edinburgh Council and Scotland?s International Development Alliance. The hierarchy in such cases is not clear.

191. There was support for specific reference to the Climate Change Plan on the face of the Bill, noting the importance of coherence with wider net zero objectives.^ivWritten submissions including RTPI Scotland, Highlands & Islands Enterprise and Aberdeenshire Council.

192. However, we also heard Section 1(5) needed to also reflect the cross-cutting nature of the circular economy by creating linkages across other strategies and policy areas. Suggestions included?

     • Scottish Biodiversity Strategy ^ivNet Zero, Energy and Transport Committee, Official Report, 28 November 2023, col 3 and written submissions including RTPI Scotland, ROCKWOOL Ltd and UK Environmental Law Association. - There was support for specific alignment with the biodiversity strategy.

     • National Strategy for Economic Transformation and 'New Deal for Business'^ivWritten submissions including Scottish Wholesale Association, Scottish Chambers of Commerce and Glasgow City Council.- businesses said embedding economic principles would ensure they were at the heart of the Scottish Government's considerations around the strategy. Creating alignment was thought to help avoid unintended consequences.

     • UK-wide developments^ivWritten submissions from Biffa Group Group and Company Shop Group,Scottish Environmental Services Association, and British Soft Drink Association. - such as Extended Producer Responsibility and an expected interoperable deposit return scheme.

193. The Committee is also of the view the strategy must align with the New Deal with Local Government ? Verity House Agreement.^ixScottish Government (2023). New Deal with Local Government ? Verity House Agreement.

194. We heard the phrase "have regard to" was weak, an alternative suggestion was "The Scottish Ministers must act in accordance with the circular economy strategy in making policies (including proposals for legislation) unless particular circumstances dictate otherwise."ⁱWritten submission from Scottish Environment LINK.

195. Section 2 of the Bill says the Scottish Ministers must publish a draft strategy and consult with?

     • such persons as they consider appropriate; and

     • the general public.ⁱCircular Economy (Scotland) Bill, Section 2.

196. There was support for consultation on the strategy.ⁱⁱNet Zero, Energy and Transport Committee, Official Report, 28 November 2023, col 13 and written submissions including SEPA, Huhtamaki UK Ltd and Biffa Group Group and Company Shop Group. It was thought stakeholder engagement should begin early in the policy formulation process, and continue once the strategy was in place to monitor the impacts from its implementation on a rolling basis.ⁱⁱWritten submissions from Resource Management Association Scotland and Biffa Group Group and Company Shop Group.

197. It was suggested the Bill needed to place more specific obligations on the Scottish Ministers to consult with industries and sectors as part of developing the strategy.ⁱⁱNet Zero, Energy and Transport Committee, Official Report, 28 November 2023, col 13 and written submissions from Charity Retail Association, British Glass and The Vending & Automated Retail Association. This included looking beyond traditional waste management audiences, and including international stakeholders .ⁱⁱNet Zero, Energy and Transport Committee, Official Report, 28 November 2023, col 13 and written submissions from SEPA, Scottish Grocers' Federation, SEDA UK and Charity Retail Association.

198. Section 3(1) sets out conditions and procedures for publication of the strategy, including laying this in the Scottish Parliament. Section 3(2) states the requirement to publish a strategy in Section 3(1) "must be complied with before the end of the period of 2 years beginning with the day on which this Section comes into force".ⁱCircular Economy (Scotland) Bill, Section 3. However, the date on which this provision will come into force is not stipulated in the Bill and will be determined through regulations which are not subject to any parliamentary procedure.ⁱⁱCircular Economy (Scotland) Bill, Explanatory Notes. This means there is no clear date by which the first strategy should be delivered.

199. We heard concerns from the UK Environmental Law Association that this should be expedited.ⁱⁱⁱWritten submission from UK Environmental Law Association.

200. Furthermore, it is important that the Scottish Parliament has an opportunity to consider whether the strategy is capable of delivering the transformational change needed to transition to a circular economy. We note this is common practice for other statutory strategies such as the Climate Change Plan.^ivClimate Change (Scotland) Act 2009, Sections 35 and 36.

201. Section 4 of the Bill lays out duties for how the Scottish Government must review its strategy. Section 4(2) stipulates that the Scottish Government must revise its strategy at least every five years.ⁱCircular Economy (Scotland) Bill, Section 4.

202. The provision of a five-year cycle for the review of the strategy, with the flexibility to refresh sooner if appropriate, was broadly accepted by stakeholders.ⁱⁱWritten submissions including Scottish Chambers of Commerce, Scottish Wholesale Association and Biffa Group Group and Company Shop Group. However, we heard the need to renew the strategy to reflect current economic and technological landscape must be balanced with the need for long-term certainty to allow confident industry investment.ⁱⁱWritten submission from Scottish Environmental Services Association, The Food and Drink Federation, Circular Communities Scotland and Scottish Chambers of Commerce

203. Section 5 of the Bill sets out procedures for the Scottish Government to undertake in reporting progress on delivery of proposed actions in the circular economy strategy. Section 5(1) specifies that the Scottish Ministers must report "as soon as practicable" after the end of a reporting period. Section 5(3) sets the reporting deadline at 30 months.ⁱCircular Economy (Scotland) Bill, Section 5. Stakeholders were supportive of regular reporting requirementsⁱⁱNet Zero, Energy and Transport Committee. Official Report, 14 November 2023, col 17 and written submissions from Circular Communities Scotland and SEPA. with some suggesting this should happen annually.ⁱⁱWritten submission from Marine Conservation Society.

204. Stakeholders were clear that a robust framework for monitoring and evaluation was needed.ⁱⁱNet Zero, Energy and Transport Committee. Official Report, 14 November 2023, col 19 and written submissions including South of Scotland Enterprise, Glasgow City Council and Friends of the Earth Scotland. It was proposed that this monitoring framework should include?

     • Detail of how the strategy and associated actions were contributing to the targets proposed at Sections 6 and 7 of the Bill;ⁱⁱWritten submission from Scottish Environment LINK.

     • Clearly defined outcomes narrating actors responsible for delivery;ⁱⁱNet Zero, Energy and Transport Committee. Official Report, 26 September 2023, cols 5 and 6 and written submissions including SEPA, Scottish Youth Parliament and Glasgow City Council.

     • A suite of performance indicators that were evidence-based and established using a common methodology;ⁱⁱWritten submissions from SEPA and South of Scotland Enterprise. and

     • A strong focus on data collection to inform the ongoing design of the strategy into the future.ⁱⁱWritten submissions from UKRI Interdisciplinary Circular Economy Centre for Mineral-Based Construction Materials, Zero Waste Scotland and Highlands & Islands Enterprise.

205. There were also strong calls for vigorous governance of the circular economy strategy provided by an independent oversight body.ⁱⁱNet Zero, Energy and Transport Committee. Official Report, 14 November 2023, col 19 and written submissions including Cornelis Van Der Dussen, Scottish Environment LINK and Binn Group (Resource Management Association Scotland). For example, the Climate Change Committee is tasked with providing scrutiny of the Scottish Government's progress in meeting its climate change targets. There was support for a similar model to be deployed for the circular economy strategy. Scottish Environment LINK suggested the Scottish Government adopt a similar model of governance to that set out in the new Litter and Flytipping Strategy.ⁱⁱⁱWritten submission from Scottish Environment LINK and Scottish Government (2023). National Litter and Flytipping Strategy.

206. The Scottish Government was of the view that the role and function being proposed were already being undertaken by Zero Waste Scotland and Environmental Standards Scotland. Zero Waste Scotland was classified as a public sector organisation last year and the Policy Memorandum accompanying the Bill says?

     "... our assumption is that any Scottish Government obligations, such as strategy or targets, set in this Bill would be likely to fall within the scope of [Environmental Standards Scotland]?s work."^xiPolicy Memorandum, paragraphs 131 and 133.

224. Provisions in Section 6 and 7 of the Bill confer enabling powers to the Scottish Ministers to create statutory circular economy targets in secondary legislation. Future regulations to establish targets are subject to the affirmative procedure.ⁱCircular Economy (Scotland) Bill, Section 6(4) The Policy Memorandum says the introduction of statutory targets "provides a strong focus for action and certainty in direction of travel across policy".ⁱⁱPolicy Memorandum, paragraph 47.

225. Section 6(1) of the Bill states that "the Scottish Ministers may by regulations make provision imposing targets on the Scottish Ministers relating to developing a circular economy".ⁱCircular Economy (Scotland) Bill, Section 6 (1). The draft 2030 Routemap states?

     ?From 2025, we will set new circular economy targets to at least 2030. New targets may include consumption, reducing waste, reuse and recycling locally and nationally, and consider both material-specific and emission-based targets. In addition, a monitoring and indicator framework will be developed over 2024/25. This will allow more holistic tracking of Scotland?s consumption levels and wider measures of circularity?.

226. There was support among stakeholders for the introduction of statutory circular economy targets.ⁱⁱNet Zero, Energy and Transport Committee, Official Report, 28 November 2023, col 15 and written submissions including The City of Edinburgh Council, RTPI Scotland and Ostrero, Aberdeenshire Council and Consumer Scotland. Targets were also viewed as an opportunity to drive behaviour change further up the waste hierarchy.ⁱⁱNet Zero, Energy and Transport Committee. Official Report, 14 November 2023, cols 20 and 21 and written submissions including South of Scotland Enterprise, Highlands & Islands Enterprise and Zero Waste Scotland. However, some stakeholders expressed concerns about additional requirements placed on businesses and local authorities from binding targets and called for consultation to mitigate against unintended consequences.ⁱⁱWritten submissions including Scottish Retail Consortium, Scottish Grocers' Federation and Glasgow Chamber of Commerce.

227. We heard that targets in isolation would not achieve desired outcomes. It was suggested targets should be aligned with and specifically referenced in the strategy to be created at section 1.ⁱⁱNet Zero, Energy and Transport Committee. Official Report, 14 November 2023, col 20 and written submissions from Marine Conservation Society and Scottish Land & Estates.

241. Like Section 1(3), Section 6(2) lists a set of characteristics desirable in a circular economy which the Scottish Government "must have regard to" in setting the targets. It was questioned whether "have regard to" was sufficiently strong language.ⁱWritten submissions including Scottish Environment LINK, Friends of the Earth Scotland and Action to Protect Rural Scotland. Action to Protect Rural Scotland suggested this should be amended to "....must seek to achieve an economy in which....".ⁱWritten submission from Action to Protect Rural Scotland.

242. As with Section 1(3) it was suggested this provision could also be strengthened by placing a requirement on Scottish Ministers to consider international impacts of the Scottish economy and just transition principles.ⁱⁱⁱWritten Submission from SCIAF and Siembra Columbia

243. Section 6(1) allows Ministers to set targets for a circular economy in regulations subject to the affirmative procedure.

244. We explored whether the Scottish Government had considered the use of a super- affirmative procedure for setting targets. The Minister said this was not the intention.ⁱNet Zero, Energy and Transport Committee, Official Report, 5 December 2023, Col 11.

245. Despite the limitations in comparison to primary legislation, super-affirmative procedure allows for more time for consideration of instruments than the affirmative procedure. It is possible as suggested above that consumption based emission targets could be set. If these were set through secondary legislation, it is unclear how they might interact with existing carbon emission reduction targets. This interaction would need to be explored by Parliament in coming to conclusions on proposed regulations. There are also a questions over the parity of targets set using different legislative procedures.

246. Section 6(5) sets out that before introducing secondary legislation establishing statutory targets, the Scottish Ministers must consult with?

     • "such persons as they consider appropriate; and

     • the general public."ⁱCircular Economy (Scotland) Bill, Section 6 (5).

247. Many stakeholders emphasised the importance of extensive and meaningful consultation to help shape targets.ⁱⁱNet Zero, Energy and Transport Committee. Official Report, 3 October 2023, col 34 and written submissions including CIWM Scotland, Scottish Grocers' Federation and Scottish Wholesale Association, Excel Vending Ltd, SEDA UK and Benders Paper Cups. Stakeholders that commented specifically on the provision of a consultation process set out in Section 6 of the Bill were content with this requirement.ⁱⁱNet Zero, Energy and Transport Committee. Official Report, 14 November 2023, col 23 and written submissions from The Law Society of Scotland, Scottish Wholesale Association and Evangelical Alliance Scotland.

248. When setting climate change targets under the Climate Change (Scotland) Act 2009, Ministers must seek and act upon advice from the Climate Change Committee. The Act also mandates a role for Parliament in approving a draft of the strategy on policies and proposals to meet the targets. The Circular Economy (Scotland) Bill does not include such detail on consultation and scrutiny processes for the targets or the strategy.

249. Section 7 provides the Scottish Ministers with a regulation-making power to establish a process for how targets will be monitored and progress will be reported. Section 7(1) states that regulations introduced relating to statutory targets must also set out arrangements for?

     • monitoring progress towards achieving targets; and

     • reporting on progress towards achieving targets.ⁱCircular Economy (Scotland) Bill, Section 7 (1).

250. The Policy Memorandum says that the Scottish Government will, prior to the introduction of targets, consult on and develop a monitoring and indicators framework to supplement a regime of statutory targets.ⁱⁱPolicy Memorandum, paragraph 48. The Scottish Government says the framework will allow for a more effective tracking of the economic and environmental impacts of targets.ⁱⁱⁱPolicy Memorandum, paragraph 45.

251. Stakeholders broadly welcomed the general principles of monitoring requirements for statutory targets^ivWritten submissions including South of Scotland Enterprise, RTPI Scotland, CIWM Scotland. and the principle of creating a robust monitoring framework to underpin it.^ivWritten submissions including Scottish Enterprise, Consumer Scotland and The Law Society of Scotland. However, a number of witnesses stressed that it was important the framework included economic, social and environmental indicators to allow stakeholders and the public to transparently understand if the targets were being achieved.^ivWritten submissions from Zero Waste Scotland, Environmental Standards Scotland and SEPA.

252. Some respondents to the call for views noted the importance of effective enforcement in relation to targets. ⁱWritten submissions including Stephen Henry, Highlands & Islands Enterprise and Reloop. However, the UK Environmental Law Association noted that there remained practical questions about what would be the consequences of failing to meet the targets.ⁱⁱWritten Submission from UK Environmental Law Association.

258. Section 8 modifies the Climate Change (Scotland) Act 2009 by inserting Section 78A which sets out regulation-making powers to restrict the disposal of unsold consumer goods.ⁱCircular Economy (Scotland) Bill, Section 8. Regulations made under Section 8(2) would be subject to the affirmative procedure.ⁱⁱCircular Economy (Scotland) Bill, Section 8 (2). The Delegated Powers and Law Reform Committee accepted this in principle as it was clear from the provisions what the power could be used to do.ⁱⁱⁱDelegated Powers and Law Reform Committee. 8th Report, 2023 (Session 6). Delegated powers in the Circular Economy (Scotland) Bill at Stage 1 (SP Paper 461).

259. The Policy Memorandum says that future regulations will be brought forward after additional research is undertaken to understand the flow of unsold consumer goods. It also says that targeted products will be subject to stakeholder engagement and detailed impact assessments. Through this process, the Scottish Government says it will establish definitions to be used within regulations, including any details around exemptions and enforcement.^ivPolicy Memorandum, paragraph 52.

260. There was support for this measure. We heard it could increase reuse, disincentivise over-production, and produce societal benefits of redistribution (for example food and hygiene products).^vNet Zero, Energy and Transport Committee. Official Report, 14 November 2023, cols 25 and 27; Net Zero, Energy and Transport Committee. Official Report, 3 October 2023 cols 35 and 36 and written submissions including In Kind Direct,Fareshare Scotland and Scottish Youth Parliament.

261. Those who disagreed with the proposals highlighted potential business impacts or the potential for unintended consequences (such as exporting goods abroad).^vWritten submissions including Scottish Retail Consortium, Scottish Chambers of Commerce and Scottish Grocers' Federation. Respondents stressed the importance of requirements feeding back into business practices to influence stock management and product design, and avoid overproduction of good or disposal routes such as as charities being flooded with unwanted goods creating a financial burden.^vNet Zero, Energy and Transport Committee. Official Report, 26 September 2023, col 14; Net Zero, Energy and Transport Committee. Official Report, 3 October 2023, cols 35 and 36 and written submission from UKRI Interdisciplinary Centre for Circular Chemical Economy, Consumer Scotland and Charity Retail Association. Some respondents raised issues such as product safety and the re-circulation and use of returned goods.^vNet Zero, Energy and Transport Committee. Official Report, 26 September 2023, cols 19 and 20; Net Zero, Energy and Transport Committee, Official Report, 7 November 2023, col 47 and written submissions including Electrical Safety First, Scottish Retail Consortium and Society of Chief Officers of Trading Standards in Scotland.

262. Section 78A(1) provides regulation-making powers for the Scottish Ministers to introduce restrictions on unsold consumer goods.ⁱCircular Economy (Scotland) Bill, Section 8 (2) These would be subject to the affirmative procedure.

263. The following benefits of potential restrictions on the disposal of unsold goods were suggested to us?

     • They could encourage sustainable business practices and address problems of overproduction;ⁱNet Zero, Energy and Transport Committee. Official Report, 3 October 2023, cols 35 and 36 and written submissions including Circular Communities Scotland, Consumer Scotland and SEPA.

     • I They were cost effective for businesses, as they could capture more value in materials and products by extending their lifecycles and avoid unnecessary cost of overproduction through better stock management.ⁱNet Zero, Energy and Transport Committee. Official Report, 3 October 2023, col 38 and written submissions including Scottish Youth Parliament, Highlands & Islands Enterprise and Consumer Scotland.

     • New restrictions on unsold goods could place a greater emphasis on regenerating products, helping to kick start the market conditions for a thriving redistribution sector to emerge in Scotland.ⁱWritten submission from Fareshare Scotland.

264. Some stakeholders highlighted examples of reluctance to adopt more circular business practices and there was support for tighter requirements.ⁱNet Zero, Energy and Transport Committee. Official Report, 14 November 2023, cols 30 and 31 and written submissions from Met4Tech and Circular Communities Scotland. Anti-waste legislation in France was presented as an example of good practice and proof that these measures can be successful.ⁱNet Zero, Energy and Transport Committee. Official Report, 14 November 2023, col 26 and written submissions including South of Scotland Enterprise, In Kind Direct and The City of Edinburgh Council. However, representatives of Scottish businesses said that companies were already acting to avoid unnecessary amounts of surplus products or to destroy materialsⁱNet Zero, Energy and Transport Committee. Official Report, 26 September 2023, col 13-15. and that unsold goods only constitute a small proportion of the overall amount of goods flowing within the economy.ⁱNet Zero, Energy and Transport Committee. Official Report, 14 November 2023, col 27.

266. There was a clear desire for the Bill to enhance partnerships between the private and charitable sectors.ⁱNet Zero, Energy and Transport Committee. Official Report, 3 October 2023, col 38 and written submission from South of Scotland Enterprise. Charitable and distribution organisations were positive about their potential roleⁱⁱWritten submissions from Fareshare Scotland, Olio Exchange Limited and In Kind Direct. but noted pressures such as capacity issues, additional costs for transportation and liability for the disposal of unsaleable stock .ⁱⁱWritten submissions from Fareshare Scotland, Charity Retail Association and In Kind Direct. It was also suggested regulations should not have an adverse effect on already positive enterprises and partnerships.ⁱNet Zero, Energy and Transport Committee. Official Report, 26 September 2023, col 14; Net Zero, Energy and Transport Committee. Official Report, 3 October 2023, col 39 and written submission from UKRI Interdisciplinary Centre for Circular Chemical Economy, In Kind Direct,The Law Society of Scotlandand Charity Retail Association.

267. Business and retail representatives said there was uncertainty within the sector about proposed restrictions and how they might lead to unintended consequences for businesses, including additional costs.ⁱNet Zero, Energy and Transport Committee. Official Report, 26 September 2023, cols 13, 14 and 16 and written submission from the Scottish Grocers' Federation.

268. Section 78A(2) defines "consumer goods" as "goods intended to be purchased, used or consumed by a consumer."ⁱCircular Economy (Scotland) Bill, Section 8. "Consumer" is later defined at proposed Section 78A(4) as?

     • An individual who i) ?purchases, uses or receives goods or services which are supplied in the course of a business carried on by the person supplying them?, and (ii) is ?not purchasing, using or receiving the goods or services wholly or mainly in the course of a business carried on by the individual?; or

     • A business "which purchases, uses or receives goods or services which are supplied in the course of a business carried on by the person supplying them."ⁱⁱCircular Economy (Scotland) Bill, Section 8(2).

269. There were some concerns about the ambiguity of this wording and the need for the Scottish Government to clarify what might fall within the scope of this provision.ⁱⁱⁱNet Zero, Energy and Transport Committee. Official Report, 26 September 2023, cols 13, 17, 18 and Business representatives raised concerns about the broad definition and called on the Scottish Government to clarify what was potentially within the scope of future regulations.ⁱⁱⁱNet Zero, Energy and Transport Committee. Official Report, 26 September 2023, cols 13, 17, 18 and written submissions from Scottish Retail Consortium and The Food and Drink Federation. The Scottish Retail Consortium said the current interpretations could "cover any item sold in Scotland" and questioned how the terms would be framed and caveated.ⁱⁱⁱNet Zero, Energy and Transport Committee. Official Report, 26 September 2023, col 13. Conversely, there was support for having a broad definition of consumer goods on the face of the Bill.^ivWritten submissions from Action to Protect Rural Scotland and Scottish Environment LINK.

270. The focus on "consumer" goods was also thought to focus too readily on the end of the product life-cycle and we heard calls for restrictions to be extended across all links of the supply chain.ⁱⁱⁱNet Zero, Energy and Transport Committee. Official Report, 14 November 2023, col 25 and 27 and written submission from Action to Protect Rural Scotland and Scottish Environment LINK.

271. The Minister clarified in her evidence to the Committee that the intention would be for regulations to be targeted at durable goods only and it was not the intention to use these powers to restrict the disposal of unsold food.^viiiNet Zero, Energy and Transport Committee, Official Report, 5 December 2023, col 25.

272. The Scottish Government has not specified in the Policy Memorandum how it would use its enabling powers. In correspondence the Minister told us, "...any initial SSIs under this power would focus on those products with greatest environmental impact".^ixLetter from the Minister for Green Skills, Circular Economy and Biodiversity to the Net Zero, Energy and Transport Committee on the Circular Economy Bill - 13 October 2023. The draft 2030 Routemap says implementation of the power will "be built on further research and co-design with stakeholders and businesses"^xScottish Government (2024) Scotland?s Circular Economy and Waste Route Map to 2030 Consultation.. It notes the goods identified as priority in French legislation (where rules have been imposed for clothing, cosmetics, hygiene products and electrical items) and anticipates a similar approach. It continues "We will commission research in 2024 into these and other potential products, to inform consultation on regulations in 2026.?^xScottish Government (2024) Scotland?s Circular Economy and Waste Route Map to 2030 Consultation.

273. Evidence suggested that the goods with the biggest life cycle impact should be prioritised.ⁱWritten submissions from Scottish Environment LINK Stakeholders also made specific suggestions for goods to be targeted in future regulations?

     • Construction materials;ⁱWritten submissions from UKRI Interdisciplinary Circular Economy Centre for Mineral-Based Construction Materials, CIWM Scotland, Resource Management Association Scotland.

     • Textiles;ⁱⁱNet Zero, Energy and Transport Committee, Official Report, 28 November 2023, col 51 and written submissions including Resource Management Association Scotland, Amazon UK and Scottish Environment LINK.

     • Electronic and IT equipment;ⁱⁱNet Zero, Energy and Transport Committee. Official Report, 21 November 2023, col 14 and written submissions including CIWM Scotland, Scottish Environment LINK and Quakers in Scotland.

     • Household furniture;ⁱⁱWritten submissions including Biffa Group Group and Company Shop Group., CIWM Scotland and Amazon UK. and

     • Food.ⁱⁱWritten submissions including Scottish Environment LINK, Fareshare Scotland and Malcolm Rae.

287. Section 78A(3) of the Bill is used to provide a definition of what is considered to be "unsold". The Bill says that "consumer goods are ?unsold? if they have not been sold to, or have been returned by, a consumer."ⁱCircular Economy (Scotland) Bill, Section 8(2). Section 78A(5)(c) provides the Scottish Ministers with powers to set out further details about what would constitute "unsold" goods within the scope of individual regulations.ⁱCircular Economy (Scotland) Bill, Section 8(2).

288. Some thought the wording used in relation to Section 78A(3) was unclear and called on the Scottish Government to provide further clarification about what would fall within this definition.ⁱⁱⁱWritten submissions from Met4Tech and UKRI Interdisciplinary Centre for Circular Chemical Economy. The UK Research and Innovation Interdisciplinary Centre for Circular Chemical Economy said?

     "Every item will be ?unsold? until a customer wishes to purchase them. At which point in time does the provision establish that a company becomes liable to deal with the unsold good in specific ways? Additionally, there might be a need to differentiate between goods and how different products can be safely reused, recycled, or refurbished and those that must be disposed of responsibly is crucial."

289. Section 78A(4) provides a definition of "consumer" for the purposes of the Bill. Under these provisions, a consumer is considered to be?

     • An individual who i) ?purchases, uses or receives goods or services which are supplied in the course of a business carried on by the person supplying them?, and (ii) is ?not purchasing, using or receiving the goods or services wholly or mainly in the course of a business carried on by the individual?; or

     • A business "which purchases, uses or receives goods or services which are supplied in the course of a business carried on by the person supplying them."ⁱCircular Economy (Scotland) Bill, Section 8(2).

290. The Society of Chief Officers of Trading Standards in Scotland noted that the definition of consumer was similar to the wording used in the Consumer Scotland Act 2020. They questioned why the phrase ?which is no larger than a small business? set out in the 2020 Act was omitted from the Bill.ⁱⁱWritten submission from Society of Chief Officers of Trading Standards in Scotland (SCOTSS).

291. The focus on "consumer" goods was also thought to focus too readily on the end of the product lifecycle and we heard calls for restrictions to be extended across all links of the supply chain.ⁱⁱNet Zero, Energy and Transport Committee. Official Report, 14 November 2023, cols 25 and 27 and written submission from Action to Protect Rural Scotland and Scottish Environment LINK. The Committee notes however that the Bill does not appear to explicitly require the consumer to be the end-consumer or user of goods.

292. Section 78A(5) lists the potential content that regulations "may" have. These are?

     • Details of persons required to comply with prohibitions or restrictions;

     • Meanings of "disposal" and "unsold" in the context of future regulations;

     • Exemptions from the regulations; and

     • The designation of an enforcement authority and details of how their role will be undertakenⁱCircular Economy (Scotland) Bill, Section 8(2)..

293. A number of stakeholders called for greater clarity on what would fall within the scope of this provision.ⁱWritten submissions including Foodservice Packaging Association, Aberdeen City Council and Action to Protect Rural Scotland. We also heard about how restrictions must avoid exporting waste as a form of disposal.ⁱWritten submissions from South of Scotland Enterprise and Scottish Youth Parliament. The Charity Retail Association called for clarity on what would be expected from charity and third sector organisations in disposing of unsaleable goods they received.ⁱWritten submission from Charity Retail Association.

294. Consumer Scotland said there would be ?challenges in achieving the correct balance between maximising reuse of products and raw materials while ensuring that safety and acceptable product quality is retained?, and that ?Where goods are unsafe, counterfeit, have been subject to recall procedures or are otherwise unfit for consumption it is important that they do not enter the supply chain. However, where possible, value may be extracted from their components?.ⁱWritten submission from Consumer Scotland It encouraged close consultation with trading standards bodies and the UK Office for Product Safety and Standards in the development of detailed proposals.

295. We heard there were considerations over the handling of some types of unsold goods such as contamination, hygiene, legal or fire risk, and electrical or chemical safety.ⁱⁱNet Zero, Energy and Transport Committee. Official Report, 26 September 2023, col 20 and 24, and written submissions from Resource Management Association Scotland, Society of Chief Officers of Trading Standards in Scotland, Electrical Safety First, Charity Retail Association and Amazon UK. For example, a representative of the Scottish Retail Consortium said mouldy clothing would not be appropriate for resale and should be recycled instead.ⁱⁱNet Zero, Energy and Transport Committee. Official Report, 26 September 2023, col 19 and written submission Scottish Retail Consortium. Similarly the Resources Management Association Scotland raised safety concerns in relation to chemicals and Persistent Organic Pollutants (POPs). They said there was a need to ensure that when recirculating goods, the skills and systems are in place to segregate materials which contain POPs.^ivWritten submissions from Resource Management Association Scotland.

296. Submissions suggested that the negative impacts of restrictions would be most acutely felt by small and medium sized enterprises (SMEs) who would face particular difficulties with the costs of complying fully with restrictions due to a lack of administrative capacity or infrastructure.ⁱⁱWritten submissions including Federation of Small Businesses, Scottish Grocers' Federation, Evangelical Alliance Scotland and UKRI Interdisciplinary Centre for Circular Chemical Economy. The importance of support and guidance for SMEs was emphasised.ⁱⁱWritten submissions from Consumer Scotland and South of Scotland Enterprise.

297. The Minister said it was "... possible to draft regulations so that they target the businesses that have the most environmental impact, and that is the intention".^viiNet Zero, Energy and Transport Committee, Official Report, 5 December 2023, col 22. She said?

     "The intention is that we cover larger businesses. It is all about the significance of the impact and about proportional implementation. Where such measures have been implemented, they have concerned large companies that produce significant amounts of goods. The bill is not at all intended to target small or medium-sized enterprises."^viiNet Zero, Energy and Transport Committee, Official Report, 5 December 2023, col 21.

298. Section 78A(6) sets out that provisions about enforcement under subsection 5(f) may include provision?

     • "enabling functions of the enforcement authority to be carried out on its behalf by persons authorised in accordance with the regulations;

     • about the keeping of records and their production to the enforcement authority;

     • about offences in relation to failures to comply with requirements in the regulations; and

     • for the giving of notices by or on behalf of the enforcement authority offering a person the opportunity of discharging any liability to conviction for an offence under the regulations by payment of a fixed penalty."ⁱCircular Economy (Scotland) Bill, Section 8 (2).

299. The Financial Memorandum estimates the cost of monitoring, based on three investigations per year, to be around ?30,000. It states, "A more proactive regulatory regime, including inspecting and auditing practice, would cost around ?200,000 per year."ⁱⁱFinancial Memorandum, paragraph 12 Some stakeholders told us that if regulations were to be successful they must be robustly enforced. This included providing the relevant authorities with the necessary tools and resources to effectively monitor compliance and take enforcement action where appropriate.ⁱⁱⁱWritten submissions from Circular Communities Scotland and Malcolm Rae. However, the Federation of Small Businesses said a light touch to enforcement, focusing on compliance, not penalty, should be adopted.ⁱⁱⁱWritten submission from Federation of Small Businesses.

300. SEPA told us that they had not held discussions with the Scottish Government about becoming the enforcement authority for these provisions.^vNet Zero, Energy and Transport Committee, Official Report, 3 October 2023, cols 37 and 38. They said "the level of proactive and reactive work would depend on the resources available for this new duty. There is no obvious mechanism for cost recovery so this work would most likely be funded from SEPA?s Grant in Aid settlement."ⁱⁱⁱSupplementary written submission from SEPA. SEPA said this meant that in practice they would need intelligence from the public, whistleblowers and the media to support their investigatory work.ⁱⁱⁱSupplementary written submission from SEPA.

301. Section 78A(7) sets out that the Scottish Ministers must consult on any future regulations with "such persons as they consider appropriate."ⁱCircular Economy (Scotland) Bill, Section 8 (2).

302. Evidence emphasised the importance of early engagement with business to help shape future regulations and make sure they were not overly burdensome.ⁱⁱWritten submissions from Biffa Group Group and Company Shop Group, Society of Chief Officers of Trading Standards in Scotland and Federation of Small Businesses. Regulations also needed to be underpinned by robust data and guidance that assessed the impacts of proposed measures.

303. It was noted that the Scottish Government must consult with the charitable and third sectors on future regulations to ensure they were not creating unintended consequences. Representatives of charitable organisations told us that consultation with the charitable sector was important to ensure the Scottish Government can "understand their needs and their capacity to accept surplus product."ⁱⁱWritten submissions from Charity Retail Association and In Kind Direct.

304. The Scottish Government told us they believed regulations on disposal of unsold goods could be drafted so as not to require an exemption from the Internal Market Act , but stressed this was subject to the types of good and restrictions subject to regulations.ⁱNet Zero, Energy and Transport Committee, Official Report, 5 December 2023, col 41. While the Committee acknowledges there have been discussions at official and Ministerial level about the provisions of the Bill through the Resource and Waste Common Framework, we are concerned there had been no engagement with or advice sought from the Office for the Internal Market on the Bill.ⁱNet Zero, Energy and Transport Committee, Official Report, 5 December 2023, cols 4-43 and Letter from the Minister for Green Skills, Circular Economy and Biodiversity on Circular Economy (Scotland) Bill - 18 January 2024

317. Section 9 of the Bill inserts Section 87A into the Climate Change (Scotland) Act 2009. This gives the Scottish Ministers powers to set additional charges for single-use items. Section 87A(2) states that regulations made under this Section may in particular include provision for aspects such as?

     • The circumstances and suppliers required to apply new charges;

     • The minimum fee to be levied on single-use items;

     • Net proceeds and how they will be generated and applied;

     • Details about enforcement including the authorities tasked with overseeing the scheme.ⁱCircular Economy (Scotland) Bill, Section 9.

318. The Policy Memorandum says the policy objective behind the imposition of additional charges is to discourage consumption of single-use products and, in doing so, reduce their harmful environmental impacts.ⁱⁱPolicy Memorandum, paragraph 58. The Policy Memorandum also indicates that the Scottish Government intends to utilise this power to place an additional charge on single-use cups.ⁱⁱⁱPolicy Memorandum, paragraph 60. The draft 2030 Waste and Circular Economy Routemap states it will do this ?by 2025?.^ivScottish Government (2024) Scotland?s Circular Economy and Waste Route Map to 2030 Consultation. It also commits to publishing a Product Stewardship plan by 2025/26 which will identify priority problematic products for action and the appropriate approaches to tackle them, which could include charges.^ivScottish Government (2024) Scotland?s Circular Economy and Waste Route Map to 2030 Consultation.

319. Stakeholders noted the following themes?

     • The significant negative environmental and economic impact of single-use items, and how additional charges could be an effective intervention for reducing their consumption;^viNet Zero, Energy and Transport Committee. Official Report, 14 November 2023, col 37; Net Zero, Energy and Transport Committee, Official Report, 28 November 2023, col 18 and written submissions including The City of Edinburgh Council, Zero Waste Scotland and Circular Communities Scotland.

     • Administrative and operational burdens placed on businesses as a result of implementing charges;^viWritten submissions including The Scottish Tourism Alliance, Scottish Beer & Pub Association and Scottish Grocers' Federation.

     • Regulations to impose charges should?

       • Complement other measures looking to encourage the use of reusable alternatives. This included public communications activities;^viNet Zero, Energy and Transport Committee.Official Report, 7 November 2023, cols 44 and 45; Net Zero, Energy and Transport Committee. Official Report, 3 October 2023, col 42 and written submissions including Aberdeenshire Council,The City of Edinburgh Council and Scottish Environment LINK.

       • Be used most effectively in combination with other measures aiming to tackle consumption and waste such as mandatory take back schemes;^viNet Zero, Energy and Transport Committee. Official Report, 14 November 2023, cols 37 and 40; Net Zero, Energy and Transport Committee, Official Report, 28 November 2023, cols 23 and 34 and written submissions including Scottish Environmental Services Association, Action to Protect Rural Scotland and Scottish Environment LINK.

     • UK-wide considerations relating to single-use items;^viNet Zero, Energy and Transport Committee, Official Report, 26 September 2023, col 3; Net Zero, Energy and Transport Committee. Official Report, 14 November 2023, cols 41 and 42 and written submissions including Scottish Wholesale Association, The Law Society of Scotland and Foodservice Packaging Association. and

     • The definition of "advancement of environmental protection" for the purposes of allocating proceeds (Section 9(4) - proposed Section 87A(1)(b) of the Climate Change (Scotland) Act 2009).^viNet Zero, Energy and Transport Committee. Official Report, 26 September 2023, col 21; Net Zero, Energy and Transport Committee. Official Report, 14 November 2023, col 36 and written submissions including South of Scotland Enterprise and Marine Conservation Society and Scottish Retail Consortium.

320. Some stakeholders welcomed ambitions around additional charging.ⁱNet Zero, Energy and Transport Committee. Official Report, 14 November 2023, col 34-37; Net Zero, Energy and Transport Committee, Official Report, 28 November 2023, col 52 and written submissions including The City of Edinburgh Council, Quakers in Scotland and SEPA. Significant climate and environmental impacts associated with single-use items were noted, including how charges would deter the consumption of single-use products and encourage sustainable behaviours in consumers.ⁱNet Zero, Energy and Transport Committee, Official Report, 28 November 2023, col 18 and written submissions including The City of Edinburgh Council, Zero Waste Scotland and Circular Communities Scotland. The introduction of additional charging for single-use carrier bags in 2014 was viewed as illustrative of how behaviour change can be managed through financial incentives.ⁱNet Zero, Energy and Transport Committee, Official Report, 26 September 2023, cols 20 and 21 and written submissions including SEPA, Glasgow City Council and Fareshare Scotland. It was also suggested that additional charges could have a positive impact on the wider supply chain as manufacturers and suppliers responded to changed consumer demand for sustainable alternatives to single-use items.ⁱNet Zero, Energy and Transport Committee. Official Report, 14 November 2023, col 37.

321. Supporters also said robust enforcement was needed to ensure compliance. This started with the Scottish Government identifying an appropriate enforcement authority to monitor the implementation of potential future measures and setting out in detail how the authority would be expected to undertake this role. However, there was concern amongst some stakeholders about the capacity and resources for local authorities and SEPA to effectively monitor and enforce any future regulations if nominated to do so.ⁱWritten submissions including South Lanarkshire Council, Society of Chief Officers of Trading Standards in Scotland and Malcolm Rae.

322. The initial focus on cups was discussed. The Financial Memorandum estimates that approximately 1 ton (or 77,740 cups) are littered annually.^viFinancial Memorandum, paragraph 19. Friends of the Earth Scotland said "we do not have time to change our economy one product at a time".ⁱNet Zero, Energy and Transport Committee. Official Report, 14 November 2023, col 36. The Scottish Environmental Services Association said "there are other, more pressing parts of the waste management system in greater need of the Scottish Government?s resources, involving much larger volumes of material with greater potential for carbon impact savings".ⁱWritten submission from Scottish Environmental Services Association. A strategic approach to selecting the subjects of charges using the assessment of environmental harm or carbon footprint was called for.ⁱNet Zero, Energy and Transport Committee. Official Report, 14 November 2023, col 35 and Net Zero, Energy and Transport Committee, Official Report, 28 November 2023, col 35. Stakeholders proposed a number single-use items the Scottish Government may wish to apply additional charges to?

     • Nappies;ⁱNet Zero, Energy and Transport Committee. Official Report, 21 November 2023, col 18.

     • Cutlery;ⁱNet Zero, Energy and Transport Committee. Official Report, 14 November 2023, col 39.

     • Cigarette filters;ⁱWritten submissions from Keep Scotland Beautiful, Benders Paper Cups and Foodservice Packaging Association. and

     • Chewing gum.ⁱWritten submissions from DC7 Vending Ltd, Excel Vending Ltd and The Vending & Automated Retail Association.

323. A number of stakeholders called for the Scottish Government to go further by banning the use of certain single-use itemsⁱNet Zero, Energy and Transport Committee. Official Report, 14 November 2023, col 39 and written submissions including SEPA, Circular Communities Scotland and Scottish Environmental Services Association., particularly when alternative sustainable products were already availableⁱNet Zero, Energy and Transport Committee. Official Report, 14 November 2023, cols 37 and 38., for example disposable vapes.ⁱNet Zero, Energy and Transport Committee. Official Report, 21 November 2023, cols 15, 17 and 18 and written submissions including Resource Management Association Scotland, CIWM Scotland and Quakers in Scotland. The Minister wrote to the Committee on 19 January setting out the Scottish Government's intention to legislate to enact a ban on single-use vapes in Scotland and confirmed that an exclusion from the Internal Market Act would be sought.^xviiLetter from the Minister for Green Skills, Circular Economy and Biodiversity - 26 January 2024.

324. The Minister said the Scottish Government had three "basic approaches" to regulating single-use items; to ban them, to impose additional charges, or to implement producer responsibility measures. She said "using the right tool for the right job" was the principal aim for the Government.ⁱⁱNet Zero, Energy and Transport Committee, Official Report, 5 December 2023, col 37.

325. Section 87A(1)(b) states that revenues generated as a result of charges should be used by businesses and retailers "to the advancement of environmental protection or improvement or to any other purposes that may be reasonably regarded as analogous".ⁱCircular Economy (Scotland) Bill, Section 9 (4). The Financial Memorandum for the Bill does not provide an estimated amount that could be generated if charges are introduced. It was emphasised that if the policy is successful, no funds will be raised.ⁱⁱNet Zero, Energy and Transport Committee. Official Report, 3 October 2023, col 43.

326. Stakeholders broadly welcomed the approach of allowing charges to be reclaimed by the suppliers of goods rather than the Scottish Government, noting that this was consistent with the system adopted for the single-use carrier bag charge. ⁱⁱNet Zero, Energy and Transport Committee. Official Report, 14 November 2023, col 36; Net Zero, Energy and Transport Committee. Official Report, 26 September 2023, cols 20 and 21. However, some were unclear as to what would constitute "the advancement of environmental protection or improvement or to any other purposes that may be reasonably regarded as analogous."^ivWritten submissions from Foodservice Packaging Association, The UKRI CircularChem Centre and Aberdeen City Council.

327. The Scottish Retail Consortium suggested the Scottish Government follow the same broad definition of 'good causes' businesses could support through the additional funds generated for the single-use plastic bag charge. They told us this allows businesses the flexibility to use proceeds on a wide range of initiatives ranging from public health to education.ⁱⁱNet Zero, Energy and Transport Committee. Official Report, 26 September 2023, col 21 and written submissions from Scottish Retail Consortium. Some stakeholders suggested a clearer specification on the face of the Bill for any income from the charges to support wider circular economy measures and initiatives in Scotland.^ivWritten submissions including The UKRI CircularChem Centre, South of Scotland Enterprise and Marine Conservation Society. They noted that this could help to encourage innovation or support a move towards reusable items.

328. We heard charges must be accompanied by a suite of interventions that work together to increase uptake of reusable alternatives.ⁱNet Zero, Energy and Transport Committee.Official Report, 7 November 2023, col 45 and 46; Net Zero, Energy and Transport Committee. Official Report, 3 October 2023, col 42 and written submissions including South of Scotland Enterprise, The City of Edinburgh Council and Scottish Youth Parliament. This means making reusable products more attractive to consumers. One of the key barriers we heard to consumers taking up reusable alternatives was affordability and convenience. Support for those on lower incomes to access reusable alternatives was suggested to prevent vulnerable groups being adversely impacted from the introduction of additional charges.ⁱNet Zero, Energy and Transport Committee.Official Report, 7 November 2023, col 44 and written submissions from Scottish Youth Parliament, UKRI Interdisciplinary Centre for Circular Chemical Economy and Consumer Scotland.

329. Equality considerations were also raised with us and the need for detailed impact assessments was emphasised to ensure there were not unintended consequences for those reliant on single-use products.ⁱWritten submissions from South of Scotland Enterprise, Aberdeenshire Council and Quakers in Scotland.

330. Stakeholders mentioned that public acceptance of the regulations and greater consumer awareness around single-use items formed a central part of achieving the desired behaviour change.ⁱNet Zero, Energy and Transport Committee.Official Report, 7 November 2023, col 45 and written submissions from Consumer Scotland, The UKRI CircularChem Centre and Scottish Youth Parliament. Simple and effective marketing was called for which clearly sets out the rationale for introducing charges for single-use items and how individuals can play their part by adopting reusable alternatives.ⁱWritten submissions from Federation of Small Businesses, Action to Protect Rural Scotland and Met4Tech.

331. We also heard concerns about the introduction of charges for single-use items.ⁱNet Zero, Energy and Transport Committee, Official Report, 26 September 2023, col 3 and written submission from Scottish Grocers' Federation and McDonald's UK. Businesses in particular were worried about unintended consequences and the potential impact on local retailers and hospitality venues as a result of the additional administrative and logistical burdens.ⁱNet Zero, Energy and Transport Committee, Official Report, 26 September 2023, col 3 and written submission from UK Hospitality Scotland, Scottish Grocers' Federation and The Scottish Tourism Alliance. UK Hospitality Scotland said?

     "Adding a cost to the price of purchasing single-use items will penalise Scottish businesses and consumers. For example, it is envisaged that a charge of 20p could be applied to single-use cups. This may well result in lost business for high street premises as customers choose not to make a purchase and pay the extra. Given we are in a cost of living crisis anything that could dent consumer confidence and spend is unwelcome, further jeopardising business and jobs."ⁱWritten submission from UK Hospitality Scotland.

332. Businesses also pointed to a multiplicity of practical uses for single-use items where a reusable alternative would not be appropriate for product and consumer safety reasons,ⁱNet Zero, Energy and Transport Committee, Official Report, 26 September 2023, cols 9 and 22. for instance in relation to healthcare equipment and certain food packaging.ⁱWritten submissions from UKRI Interdisciplinary Centre for Circular Chemical Economy, The Food and Drink Federation and Scottish Wholesale Association.

333. There were calls to establish mitigations to protect smaller businesses from the potential burdens placed on them from additional charging.ⁱWritten submissions including Scottish Grocers' Federation, Consumer Scotland, Scottish Wholesale Association. This included exploring the use of a phased approach to implementation for SMEs, or exemptions depending on the circumstances.

334. In addition, businesses wanted full and transparent consultation by the Scottish Government to ensure that any regulations are well-designed, not overly burdensome, proportionate and achieve the benefits expected.ⁱNet Zero, Energy and Transport Committee, Official Report, 26 September 2023, cols 23 and 24 and written submissions from McDonald's UK and Foodservice Packaging Association. Robust impact assessments were also called for to ensure regulations were informed by extensive engagement with businesses, consumers and others.ⁱWritten submissions including NFU Scotland, Foodservice Packaging Association, Benders Paper Cups. Stakeholders cited the need for the following documentation to supplement regulations?

     • Business and Regulatory Impact Assessment;ⁱNet Zero, Energy and Transport Committee, Official Report, 26 September 2023, cols 23 and 24 and written submission from Scottish Wholesale Association.

     • Equalities Impact Assessment;ⁱNet Zero, Energy and Transport Committee, Official Report, 26 September 2023, col 23.

     • Rural impact assessment; andⁱWritten submission from South of Scotland Enterprise.

     • Life Cycle Assessment.ⁱWritten submission from Scottish Retail Consortium.

335. Regulations made under Section 9 of the Bill are subject to the affirmative procedure, except regulations which ?specify (or modify the description of) items that suppliers of goods are required to charge for?. These are subject to a super-affirmative procedure as set out in pre-laying procedures set out in Section 97 of the Climate Change (Scotland) Act 2009.ⁱClimate Change (Scotland) Act 2009, Section 97. The scrutiny process for these instruments entails?

     • The Scottish Ministers must lay a draft set of regulations before the Scottish Parliament. This begins a 90-day representation period to allow stakeholders and the Scottish Parliament the opportunity to share their views;

     • The Scottish Ministers will thereafter lay a final draft of the regulations alongside a statement of reasons setting out details of representations it has received and whether any changes have been made to the initial instrument; and

     • The Scottish Parliament will consider the final regulations under the affirmative procedure.

336. This was the same procedure used for development and scrutiny of initial regulations to implement a deposit return scheme in Scotland.

337. The Delegated Powers and Law Reform Committee states the use of the super-affirmative procedure where the items are specified (or descriptions modified) "...offers a high level of scrutiny, but also allows for engagement from the public and stakeholders and ensures that any representations are taken into account in the regulations and their consideration."ⁱⁱDelegated Powers and Law Reform Committee. 8th Report, 2023 (Session 6). Delegated powers in the Circular Economy (Scotland) Bill at Stage 1 (SP Paper 461). That Committee was therefore content with the use of this power and its designated parliamentary procedures.ⁱⁱDelegated Powers and Law Reform Committee. 8th Report, 2023 (Session 6). Delegated powers in the Circular Economy (Scotland) Bill at Stage 1 (SP Paper 461).

338. Representatives of Scottish business made clear that given the potentially significant implications resulting from additional charges on the sector, a high level of scrutiny of the secondary legislation by the Scottish Parliament was important to ensure it was fit for purpose.^ivNet Zero, Energy and Transport Committee, Official Report, 26 September 2023, cols 2, 3, 4. The Scottish Wholesale Association told us?

     "We are concerned that elements of the Circular Economy Bill enabling legislation such as the enabling power to charge for single -use items may be about to follow the same route as the development of the DRS policy. It's critical that problems inherent in a cup charge are not dismissed in the quest for a "simple" solution to a complex problem."^vWritten submission from Scottish Wholesale Association.

339. Professor McHarg told us the use of the super affirmative was "definitely an improvement on the normal situation, and it is appropriate in the circumstances".^ivNet Zero, Energy and Transport Committee, Official Report, 28 November 2023, col 35.She said the Expert Panel on Environmental Charging and Other Measures (EPECOM) supported a "case-by-case approach" to the introduction of additional charging for specific single-use items.^ivNet Zero, Energy and Transport Committee, Official Report, 28 November 2023, col 35.

340. A recurring theme in evidence suggested was that provisions around charging for single-use items may have Internal Market Act considerations.ⁱNet Zero, Energy and Transport Committee. Official Report, 14 November 2023, cols 41 and 42 and written submissions including UK Environmental Law Association, The Law Society of Scotland and Scottish Wholesale Association.

341. The Minister said "[I] believe that we can draft the legislation for single-use cup charges in a way that does not affect or come into contact with the Internal Market Act and would therefore not require an exemption.?ⁱⁱNet Zero, Energy and Transport Committee, Official Report, 5 December 2023, cols 40 and 41. She compared this to the situations which arose with the deposit return scheme, noting it could involve cross border issues, whereas charging for single use items would take place in Scotland.ⁱⁱNet Zero, Energy and Transport Committee, Official Report, 5 December 2023, col 40.

342. However, we heard evidence that the Internal Market Act was not the only issue on which there was a lack of clarity over the deposit return scheme. Examples included VAT and advertising, and the Committee heard that while these would also potentially apply to regulations on single-use charging, there was no detail on that in the Bill or accompanying documents.ⁱⁱNet Zero, Energy and Transport Committee, Official Report, 26 September 2023, col 22.

351. Section 10 of the Bill modifies Section 34 of the Environmental Protection Act 1990 (the 1990 Act) to introduce a new criminal offence for householders who breach their duty of care with regards to waste management.ⁱCircular Economy (Scotland) Bill, Section 10. Regulations made under this Section of the Bill allow the Scottish Ministers to amend the level of the fixed penalties and definitions of enforcement authorities. Regulations are subject to the negative procedure.

352. The Bill provides that the fixed penalty will be ?200.ⁱⁱCircular Economy (Scotland) Bill, Section 10(3). The Delegated Powers and Law Reform Committee notes that limitations are applied to the amount the Scottish Ministers can set for the fixed penalty by regulation.ⁱⁱⁱSection 225 of the Criminal Procedure (Scotland) Act 1995 The Committee also notes that the use of the negative procedure to amend enforcement arrangements is consistent with other provisions set out in the 1990 Act.^ivDelegated Powers and Law Reform Committee. 8th Report, 2023 (Session 6). Delegated powers in the Circular Economy (Scotland) Bill at Stage 1 (SP Paper 461). That Committee was therefore content in principle with the delegated powers established in this Section of the Bill.

353. The Policy Memorandum explains that currently householders must comply with a limited duty to appropriately transfer waste to an authorised waste handler. It explains that the objective of creating new enforcement powers, including to issue fixed penalty notices "is to aid in the prevention of fly-tipping where an offence is traced back to a particular household, and raise awareness of householder responsibilities when disposing of waste".^vPolicy Memorandum, paragraph 76.

354. The following themes were raised with us?

     • The sustained problems of flytipping and illegal waste carriers resulting from legislative and enforcement gaps;^viNet Zero, Energy and Transport Committee. Official Report, 21 November 2023, cols 22 and 23 and written submissions including SEPA, Scottish Environmental Services Association and CIWM Scotland.

     • A lack of public understanding around the householder duty of care and the need for the Scottish Government to ensure education was at the heart of its enforcement approach, with fines ideally a last resort;^viNet Zero, Energy and Transport Committee. Official Report, 21 November 2023, col 22 and written submissions including UKRI Interdisciplinary Centre for Circular Chemical Economy, Caroline Scott and Aberdeenshire Council

     • How easily in practice householders can check that they are transferring waste to an authorised waste carrier (and relatedly if the system of registering as a waste carrier is itself robust and meaningful);^viNet Zero, Energy and Transport Committee. Official Report, 21 November 2023, col 23 and written submissions including Resource Management Association Scotland, Moray Council and Aberdeen City Council. and

     • Wider issues with local government funding and the impact of budgetary constraints on delivery of recycling services and enforcement of waste crime.^viNet Zero, Energy and Transport Committee. Official Report, 14 November 2023, cols 46 and 47 and written submissions including Murdo Fraser MSP, Glasgow City Council and UKRI Interdisciplinary Centre for Circular Chemical Economy.

355. There was broad support for the proposed measures on the basis that it would help to address the ongoing problems presented by flytipping and small-scale illegal waste carriers.^viNet Zero, Energy and Transport Committee. Official Report, 21 November 2023, cols 22 and 23 and written submissions including SEPA, Scottish Environmental Services Association and CIWM Scotland. We heard illegal handlers were common perpetrators of environmental crime and had become increasingly prevalent.^viNet Zero, Energy and Transport Committee. Official Report, 21 November 2023, col 22. Many stakeholders supported the principle of enforcing household responsibility for how they engaged with waste carriers offering disposal services.^viNet Zero, Energy and Transport Committee. Official Report, 21 November 2023, col 23 and written submissions including Janet Hunter, Scottish Land & Estates and Malcolm Rae.

356. However, it was made clear that this intervention would not be a silver bullet in addressing the problem. Stakeholders said the Scottish Government should also consider taking forward a range of other measures to address illegal actors within the waste handlers' industry. These included?

     • Reforms to the waste licensing arrangements (this is discussed later in the report);

     • Higher fine amounts for flytipping offences than are currently permitted;^viWritten submission from Murdo Fraser MSP.

     • Ensuring all waste management vehicles are liveried;^viNet Zero, Energy and Transport Committee. Official Report, 21 November 2023, cols 23, 24 and 53 and written submission from Resource Management Association Scotland. and

     • Improving flytipping data collection and sharing between relevant authorities.^viNet Zero, Energy and Transport Committee. Official Report, 21 November 2023, cols 26 and 27 and written submissions including Dundee City Council, CIWM Scotland and supplementary written submission from Zero Waste Scotland.

357. Section 34ZC sets out the procedures for enforcement authorities to follow when issuing fixed penalty notices. It sets the amount payable by the householder for receiving a fixed penalty notice at ?200.ⁱCircular Economy (Scotland) Bill, Section 10(3).

360. A key cause highlighted by stakeholders for non-compliance was barriers to high-quality local authority services.ⁱNet Zero, Energy and Transport Committee. Official Report, 14 November 2023, col 46 and written submissions including Murdo Fraser MSP, Glasgow City Council and UKRI Interdisciplinary Centre for Circular Chemical Economy. We heard from some stakeholders that local authorities' services have reduced in response to resource constraints.ⁱNet Zero, Energy and Transport Committee. Official Report, 14 November 2023, col 47 and written submission from Murdo Fraser MSP.

361. We heard strong support for the roll out of a comprehensive producer responsibility scheme covering bulky items (such as mattresses and white goods) as a solution upstream in the supply chain and to replenish local authority funding for reinvesting in their recycling facilities.ⁱNet Zero, Energy and Transport Committee. Official Report, 21 November 2023, cols 19 and 20 and written submissions including Quakers in Scotland, Action to Protect Rural Scotland and Marine Conservation Society. Environmental organisations also made a number of suggestions about how takeback or deposit schemes could operate which financially incentivised householders to dispose of their waste correctly. Action to Protect Rural Scotland said?

     "If people got paid ?5 or ?10 to hand a mattress back, rather than having to pay to get it taken away, they would probably not go to the trouble of taking it in a van in the middle of the night."ⁱNet Zero, Energy and Transport Committee. Official Report, 14 November 2023, col 45.

362. The Minister noted that the Scottish Government hold powers relating to producer responsibility that they were considering as part of the solution to charging for bulky waste.^vNet Zero, Energy and Transport Committee, Official Report, 5 December 2023, col 53.

365. Section 46 of the Environmental Protection Act 1990 provides for waste collection authorities to specify the receptacles in which household waste for collection should be deposited.Environment Protection Act 1990, Section 46. Section 11 of the Bill modifies the 1990 Act to insert proposed Sections 46ZA, 46ZB and 46ZC which introduce further enforcement measures for ensuring the right type of material is put in the right bin to avoid contamination.ⁱⁱCircular Economy (Scotland) Bill, Section 11.

366. Local authorities can currently issue notices to householders under the 1990 Act, requiring that household waste be placed in the appropriate bin, and failure to comply with a notice is a criminal offence.ⁱⁱⁱEnvironment Protection Act 1990, Section 46. However, there is no statutory basis for issuing fixed penalty notices to householders contaminating waste recyclate or otherwise misusing household waste services. The Policy Memorandum explains that the aim of Section 11 is to close a perceived gap in the enforcement powers of local authorities. Civil penalties would be expected to be the primary means of enforcement, but with Fixed Penalty notices available "for householders who persistently and deliberately do not comply with existing obligations in relation to household recycling, with the further option of criminal enforcement for more serious and persistent offending".^ivPolicy Memorandum, paragraph 84.

367. The purpose of the provisions is as follows?

     • 46ZA - allows an officer to issue a written warning for persons failing to comply with their responsibilities and the details that must be provided relating to issuing a written warning. This provision also allows for escalation to civil penalty;

     • 46ZB - sets out a procedure for issuing a notice of a civil penalty, which includes notification of intent to do so, the level of penality and the grounds on which it is issued;

     • 46ZC - confers regulation-making powers to the Scottish Ministers to set out further procedures for a civil charging regime including the amount of a civil charge issued;

     • 46ZD - creates a new fixed penalty regime for the offence; and

     • 46ZE - confers powers for the Scottish Ministers to issue guidance to local authorities relating to use of enforcement powers for the above provisions.ⁱⁱCircular Economy (Scotland) Bill, Section 11.

368. The Delegated Powers and Law Reform Committee noted that it was content with the delegated powers referenced in Section 46ZC (affirmative procedure) and 46ZD (negative procedure). The Committee was also content with Section 46ZE(1), but recommended amendment of this provision to ensure the Scottish Government develops guidance in consultation with local authorities.^viDelegated Powers and Law Reform Committee. 8th Report, 2023 (Session 6). Delegated powers in the Circular Economy (Scotland) Bill at Stage 1 (SP Paper 461).

369. Stakeholders were broadly supportive of the proposed measures in Section 11 of the Bill.ⁱNet Zero, Energy and Transport Committee. Official Report, 3 October 2023, cols 43, 44 and 45; Net Zero, Energy and Transport Committee. Official Report, 21 November 2023, col 22 and written submissions including West Lothian Council, Zero Waste Scotland and Malcolm Rae. They told us that effective enforcement would help prevent the contamination of waste streams, meaning more material could be recycled or reprocessed.ⁱNet Zero, Energy and Transport Committee. Official Report, 21 November 2023, col 22 and written submission from Zero Waste Scotland. SEPA told us that 60 per cent of material in residual waste bins could be recycled.ⁱResidual waste is what is left after all reusable and recyclable materials have been separated and removed.ⁱNet Zero, Energy and Transport Committee. Official Report, 3 October 2023, col 34.

370. We heard from local authorities and private waste companies how contaminated household waste was significantly impacting their ability to reprocess recyclable materials.ⁱNet Zero, Energy and Transport Committee. Official Report, 21 November 2023, cols 22, 47 and 48. Examples heard in evidence and on visits showed that in some cases up to 30% of recyclable materials collected could be affected by contamination.ⁱNet Zero, Energy and Transport Committee. Official Report, 21 November 2023, col 22. and this could significantly hamper the extraction of value from those materials.^viA summary of the evidence from the Committee's visits on the Bill can be found in Annexe C. As a result, local authorities and private waste companies were supportive of expanding enforcement tools to ensure householders correctly dispose of their waste into the appropriate receptacles.ⁱNet Zero, Energy and Transport Committee. Official Report, 21 November 2023, col 22 and written submissions including CIWM Scotland, Dundee City Council and West Lothian Council.

371. Single-use nappies were particularly identified as a difficult issue in terms of contamination of waste streams.ⁱNet Zero, Energy and Transport Committee. Official Report, 21 November 2023, cols 18 and 19. The Scottish Environmental Services Association told us?

     "Nappies are a huge issue in respect of contaminating the recycling. People put them in the recycling. The trouble is that the message that we send out to people is, ?Recycle as much as you can.? Quite often, people simply do not understand what can and cannot go in the blue bin, so they contaminate recycling coming through the system. Unfortunately, a whole batch could be contaminated by nappies."ⁱNet Zero, Energy and Transport Committee. Official Report, 21 November 2023, cols 18 and 19.

372. Some stakeholders saw the introduction of a fixed and civil penalty regime as part of a range of additional actions to influence household waste behaviours.ⁱNet Zero, Energy and Transport Committee. Official Report, 3 October 2023, cols 43 and 44; Net Zero, Energy and Transport Committee. Official Report, 21 November 2023, col 47 and written submission from Zero Waste Scotland. They supported the introduction of civil and fixed penalties but made clear they should only be used as a last resort, or in particularly severe incidents.ⁱNet Zero, Energy and Transport Committee, Official Report, 28 November 2023, cols 26 and 27; Net Zero, Energy and Transport Committee. Official Report, 21 November 2023, col 22 and written submissions including Scottish Youth Parliament, Stirling Council and West Lothian Council. Welsh circular economy experts WRAP Cymru told us that local authorities with similar penalties in Wales only used them at the end of a prolonged period of engagement with the householder.ⁱⁱNet Zero, Energy and Transport Committee, Official Report, 28 November 2023, col 26 and 27. A Scottish Government official confirmed this approach would also be followed in Scotland, involving a "ladder of measures" for local authorities to communicate with householders.ⁱⁱNet Zero, Energy and Transport Committee, Official Report, 5 December 2023, col 48.

373. Local authorities were clear that adequate funding and staffing were needed if local authorities were to make meaningful use of these new enforcement tools.ⁱWritten submissions including Moray Council, West Lothian Council and Aberdeenshire Council.

382. Section 12 of the Bill requires the preparation of a statutory Code of Practice for local authorities in executing their recycling responsibilities.ⁱCircular Economy (Scotland) Bill, Section 12. Section 13 allows the Scottish Government to create targets for local authority recycling.ⁱⁱCircular Economy (Scotland) Bill, Section 13.

383. The Committee observes the focus on recycling and the potential missed opportunity to focus action higher up the waste hierarchy. Circular Communities Scotland said "Our whole system is geared towards recycling. We are not getting spectacular levels of recycling; 43 per cent does not compare well with what Wales is getting, for example. The best way to turbocharge that change is to take a top-down approach."ⁱⁱⁱNet Zero, Energy and Transport Committee, Official Report, 14 November 2023, col 32.

384. The accompanying documents to the Bill do not set out what consideration has been given by the Scottish Government to how a statutory Code for recycling or targets for local authorities could be used to promote reuse and repair.

385. Section 12 of the Bill amends the Environmental Protection Act 1990 to insert Section 44ZZA placing a duty on the Scottish Ministers to prepare a Code of Practice for household waste recycling. Section 44ZZA(1) outlines that the Code must describe the standards expected of and steps required by local authorities in delivering their waste management duties relating to recycling.ⁱCircular Economy (Scotland) Bill, Section 12.

386. Section 44ZZA(2) says the Code may make provisions on?

     • "the receptacles to be used for household waste collection

     • the frequency of household waste collection;

     • the items of household waste that are to be recycled or composted;

     • managing the contamination of household waste that is capable of being recycled or composted

     • communicating with the public about the collection and recycling of household waste."ⁱCircular Economy (Scotland) Bill, Section 12.

387. The Policy Memorandum explains that the statutory Code of Practice will help to create more consistency in household waste collection across local authority areas and provide a "strategic direction" on recycling in Scotland to help deliver service improvements.ⁱⁱⁱPolicy Memorandum, paragraphs 89 and 90.

388. The Delegated Powers and Law Reform Committee noted that the Code of Practice is subject to a laid-only procedure. Given the Code will be subject to extensive consultation with stakeholders as part of the co-design process, that Committee was content that the Code is not subject to parliamentary procedure.^ivDelegated Powers and Law Reform Committee. 8th Report, 2023 (Session 6). Delegated powers in the Circular Economy (Scotland) Bill at Stage 1 (SP Paper 461).

389. The following points were raised in relation to the Scottish Government's proposals for a mandatory code of practice?

     • A statutory footing for the Code of Practice and the implications of this;

     • The significant benefits from harmonising recycling provision;

     • How local and regional differences would be reflected in the Code ensuring local authorities would be able to respond to local needs;

     • Co-design process; and

     • The costs of implementation and how local authorities will be resourced to delivery the Code.

390. Collaboration between the Scottish Government and COSLA established a voluntary Scottish Household Recycling Charter and associated voluntary Code of Practice. However, as noted in the Policy Memorandum, whilst almost all local authorities signed up to the voluntary Code, only one third have fully implemented the agreed standards.ⁱPolicy Memorandum, paragraph 94. Budgetary pressures were noted as a factor in the non-compliance of many local authorities with their voluntary obligation, mainly because local authorities did not have the capital and revenue funding available to deliver service improvements.ⁱⁱWritten submissions from The City of Edinburgh Council , Scottish Countryside Alliance, Consumer Scotland, Nourish Scotland and CIWM Scotland.

391. The Financial Memorandum provides estimates of costs for compliance of all local authorities with the existing voluntary code.ⁱⁱⁱFinancial Memorandum, paragraph 48 As the detail and practicalities of the Code of Practice will be ironed out through a co-design process, the Scottish Government has not provided a total cost estimated for local authorities to fully achieve any new mandatory requirements. The Finance and Public Administration Committee raised concerns about the lack of clarity shown by the Scottish Government in relation to costing for securing complete compliance amongst local authorities with a statutory Code of Practice. It branded this approach as being potentially "unaffordable and unsustainable".^ivFinance and Public Administration Committee. 10th Report, 2023 (Session 6). Report on the Financial Memorandum for the Circular Economy (Scotland) Bill (SP Paper 484).

392. The draft Waste Route Map to 2030^vScottish Government (2024) Scotland?s Circular Economy and Waste Route Map to 2030 Consultation. says the Scottish Government intends to "Develop a statutory code of practice for household waste services (by 2025/26)". However, it does not specify when this must be achieved by.

393. Stakeholders were generally supportive of a statutory Code of Practice.ⁱNet Zero, Energy and Transport Committee. Official Report, 21 November 2023, col 31; Net Zero, Energy and Transport Committee. Official Report, 3 October 2023, cols 44 and 45 and written submissions including Moray Firth Coastal Partnership, Quakers in Scotland and Ostrero. They agreed that pursuing more national consistency in recycling services and approaches could help to increase recycling rates, public understanding of recycling and planning of associated collections and recycling infrastructure.ⁱNet Zero, Energy and Transport Committee. Official Report, 3 October 2023, cols 44, 45 and 49 and written submissions including Benders Paper Cups, Glasgow City Council and Scottish Environmental Services Association.

394. Consistency was also seen as an opportunity to unlock further investment in recycling infrastructure and to expand and standardise the materials collected from households, for example soft plastics.ⁱNet Zero, Energy and Transport Committee. Official Report, 3 October 2023, cols 46 and 47 and written submissions from SEDA UK and Resource Management Association Scotland. Zero Waste Scotland provided a non-exhaustive list of reprocessing infrastructure opportunities in Scotland across a range of recyclates and product streams.ⁱSupplementary written submission from Zero Waste Scotland. They felt the Code of Practice could deliver a level of certainty, for example of supply of materials, that could bring economic opportunities.ⁱNet Zero, Energy and Transport Committee. Official Report, 3 October 2023, col 46.

395. Some local authorities were supportive of consistency.ⁱWritten submissions including The City of Edinburgh Council, Glasgow City Council and Stirling Council. Glasgow City Council told us it would give them clarity to plan around what was expected of them and how services should operate.ⁱWritten submission from Glasgow City Council. Stirling Council said the proposed statutory Code of Practice would address a reluctance amongst many local authorities to challenge the status quo in their approach to waste management and encourage them to initiate a move towards an alternative delivery model.ⁱWritten submission from Stirling Council.

396. However, we also heard about the need for inherent flexibility to reflect different geographical priorities.ⁱNet Zero, Energy and Transport Committee. Official Report, 21 November 2023, cols 10, 11 and 31. Some local authorities also made clear that current financial constraints were also a key barrier to making any necessary service improvements devised through the proposed statutory Code of Practice.ⁱWritten submissions from COSLA and Stirling Council.

397. We also heard that consistency of approach to collection and the materials collected would only operate effectively with consistent and uniform access to infrastructure to receive and process the materials.ⁱNet Zero, Energy and Transport Committee. Official Report, 21 November 2023, cols 11 and 12 and written submission from Scottish Environmental Services Association. The Scottish Environmental Services Association and the Resources Management Association Scotland also noted there was no point collecting mingled recycling if the only facilities to sort it were at the other end of the country.ⁱNet Zero, Energy and Transport Committee. Official Report, 21 November 2023, cols 11 and 12.

402. Differences in local needs were noted as a reason for local authorities being unable to fully align with the voluntary Code of Practice.ⁱWritten submissions including The City of Edinburgh Council, Stirling Council and West Lothian Council. South Lanarkshire Council explained that limited access to reprocessors and housing stock were the main challenges for their waste management services.ⁱWritten submission from South Lanarkshire Council. For Shetland Islands Council, service delivery for an island community meant weighing up the costs and environmental considerations of exporting recyclables to the Scottish mainland.ⁱⁱⁱNet Zero, Energy and Transport Committee. Official Report, 21 November 2023, col 39.

403. Therefore, some stakeholders said local considerations needed to be reflected in the statutory Code of Practice.ⁱNet Zero, Energy and Transport Committee. Official Report, 21 November 2023, col 11 and 31 and written submissions including Aberdeenshire Council, Dundee City Council and Circular Communities Scotland. Indeed, as part of our evidence taking on the Bill and in our inquiry into the role of local government and its cross-sectoral partners in financing and delivering a net-zero Scotland, we noted that urban, rural and island local authorities faced vastly different challenges and priorities which made pursuit of uniformity challenging.^vNet Zero, Energy and Transport Committee. 1st Report, 2023 (Session 6). The role of local government and its cross-sectoral partners in financing and delivering a net-zero Scotland (SP Paper 302).

404. The Scottish Government intends the Code of Practice will be co-designed with stakeholders including COSLA.ⁱPolicy Memorandum, paragraph 92. The Scottish Government says this approach is in accordance with the new partnership signed with COSLA, the Verity House Agreement.ⁱⁱNet Zero, Energy and Transport Committee, Official Report, 5 December 2023, col 5.

405. We note concerns the Finance and Public Administration Committee heard from local authorities about how the co-design process would work in practice. That Committee noted there was a "lack of clarity" on the amount of funding required to improve local infrastructure and service models to meet new standards in the Code of Practice. That Committee was also "unconvinced" by the Scottish Government's viewpoint that co-design should begin after the legislative process has been completed rather than bringing forward detailed proposals before the introduction of legislation.ⁱⁱⁱFinance and Public Administration Committee. 10th Report, 2023 (Session 6). Report on the Financial Memorandum for the Circular Economy (Scotland) Bill (SP Paper 484).

406. In our inquiry into the role of local government and its cross-sectoral partners in financing and delivering a net-zero ScotlandⁱNet Zero, Energy and Transport Committee. 1st Report, 2023 (Session 6). The role of local government and its cross-sectoral partners in financing and delivering a net-zero Scotland (SP Paper 302)., we outlined our support for more consistently high recycling rates across Scotland's local authorities. However, we made clear that in meeting more stringent standards, local authorities would require funding to install the correct recycling infrastructure.ⁱNet Zero, Energy and Transport Committee. 1st Report, 2023 (Session 6). The role of local government and its cross-sectoral partners in financing and delivering a net-zero Scotland (SP Paper 302).

407. The Scottish Government has pointed to the Recycling Improvement Fund as one example of how it is currently supporting local authorities in developing their infrastructure ahead of statutory targets. SOLACE told us they welcomed the funding and noted it had been useful for supporting local authorities with lower recycling rates.ⁱⁱⁱNet Zero, Energy and Transport Committee. Official Report, 21 November 2023, col 32. For example, Glasgow City Council were using an additional ?21 million received through this scheme to improve kerbside recycling services and to develop a new materials recovery facility.ⁱⁱⁱNet Zero, Energy and Transport Committee. Official Report, 21 November 2023, cols 45 and 46.

408. However, as noted by the Finance and Public Administration Committee, the vast majority of the ?71 million Fund has now been committed and 11 local authorities are yet to see any benefit from it. The Finance and Public Administration Committee noted there was a "high disparity between the amounts allocated to local authorities". They concluded that the funding settlement is not sufficient to ensure all local authorities are able to deliver the improvements in infrastructure they require.^vFinance and Public Administration Committee. 10th Report, 2023 (Session 6). Report on the Financial Memorandum for the Circular Economy (Scotland) Bill (SP Paper 484).

409. We heard evidence on knowledge of the end-destination for materials being an important factor in improving recycling rates. WRAP Cymru told us of a local authority duty to report this information in Wales and how this was transparently published to allow citizens to question the decisions of local authorities.ⁱNet Zero, Energy and Transport Committee, Official Report, 28 November 2023, col 3. Zero Waste Scotland said consistency and enforcement were important, but of equal importance was public awareness of recycling practices to avoid contamination.ⁱⁱNet Zero, Energy and Transport Committee. Official Report, 3 October 2023, cols 45 and 46.

410. The draft 2030 Routemap states the Scottish Government intends to ?Develop options and consult on the introduction of end destination public reporting of household recycling collected (by 2027/28)?.ⁱⁱⁱScottish Government (2024) Scotland?s Circular Economy and Waste Route Map to 2030 Consultation.

415. Section 13 modifies the 1990 Act to confer regulation-making powers on Scottish Ministers to set statutory recycling targets for local authorities. The Policy Memorandum indicates that the principal policy ambition underpinning these provisions is to increase local authority recycling performance. It notes that statutory recycling targets were a common feature of countries that were performing comparatively well in terms of recycling rates.ⁱPolicy Memorandum, paragraph 96.

416. In general, evidence provided in relation to statutory recycling targets focused around the following themes?

     • Support for proposals as a means to address Scotland's stagnating recycling rate;

     • Support for statutory reuse targets to encourage local authorities to improve provision further upstream in the waste hierarchy;

     • Consideration of how the Scottish Government should work with local government and others in agreeing recycling targets; and

     • The imposition of financial penalties and how the Scottish Government should approach enforcement of targets in the context of significant financial pressures on local authorities.

417. Some stakeholders said the use of statutory local targets was a positive tool for increasing recycling capacity and promoting consistency in recycling rates across Scotland's local authorities.ⁱNet Zero, Energy and Transport Committee. Official Report, 21 November 2023, col 34 and written submissions including The Ethical Dairy, Tetra Pak and SEPA. It was noted recycling rates vary considerably across local authorities in Scotland. The Scottish Government also had a national target to achieve a 60% household recycling rate by 2020, however recycling rates have remained relatively stagnant over recent years at around 43%.ⁱNet Zero, Energy and Transport Committee. Official Report, 3 October 2023, cols 49 and 50 and written submissions from Circular Communities Scotland and SEPA.

418. Local statutory recycling targets are already in place in other countries including Wales. WRAP Cymru said that the introduction of statutory targets had been key to driving up recycling rates in Wales. The organisation also suggested the fines for failing to meet targets were persuasively significant.ⁱⁱⁱNet Zero, Energy and Transport Committee, Official Report, 28 November 2023, col 6.

419. Equally important would be ensuring a well-defined framework of monitoring and evaluation was put in place to operate in conjunction with the imposition of targets.ⁱWritten submissions including Circular Communities Scotland, Environmental Standards Scotland and Biffa Group Group and Company Shop Group. This would include regular reporting and performance evaluation to openly allow scrutiny of how progress is being made.ⁱWritten submissions including Scotland?s International Development Alliance, Circular Communities Scotland and UKRI Interdisciplinary Centre for Circular Chemical Economy. It would also allow the Scottish Government to intervene in cases where it appeared local authorities were not on track to meet their agreed targets.ⁱWritten submission from Quakers in Scotland. Local recycling targets were also seen as useful for allowing the Scottish Government to better target national resources.ⁱWritten submission from UKRI Interdisciplinary Centre for Circular Chemical Economy.

422. According to the Policy Memorandum, Section 47B(2) states "regulations under subsection (1) may not make provision imposing targets in relation to any time before 1 April 2030".ⁱPolicy Memorandum, paragraph 96. Regulations made in relation to the creation of statutory targets would be subject to the affirmative procedure.

423. The Delegated Powers and Law Reform Committee noted that in Wales a two-year lead in time was provided to allow local authorities to prepare for implementation before regulations setting out statutory targets came into force.ⁱⁱDelegated Powers and Law Reform Committee. 8th Report, 2023 (Session 6). Delegated powers in the Circular Economy (Scotland) Bill at Stage 1 (SP Paper 461). The Scottish Government said that a similar timeframe for notice would be considered reasonable in the Scottish context. The Committee was content with the use of the affirmative procedure as appropriate scrutiny for the statutory targets.ⁱⁱDelegated Powers and Law Reform Committee. 8th Report, 2023 (Session 6). Delegated powers in the Circular Economy (Scotland) Bill at Stage 1 (SP Paper 461).

424. However, the draft Circular Economy and Waste Route Map to 2030 says of the two -year notice period "The Scottish Government considers this to be the minimum reasonable notice period for targets and recognises that more notice is both desirable and likely to help with achieving targets.?^ivScottish Government (2024) Scotland?s Circular Economy and Waste Route Map to 2030 Consultation.

425. Section 13(2) (in the proposed Section 47B(4)) provides for mandatory consultation with the public, as well as local authorities and SEPA when developing targets.ⁱCircular Economy (Scotland) Bill, Section 13.

426. The Policy Memorandum says targets will be realistic, noting that local authorities are at different levels of recycling provision and have distinct local challenges and opportunities in relation to waste management. It therefore says that the Scottish Government will "work with local government to set achievable, appropriate targets as part of the development of secondary regulations and consultation for new targets".ⁱⁱPolicy Memorandum, paragraph 98.

427. This collaboration was seen as vital to the successful introduction of targets.ⁱⁱⁱNet Zero, Energy and Transport Committee, Official Report, 21 November 2023, col 34 and written submissions from Malcolm Rae, Aberdeen City Council and UKRI Interdisciplinary Centre for Circular Chemical Economy. There was also a clear desire for the Scottish Government to use discussions with local authorities to identify what resources are required to achieve targets.ⁱⁱⁱWritten submissions including Glasgow City Council, UKRI Interdisciplinary Centre for Circular Chemical Economy and The City of Edinburgh Council. The Minister confirmed the Scottish Government would be taking a "common sense" approach to target setting which took into account specific considerations in relation to each local authority.ⁱⁱⁱNet Zero, Energy and Transport Committee, Official Report, 5 December 2023, col 45.

428. Local authorities highlighted that many wider market and supply chain issues were also to blame for current issues with recycling levels and needed to be considered when setting local targets.ⁱⁱⁱWritten submissions including Moray Council, Aberdeen City Council and West Lothian Council. Some stakeholders also said that issues relating to overproduction, consumer behaviours and product design were outwith the control of local authorities and needed to be addressed through interventions upstream in the supply chain.ⁱⁱⁱNet Zero, Energy and Transport Committee. Official Report, 14 November 2023, col 47 and written submission from SEPA, Resource Management Association Scotland and Malcolm Rae. We also heard from COSLA and othersⁱⁱⁱNet Zero, Energy and Transport Committee, Official Report, 21 November 2023, cols 19 and 20 and written submissions from The City of Edinburgh Council and Action to Protect Rural Scotland. about their support for action further up the waste hierarchy and a shift from a focus on the actions of consumers. They highlighted their engagement in the development of an extended producer responsibility scheme.^viiNet Zero, Energy and Transport Committee. Official Report, 21 November 2023, cols 19 and 20.

429. Proposed Section 47B(3)(d) provides regulation-making powers for the Scottish Ministers to impose a penalty for local authorities failing to achieve their agreed target. Proposed Section 47B(3)(e) allows the Scottish Ministers to make further provision in relation to enforcement of targets.ⁱCircular Economy (Scotland) Bill, Section 13.

430. Some stakeholders raised concerns about how penalties could exacerbate current financial pressures faced by local authorities.ⁱⁱWritten submissions including Aberdeenshire Council and Dundee City Council and supplementary written submission from COSLA. Appropriate resource was important if local authorities were to improve their facilities in order to achieve targets.ⁱⁱNet Zero, Energy and Transport Committee, Official Report, 21 November 2023 cols 54 and 55 and written submissions including Glasgow City Council, South Lanarkshire Council and British Glass. It was suggested that offering financial incentives could be more effective in delivering desired outcomes and performance.ⁱⁱWritten submissions including Dundee City Council from Aberdeenshire Council. COSLA called for financial penalties to be removed from the Bill on the grounds that this was incompatible with the spirit and obligations of the Verity House Agreement.^vSupplementary written submission from COSLA.

431. The Minister acknowledged COSLA's concerns but stressed that penalties would be considered as a last resort.ⁱⁱⁱNet Zero, Energy and Transport Committee, Official Report, 5 December 2023, col 32. She explained that a key part of the Verity House Agreement was for decision-making to be evidence-based, noting that similar measures had proved effective in other countries such as Wales.ⁱⁱⁱNet Zero, Energy and Transport Committee, Official Report, 5 December 2023, col 44. She added that?

     "The intention is to support councils to deliver good services, not to penalise them, but there must be consequences for not meeting a mandatory obligation."ⁱⁱⁱNet Zero, Energy and Transport Committee, Official Report, 5 December 2023, col 44.

432. The Bill allows for monitoring duties to be conferred on SEPA^ixCircular Economy (Scotland) Bill, Section 13 (2). and the Financial Memorandum estimates this could cost between ?35,000 and ?100,000.

437. We heard of the effect littering was having on Scotland?s natural environment and within local communities.ⁱWritten submissions from Keep Scotland Beautiful, South of Scotland Enterpriseand Marine Conservation Society. Section 14 of the Bill modifies the Environmental Protection Act 1990 to insert Section 88C which grants powers to an "authorised person" representing a litter authority (usually a local council) to issue a civil penalty to a registered owner of a vehicle if a littering offence is found to have been committed from that vehicle. Proposed Section 88C(5) confers regulation-making powers on Scottish Ministers to establish a charging regime for these provisions and set out further details relating to procedures for enforcement authorities to carry out their new statutory functions.ⁱⁱCircular Economy (Scotland) Bill, Section 14. Regulations relating to the establishment of the civil penalty regime are subject to the affirmative procedure.ⁱⁱCircular Economy (Scotland) Bill, Section 14.

438. The Policy Memorandum says these provisions have been brought forward to address current enforcement gaps.^ivPolicy Memorandum, paragraph 104. The Scottish Government says measures to tackle roadside litter set out in the Bill complement non-legislative actions set out in the National Litter and Flytipping Strategy.^vScottish Government (2023). National Litter and Flytipping Strategy.

439. The Delegated Powers and Law Reform Committee said that it was content with the regulation-making powers in this Section and use of the affirmative procedure. That Committee noted there was precedent for ensuring flexibility to adapt charging regimes over time through secondary legislation, rather than setting this detail out in primary legislation.^viDelegated Powers and Law Reform Committee. 8th Report, 2023 (Session 6). Delegated powers in the Circular Economy (Scotland) Bill at Stage 1 (SP Paper 461).

440. Comments under these provisions tended to focus on?

     • Support for provisions as a means of tackling roadside litter and addressing current enforcement gaps; and

     • Financing of enforcement.

441. Stakeholders welcomed the enforcement powers in the Bill.ⁱWritten submissions including SEPA, Scottish Environmental Services Association, Scottish Wholesale Association and Aberdeenshire Council. Many welcomed the perceived rectification of a long standing enforcement gap.ⁱWritten submissions including The City of Edinburgh Council, Met4Tech and The Law Society of Scotland. New civil penalties were thought to deter motorists from committing litter offences and to help encourage behaviour change.ⁱWritten submissions including The UKRI CircularChem Centre, West Lothian Council and UKRI Interdisciplinary Centre for Circular Chemical Economy. It was also noted that the proposals would bring Scotland into line with other parts of the UK where such measures are already in place.ⁱWritten submission including Foodservice Packaging Association, Scottish Countryside Alliance and Met4Tech.

442. How littering authorities may choose to enforce these powers was identified as an important area of consideration in implementing these provisions. There were questions around the role of enforcement authorities.ⁱWritten submissions including Janet Hunter, Moray Firth Coastal Partnership and NFU Scotland. Local authorities called for the Scottish Government to provide further detail and guidance on how it intended provisions to work in practice. ⁱWritten submissions from Moray Council, Aberdeen City Council and Stirling Council.

443. Stakeholders also proposed a number of non-legislative actions the Scottish Government could take to tackle roadside litter. These included?

     • Communications and public awareness campaigns aimed to educate the public on the problems and encourage reporting of littering;ⁱWritten submissions including Keep Scotland Beautiful, UKRI Interdisciplinary Centre for Circular Chemical Economy and Aberdeenshire Council.

     • Investment in roadside technology such as CCTV;ⁱWritten submission from CIWM Scotland. and

     • Rolling out more recycling infrastructure near motorways, main roads and service stations to make it easier for motorists to make better decisions.ⁱWritten submission from Action to Protect Rural Scotland.

444. Stakeholders said financial constraints affected use of existing enforcement powers to deter littering, including a lack of officers to monitor the problem.ⁱWritten submissions from CIWM Scotland, Stephen Henry and Moray Council.

445. Whilst local authorities welcomed the additional powers to tackle littering they made clear they must be fully funded.ⁱWritten submissions including Aberdeen City Council, Aberdeenshire Council and Glasgow City Council. COSLA and individual local authorities were concerned about assumptions and estimates used in the Financial Memorandum relating to cost recovery and potential savings to local authorities resulting from these provisions.ⁱFinance and Public Administration Committee. Official Report, 24 October 2023, cols 16, 23 and written submissions to the FPA Commitee from COSLA, Dundee City Council and Aberdeenshire Council.

446. The Finance and Public Administration Committee heard that councils currently face significant difficulties trying to pursue other littering fines ?to the extent that it becomes a cost to us to get to a point at which we can recover the money".^ivFinance and Public Administration Committee, Official Report, 24 October 2023, col 16.

447. Referring to criticism from the Finance and Public Administration Committee about the assumption of 100% payments of fixed penalty notices in the Financial Memorandum^ivFinance and Public Administration Committee, Report on the Financial Memorandum for the Circular Economy (Scotland) Bill, 10th Report, 2023 (Session 6), the Minister told us that "the assumption in the financial memorandum of a payment rate of 100 per cent relates only to the provisions that introduce a new civil penalty regime on littering from vehicles".^viNet Zero, Energy and Transport Committee, Official Report, 5 December 2023, col 8.

450. Section 15 of the Bill modifies the Environment Act 1995 to insert Section 110A conferring additional enforcement powers relating to waste crime.ⁱCircular Economy (Scotland) Bill, Section 15. Section 110A(2) sets out that enforcement authorities can?

     • stop a vehicle (Section 110A(2)(a));

     • require a vehicle owner to provide personal details (Section 110A(2)(b));

     • enter commercial premises at a reasonable time for the purpose of searching or seizing the vehicle (Section 110A(2)(c));

     • search a vehicle (Section 110A(2)(d)); and

     • seize a vehicle and any of its contents (Section 110A(2)(e)).

451. The Policy Memorandum says that existing enforcement powers in relation to the seizure of vehicles are laid out in the Control of Pollution (Amendment) Act 1989 (the 1989 Act).ⁱⁱPolicy Memorandum, paragraph 111. This legislation provides SEPA with powers to seize vehicles linked to waste crime, but only if they have obtained a warrant first.ⁱⁱPolicy Memorandum, paragraph 111. Local authorities do not have powers to seize vehicles under the 1989 Act. The proposals in the Bill would allow both SEPA and local authorities to seize vehicles without the need for a warrant provided certain conditions are met. The Scottish Government have said they anticipate enforcement powers to be used primarily to target persistent and serious offenders, with the possibility of having a vehicle seized acting as a deterrent to small scale operators.^ivPolicy Memorandum, paragraph 116.

452. Section 16 sets out how powers can be used.^vCircular Economy (Scotland) Bill, Section 16. The Policy Memorandum provides a list of the circumstances in which local authorities and SEPA would be able to exercise powers to seize vehicles. These are?

     • "transporting controlled waste without registering under Section 1 of the 1989 Act"

     • unauthorised or harmful depositing, treatment or disposal, etc. of waste under section 33 of the Environmental Protection Act 1990;

     • breaches in duty of care, as respects waste under Section 34(1)(a), (aa), (b) and (c) and (2I) of the Environmental Protection Act 1990; and

     • operating without a permit or breaching permit conditions under regulation 67(1)(a) or (b) of the Pollution Prevention and Control (Scotland) Regulations 2012."^viPolicy Memorandum, paragraph 118.

453. The Delegated Powers and Law Reform Committee was content with the use of the affirmative procedure for this provision.^viiDelegated Powers and Law Reform Committee. 8th Report, 2023 (Session 6). Delegated powers in the Circular Economy (Scotland) Bill at Stage 1 (SP Paper 461).

454. Stakeholders said they were broadly supportive of new powers as a way of meaningfully addressing waste crime in Scotland.ⁱNet Zero, Energy and Transport Committee. Official Report, 3 October 2023, col 53 and written submissions including NFU Scotland, Resource Management Association Scotland and Ostrero. It was noted that proposed measures in Scotland had already been successfully adopted in England and Wales.ⁱWritten submissions including Aberdeenshire Council, Biffa Group Group and Company Shop Group and Scottish Wholesale Association. Extending powers to local authorities was also suggested to help reduce the burden on SEPA officers in tackling waste crime incidents and enhance agency responses to incident.ⁱWritten submission from West Lothian Council. We also heard support for the proposed measures on the basis that they would help to address the ongoing problems of flytipping associated with smaller-scale waste carriers operating within the household waste market.ⁱWritten submission from Kay Seal.

455. SEPA and local authorities also welcomed the additional powers the Bill would bring.ⁱNet Zero, Energy and Transport Committee. Official Report, 3 October 2023, col 53 and written submissions including Stirling Council, Moray Council and The City of Edinburgh Council. However, they reiterated strong calls for the Scottish Government to fully resource these enforcement powers to ensure they fulfilled their potential.ⁱWritten submissions including SEPA, Aberdeen City Council, West Lothian Council and Malcolm Rae.

456. Some stakeholders suggested more could be done to improve joint working between Police Scotland, SEPA and local authorities to clarify roles and responsibilities and better coordinate responses to waste crime incidents. ⁱNet Zero, Energy and Transport Committee. Official Report, 14 November 2023, col 51 and written submission from Dundee City Council. COSLA suggested Police Scotland did not often respond to flytipping incidents and that councils were tasked with the costly clean up.ⁱNet Zero, Energy and Transport Committee. Official Report, 21 November 2023, col 24. Police Scotland told us they would not usually respond to incidents of flytipping unless they were ongoing or if the waste was considered hazardous.ⁱWritten submission from Police Scotland.

457. We heard worrying evidence suggesting a strong link between waste crime and organised crime.ⁱNet Zero, Energy and Transport Committee. Official Report, 3 October 2023, col 55 and written submission from SEPA and Murdo Fraser MSP. Some stakeholders called for strong enforcement measures to tackle organised waste crime.ⁱNet Zero, Energy and Transport Committee. Official Report, 3 October 2023, col 55 and written submissions from SEPA and Resource Management Association Scotland. SEPA noted the relationship between environmental and serious organised crime in their evidence to us.ⁱWritten submissions from SEPA. They said?

     "In Scotland, there is a persistent presence of organised crime in the environmental sector, with the number of crime groups in the high teens at any one time. Those involved in waste crime are also linked to additional criminality including money laundering, human trafficking, fraud, and firearms/drug supply."ⁱWritten submission from SEPA.

458. We heard evidence highlighting the challenges flytipping posed to landowners.ⁱNet Zero, Energy and Transport Committee, Official Report, 5 December 2023, col 51 and 52 and written submissions including Murdo Fraser MSP, West Lothian Council and SEPA. Under Section 59 of the Environmental Protection Act 1990 , SEPA and local authorities can serve a notice to landowners to clean-up flytipped waste or face a criminal prosecution.ⁱⁱEnvironmental Protection Act 1990, Section 59. However, we heard landowners often had no control over whether waste was deposited on their land.ⁱNet Zero, Energy and Transport Committee, Official Report, 5 December 2023, col 51 and written submissions from NFU Scotland, Scottish Land & Estates and Scottish Countryside Alliance. We heard of frustrations when trying to report incidents^ivWritten submission from NFU Scotland. and the deterrent measures landowners were putting in place.ⁱWritten submission from Scottish Countryside Alliance. There was support for landowners to tackle flytipping on their properties and the Bill was seen as an opportunity to achieve this.ⁱWritten submissions from Scottish Land & Estates and Scottish Countryside Alliance. SEPA recommended that Section 59 was amended "such that Local Authorities can require those responsible for fly-tipping to take steps to remove the waste and for failure to comply with such a notice to be a criminal offence backed by an appropriate Fixed Penalty Notice."ⁱWritten submission from SEPA.

459. The Minister was sympathetic to these issues but equally did not want to allow culpable occupiers of land to evade responsibility and burden the public purse.ⁱNet Zero, Energy and Transport Committee, Official Report, 5 December 2023, col 51.

460. Additionally, the Scottish Government said it was implementing new ways to protect landowners as set out in its National Littering and Flytipping Strategy.^ixScottish Government (2023). National Litter and Flytipping Strategy. This included the development by SEPA of new guidance and pilots to support landowners to tackle flytipping.ⁱNet Zero, Energy and Transport Committee, Official Report, 5 December 2023, col 51 and Scottish Government (2023). National Litter and Flytipping Strategy 2023-24. Action Plan.

461. One of the common measures stakeholders thought would usefully tackle flytipping from waste carriers was through reform of waste handling processes to tighten up the current waste carrier licencing system.ⁱNet Zero, Energy and Transport Committee. Official Report, 21 November 2023, col 23 and written submissions including Resource Management Association Scotland, Moray Council and Aberdeen City Council. We were deeply concerned by evidence from private waste companies and other stakeholders which narrated the relative ease in which operators can register for, and obtain, a waste carriers licence in Scotland. A representative of the Resource Management Association Scotland told us?

     "I believe that a waste carriers licence involves an online application and that there are not really any background checks or anything like that. You just click the button, pay the money and get your licence."ⁱNet Zero, Energy and Transport Committee. Official Report, 21 November 2023, col 23.

462. The Minister said improvement to the current systems would be taken forward through reforms to the 'integrated authorisation framework' and did not require primary legislation.ⁱⁱⁱNet Zero, Energy and Transport Committee, Official Report, 5 December 2023, cols 46-47.

463. SEPA said they were working with the Scottish Government to help design the new licensing arrangements with a view to "making it easier to keep criminals out of the waste business and enable SEPA to revoke authorisations". However, they also called for amendments to be made to Section 16 of the Bill to add operating a waste management activity without an authorisation under the Environmental Authorisations (Scotland) Regulations 2018 to the list of laws to which enforcement powers could be applied. ⁱWritten submission from SEPA.

467. Section 17 of the Bill modifies the Regulatory Reform (Scotland) Act 2014 (the 2014 Act) to insert a Section 14A providing regulation-making powers to the Scottish Ministers to impose duties on persons to publicly report on information relating to waste and surplus.ⁱCircular Economy (Scotland) Bill, Section 17. Failure to comply with reporting requirements could result in enforcement action set out in the 2014 Act.ⁱⁱRegulatory Reform (Scotland) Act 2014, Schedule 2.

468. The Policy Memorandum says the purpose of these measures is to "encourage innovation to tackle wasteful practices and increase efficiencies".ⁱⁱⁱPolicy Memorandum, paragraph 120. The Scottish Government has said it intends to initially introduce obligations on food waste reporting.^ivLetter from the Minister for Green Skills, Circular Economy and Biodiversity to the Net Zero, Energy and Transport Committee on the Circular Economy Bill - 13 October 2023. The draft Circular Economy and Waste Route Map 2030 also outlines that, further to the implementation of mandatory food waste reporting, the Scottish Government will also explore other reporting requirements for clothing and construction waste.^vScottish Government (2024) Scotland?s Circular Economy and Waste Route Map to 2030 Consultation.

469. The Policy Memorandum says that future regulations will be drafted following stakeholder engagement and the production of detailed impact assessments. It also indicates that future regulations in this Section would "need to take into account the potential need for exemptions, for example for smaller businesses."^viPolicy Memorandum, paragraph 127.

470. The Delegated Powers and Law Reform Committee noted that regulations made with regards to mandatory reporting are subject to the affirmative procedure if it modified primary legislation, with any other regulations subject to the negative procedure. It explained that the scope of regulation-making power "is a limited one to specify persons to make information publicly available in the manner specified". That Committee was therefore content with the approach to regulations associated with this Section of the Bill.^viiDelegated Powers and Law Reform Committee. 8th Report, 2023 (Session 6). Delegated powers in the Circular Economy (Scotland) Bill at Stage 1(SP Paper 461). 274

471. Evidence collected regarding provision of mandatory waste reporting requirements focused on the following issues?

     • The benefits of greater transparency and accountability in incentivising behaviour change;^viiiWritten submissions including Quakers in Scotland, Too Good To Go and Resource Management Association Scotland.

     • Practical questions on how information would be gathered and articulated;^viiiNet Zero, Energy and Transport Committee. Official Report, 26 September 2023, cols 27 and 28 and written submissions including Glasgow City Council, Scottish Wholesale Association and The Food and Drink Federation.

     • Impacts of additional reporting requirements on businesses;^viiiNet Zero, Energy and Transport Committee. Official Report, 26 September 2023, cols 6, 13 and 27 and written submissions including Scottish Retail Consortium, McDonald's UK and Scottish Grocers' Federation. and

     • Definitions used in this Section of the Bill.^viiiNet Zero, Energy and Transport Committee. Official Report, 26 September 2023, cols 27, 28 and 29 and written submissions from British Soft Drink Association, The Food and Drink Federation and Scottish Chambers of Commerce.

472. Stakeholders supportive of these powers thought they could help to deliver greater transparency and accountability for waste generation, and incentivise circularity in the wider supply chain.ⁱNet Zero, Energy and Transport Committee. Official Report, 3 October 2023 col The UKRI CircularChem Centre, Quakers in Scotland, Scottish Environment LINK. It was noted that many businesses were already showing leadership in relation to waste reporting by taking voluntary actions such as signing the UK Plastics Pact and the Courtauld Commitment.ⁱNet Zero, Energy and Transport Committee. Official Report, 26 September 2023, col 17 and 27 and written submissions including Too Good To Go, Olio Exchange Limited and SEPA. Despite this, some stakeholders said there was reluctance to share data voluntarily. ⁱWritten submissions from Feedback Global, Too Good To Go and UKRI Interdisciplinary Centre for Circular Chemical Economy.

473. Stakeholders also said that mandatory reporting would help to provide data to inform planning and policy development around constructing a circular economy.ⁱNet Zero, Energy and Transport Committee. Official Report, 14 November 2023, col 54 and written submissions from Quakers in Scotland and Stirling Council. It was suggested that information collected through reporting mechanisms could inform the circular economy strategy and statutory targets and support businesses in making progress towards more circular practices.ⁱNet Zero, Energy and Transport Committee, Official Report, 28 November 2023, cols 52 and 53 and written submission from Stirling Council. The Minister said food waste and surplus data would be a tool in making progress towards food waste targets.^vNet Zero, Energy and Transport Committee, Official Report, 5 December 2023, col 38. A Scottish Government official said that this data would also help to inform the development of digital waste tracking across the UK.^vNet Zero, Energy and Transport Committee, Official Report, 5 December 2023, col 39.

474. Greater accessibility of information was identified as an important way of driving behaviour change amongst consumers. Consumer Scotland told us that it was often challenging for consumers to make sustainable decisions as it was difficult to assess the environmental credentials of products and businesses.^viiiNet Zero, Energy and Transport Committee.Official Report, 7 November 2023, col 48. Transparent reporting was seen as a way to rectify this and provide a powerful incentive for businesses to adopt responsible and sustainable practices in pursuit of enhancing brand reputation amongst consumers.ⁱWritten submissions including UK Environmental Law Association, Too Good To Go and Scottish Youth Parliament.

475. Stakeholders also highlighted the economic benefits offered by mandatory reporting requirements. Zero Waste Scotland said many businesses they have worked with saw noticeable benefits from embracing new ways of measuring waste and resource as this information can drive efficiencies.ⁱNet Zero, Energy and Transport Committee. Official Report, 3 October 2023 cols 55 and 56. A number of stakeholders also noted that, if implemented successfully, reporting requirements could open up social opportunities by incentivising businesses to work in partnership with third sector groups such as charities and food banks to redistribute and reuse surplus products.ⁱNet Zero, Energy and Transport Committee. Official Report, 3 October 2023 col 56 and written submissions including Scottish Wholesale Association,Too Good To Go and Biffa Group Group and Company Shop Group.

476. It was suggested future regulations should focus on products that maximised environmental and social benefits. ⁱNet Zero, Energy and Transport Committee. Official Report, 14 November 2023, cols 52 and 53 and written submissions including Consumer Scotland, Fareshare Scotland and Aberdeen City Council. Another consideration was the economic value of products and whether they contained any rare minerals, metals or other high value materials that could be recovered for further use. Individual products suggested by stakeholders also included?

     • Food waste - the environmental impact, coupled with the wider social opportunities, including tackling poverty and inequality, were mentioned consistently by stakeholders as a reasons for mandatory reporting of food waste.ⁱWritten submissions including Glasgow City Council, Dundee City Council and Fareshare Scotland.

     • Textiles - clothing was identified as a particularly problematic waste stream with a high carbon impact. Stakeholders noted that measures in this Section of the Bill could be a useful tool to encourage behaviour change around fast fashion.ⁱNet Zero, Energy and Transport Committee. Official Report, 14 November 2023, cols 52 and 53 and written submissions from Glasgow City Council, Marine Conservation Society and Scottish Environment LINK.

     • Construction waste - Despite the large contribution to Scotland's overall waste, stakeholders said the sector lacks sufficient data. Reporting requirements could be useful in generating evidence to support greater circularity in the sector, which in turn could translate to a noticeable improvement in Scotland's progress at a national level.ⁱWritten submissions including UKRI Interdisciplinary Circular Economy Centre for Mineral-Based Construction Materials, Stirling Council and Resource Management Association Scotland.

     • Electronics - stakeholders said the creation of appliances and batteries required processing of rare minerals such as lithium as well as metals that were high in carbon production and resource intensive. Reporting requirements provided an opportunity to address current items such as single-use vapes which were deemed to be particularly bad for the environment.ⁱNet Zero, Energy and Transport Committee. Official Report, 14 November 2023, cols 52 and 53 and written submissions including Glasgow City Council, Olio Exchange Limited and Scottish Environment LINK.

477. Stakeholders said they were unclear on how businesses would collect, present and publish their data. They called for the production of robust guidance to support businesses with this process and training their staff with understanding new responsibilities.ⁱNet Zero, Energy and Transport Committee. Official Report, 26 September 2023, cols 27 and 28 and written submissions including Glasgow City Council, Scottish Wholesale Association and Federation of Small Businesses. Businesses sought clarity on expectations of them in fulfilling reporting duties, and how this information would be used.ⁱNet Zero, Energy and Transport Committee. Official Report, 26 September 2023, cols 27 and 28.

478. Some stakeholders said reporting metrics must be standardised for comparisons to be drawn between businesses, and to enable effective monitoring to take place.ⁱNet Zero, Energy and Transport Committee. Official Report, 26 September 2023, col 28 and written submissions from Amazon UK, Scottish Youth Parliament and Feedback Global. Some stakeholders called for data reported under future regulations to be made publicly available, in an accessible format for the wider public. Feedback Global said information could be published on business websites and statistics evaluated and publicly retained by SEPA.ⁱWritten submission from Feedback Global.

479. The Minister said she would engage with businesses to ascertain best practice within industry about public reporting to establish a benchmarked approach to the roll out of new requirements. She noted that because around 60 businesses already voluntarily report publicly on waste, there was "no need to reinvent standards when there is already really good industry practice".^vNet Zero, Energy and Transport Committee, Official Report, 5 December 2023, col 39.

480. Concerns were raised about the additional burdens placed on businesses as a result of proposed mandatory requirementsⁱNet Zero, Energy and Transport Committee. Official Report, 26 September 2023, cols 6, 13 and 27 and written submissions including Glasgow Chamber of Commerce and Scottish Beer & Pub Association. and about how provisions might operate in practice, noting that many businesses already report waste at a UK-level and additional requirements would increase administration and costs.ⁱNet Zero, Energy and Transport Committee. Official Report, 26 September 2023, cols 6, 13 and 27 and written submissions including Scottish Retail Consortium, McDonald's UK and Scottish Grocers' Federation. However, a number of businesses were also supportive of new requirements and noted the potential benefits offered by waste reporting.ⁱWritten submissions from Amazon UK and Federation of Small Businesses.

481. Whilst there was recognition that larger multinational organisations would be capable of absorbing costs of implementing new data collection and reporting processes to comply with new requirements, it was noted that SMEs would be disproportionately affected.ⁱScottish Chambers of Commerce, Scottish Beer & Pub Association and Feedback Global. This was because they may struggle to afford the time and resources needed to fully comply with new administrative regulations. Therefore, we heard calls for specific consideration to be given to how the Scottish Government can best support smaller businesses in recognition of the specific challenges they faced.ⁱWritten submissions including Feedback Global, Scottish Wholesale Association and Too Good To Go. This included exploring phased implementation or exemptions from reporting requirements.

482. The Minister said she was cognisant to concerns from businesses and that the Scottish Government was already working on a detailed set of proposals for mandatory requirements to give industry the clarity it needs for the introduction of these laws as soon as possible.^viNet Zero, Energy and Transport Committee, Official Report, 5 December 2023, col 38.

483. Section 14A states that reporting requirements may be applied to "persons of any specified description", before going on to say that Scottish Ministers may require persons to make public data on "anything stored or disposed of by them".ⁱCircular Economy (Scotland) Bill, Section 17. We were told further clarification was needed on how this power would be used and what it would cover.ⁱⁱWritten submissions from NFU Scotland and Fareshare Scotland.

484. Some stakeholders highlighted the positive reasons for extending mandatory reporting to encompass all aspects of supply chains, and to include the agriculture and manufacturing sectors.ⁱⁱNet Zero, Energy and Transport Committee, Official Report, 28 November 2023, cols 52 and 53 written submission from Nourish Scotland. It was also noted that local authorities and waste management organisations were already tasked with reporting waste to SEPA through other means. There was also a suggestion from stakeholders that there was a lack of available data on the extent to which businesses in Scotland are engaged in reuse and remanufacturing, and recommended considering whether reporting requirements in the Bill could be used to increase understanding in this area.ⁱⁱⁱNet Zero, Energy and Transport Committee, Official Report, 28 November 2023, cols 52 and 53.

485. Business stakeholders and producers told us a lack of detail on the face of the Bill about new requirements had created unwelcome uncertainty. Stakeholders from the food and drink sector were particularly concerned as they store large numbers of ingredients and different equipment. This meant waste statistics could be portrayed publicly in a way that did not take into account any contextual factors or considerations behind these numbers.ⁱⁱNet Zero, Energy and Transport Committee. Official Report, 26 September 2023, cols 27, 28 and 29 and written submissions from British Soft Drink Association, The Food and Drink Federation and Scottish Chambers of Commerce. The Food and Drink Federation Scotland told us?

     "Say a manufacturing process creates a lot of by-products that are not fit for human consumption. That would come across as the producer having a huge amount of waste and people would say, ?That is food waste. Those are things that could be going to feed people.? However, that will not be the case if the byproducts are bones, shells and peelings."^vNet Zero, Energy and Transport Committee. Official Report, 26 September 2023, col 29.

You can read Minutes of the Committee's meetings at the Scottish Parliament website: Net Zero, Energy and Transport Committee - Meetings

Meetings at which evidence was taken:

• 26 September 2023- Business representatives

• 3 October 2023 ? Environmental public bodies

• 31 October 2023 ? Scottish National Investment Bank

• 7 November 2023 ? Consumer Scotland

• 14 November 2023 ? Environmental non-governmental organisations

• 21 November 2023 ? COSLA, Solace and private waste management representatives and Local authorities

• 28 November 2023 ? International organisations and circular economy academics and experts

• 5 December 2023 ? Scottish Government

The Committee ran a call for views which closed on 1 September. You can read 117 published responses at the Scottish Parliament website: Published responses for Circular Economy (Scotland) Bill - Scottish Parliament - Citizen Space

All other correspondence received relating to the Committee's scrutiny is published and available to read at the Bill's Stage 1 homepage.

The Committee also ran an online discussion on the general principles of the Bill. You can read comments from the 98 individuals who took part in this forum at the following webpage: Circular Economy (Scotland) Bill.

As part of its consideration of the Bill, the Committee visited?

• the Binn Group, a waste and resource management company, at its site in Glenfarg, Perthshire on 8 November;

• the Edinburgh Remakery, the Edinburgh Tool Library and a refill shop called WeighToGo in Leith, Edinburgh on 20 November; and

• Change Waste Recycling, a recycling and waste management company at its Office in Edinburgh on 30 November.

The below is a list of themes discussed during these events.

Reuse/repair

• There are economic opportunities for businesses looking to make products last;

• Taking, repairing and reselling business model can be highly profitable;

• There are networks between businesses, third sector and charities, delivering social and environmental benefits for communities;

• Some products are built with the sole purpose of breaking down to ensure a new one is purchased by the consumer;

• When goods and products are in a state of disrepair, they may have materials that can be reused and repurposed;

• Reuse and repair hubs can act as a space for community to come together and as a means of addressing social isolation; and

• Accessibility of reuse and repair facilities is important to the growth of the sector.

Consumer behaviours

• Advantages of sustainable characteristics in products were driving down costs for consumers;

• Consumers are now more environmentally conscious in their purchases;

• Provision of single-use products can at the same time offer an opportunity to educate customers about reusable alternatives;

• There is a perception amongst the public that when an item or product breaks it is unfixable or is too costly to do so;

• Two key drivers in changing consumer behaviour are convenience and cost.

Future-proofing waste infrastructure

• There are personal data considerations for how information within waste streams is managed;

• There are challenges and opportunities for source segregation model for waste collection services vs dry mixed recycling;

• Public awareness and education should be a core principle of service provision;

• The growth in anaerobic digestion facilities;

• Assigned labelling scheme that is standardised across Scotland as a tool to maximise good behaviours;

• Suggestions about more uniform approaches to service provision across public and private sectors;

• Consideration of local geographic and demographic needs around waste management;

• The need for investment in the correct infrastructure to process materials closer to source; and

• Spatial planning of facilities for processing and reprocessing.

Issues with waste management processes

• Loss of resources and energy from contamination for other regenerative processes;

• Significant problems with recycling of food waste;

• Confusion amongst consumers about what to recycle and how, with dry mixed recycling collection services and other waste streams easily contaminable;

• Most reprocessing facilities only have the capacity to recycle certain PET materials and not other plastics;

• Outdated regulatory framework for waste management and handling;

• Lack of incentives for recycling operations to grow and accept new materials; and

• Contamination of food waste caused by plastic bag use for disposal.

Education

• Labelling and instructions on recyclable products should be clearer for consumers;

• There is confusion amongst consumers about what can and can?t be recycled, leading to contamination of recycling or recyclable goods end up in landfill;

• Better understanding of impacts of single-use items;

• Educational activities must be for purpose of informing and helping, not condescending;

• Link between sustainability and mental health awareness;

• The aim of making it as easy as possible for people to make the right decision; and

• ?Wishcycling? a common problem in Scotland (putting items in the recycling bin in the hope they will be recycled).

Funding and investment

• The funding landscape can be tricky to navigate;

• Access to advice and support for applying for funding can vary;

• Short term grants can be welcome but do not allow longer term resource planning;

• Funding constraints can often mean a difficult trade-off for organisations between social goods and maintaining financial stability;

• Investment can come from national and local resources, but also individual investors and philanthropists; and

• Investment to grow circular activities and initiatives could lead to transformational impacts for economy and society.

International best practice

• Supermarkets and retailers in Switzerland use very little single-use plastic while still keeping food and perishables fresh; and

• The Welsh uniform system of recycling services was viewed as highly effective.

Challenges

• Persuading consumers to choose sustainable alternatives;

• Cost of living crisis and how it is influencing consumers behaviours;

• Awareness of the circular economy and why it is important;

• Access to capital investment to grow capacity and output;

• Reliance on grant funding as part of overall budget;

• Start-up investment and overhead costs required to implement and operate bespoke sustainable infrastructure and facilities;

• Advice and support available to help encourage small and medium sized enterprises to navigate funding and policy landscapes;

• Access to skilled labour with specific expertise relating to the circular economy;

• The cost of educational and apprenticeship programmes to develop skills staff;

• Advantages available to businesses with linear models and practices;

• Tough market conditions for circular SMEs.

Opportunities

• There is now a strong desire for consumers to buy more sustainably;

• Increasing interest amongst consumers for circular business models;

• Circular economy is at the forefront of technological advances;

• Linear companies looking to implement new sustainable practices are working with circular businesses to share resources and networks;

• Harnessing innovation a competitive advantage for circular businesses;

• The existence of a community of circular economy businesses and organisations which are able to support each other;

• Chance to rethink supply chains to make them more sustainable.

Impacts

• Significant environmental impacts from helping consumers to reduce carbon and material footprint;

• Circular economy organisations can develop strong workforce of volunteers because of their sustainable mission to help drive forward their work;

• Supporting environmental change in global supply chains;

• Creation of job opportunities;

• Helping to upskill the labour force;

• Social impact within communities by working in partnership with local charities and third sector groups;

• There is also an opportunity to develop skills, empowering individuals with the knowledge and expertise to help themselves;

• Supporting the public to develop new skills and behaviours to empower them with the ability to live more sustainably.

Circular Economy Bill and non-legislative support

• Measures to encourage non-circular businesses to adopt more sustainable models;

• Strategic financial interventions that encourage investment in circular businesses;

• Longer term funding mechanisms for circular businesses to allow them to plan ahead;

• Measures to place additional onus and responsibility for waste on producers;

• Reforms to local taxation and public procurement;

• Support for educational and apprenticeship programmes to train workforce with skills required for circular businesses;

• Funding for public awareness and marketing campaigns that help to drive behaviour change amongst consumers;

• Capital investment to help support sustainable infrastructure and facilities;

• Encourage networks of circular businesses to share best practice and work in partnership.

• Measures to encourage businesses to rethink their supply chains and design products in a more sustainable and reusable way.

• Section 6(1) Circular economy targets;

• Section 8(2) inserting new Section 78A into the Climate Change (Scotland) Act 2009: Restrictions on the disposal of unsold consumer goods;

• Section 9(4) inserting new Section 87A into the Climate Change (Scotland) Act 2009: Power to require imposition of charges for single-use items;

• Section 10(3) inserting new Section 34ZC(9) into the Environmental Protection Act 1990: Householder?s duty of care;

• Section 10(3) inserting new Section 34ZC(16) into the Environmental Protection Act 1990: Householder?s duty of care;

• Section 11(2) inserting new Section 46ZC into the Environmental Protection Act 1990: Household waste requirements;

• Section 11(2) inserting new Section 46ZD into the Environmental Protection Act 1990: Household waste requirements;

• Section 11(2) inserting new Section 46ZE into the Environmental Protection Act 1990: Household waste requirements;

• Section 12(2) inserting new Section 44ZZA into the Environmental Protection Act 1990): Code of practice on household waste recycling;

• Section 13(2) inserting new Section 47B into the Environmental Protection Act 1990: Targets for waste collection authorities relating to household waste recycling;

• Section 14(2) inserting new Section 88C into the Environmental Protection Act 1990): Littering from a vehicle;

• Section 15(2) inserting new Section 110C into the Environment Act 1995: Powers to search and seize vehicles, etc;

• Section 15(2) inserting new Section 110D into the Environment Act 1995: Powers to search and seize vehicles, etc;

• Section 17(2) inserting new paragraph 14A into schedule 2 of the Regulatory Reform (Scotland) Act 2014) : Duty to make information publicly available; and

• Section 18(1) Ancillary provision; and

• Section 19(2) Commencement.