The Scottish Circular Economy Bill: What It Means For Business
What is this bill and what does it seek to achieve?
Introduced by Climate Action Minister Gillian Martin in 2023 and unanimously passed on 26 June this year, the Circular Economy (Scotland) Bill aims to transition Scotland from a linear economic model to a circular economy. Where instead of materials being used and discarded, sharing, reusing, and recycling is prioritised to extend product lifecycles and minimize waste.
The bill mandates the creation of a Circular Economy Strategy by Scottish Ministers, addressing household waste, business practices, and enforcement. It also includes provisions to assess the carbon footprint of materials used in Scotland and support workers and communities during the transition to a circular economy, as well as modernise and improve waste and recycling services.
The bill will give Ministers the powers to:
- set local recycling goals, building on the experience of Wales, which has the best recycling rate in the UK
- set statutory targets for delivery of a circular economy to measure progress in transforming the economy
- restrict the disposal of unsold consumer goods, to prevent good products ending up in landfill
- place charges on single-use items like disposable cups to encourage the move to reusable alternatives
- give local authorities additional enforcement powers, allowing them to crack down on fly-tipping and littering from cars.
How will it specifically impact business?
The Bill's broad scope will require significant adaptation across Scotland, affecting everyone from government and businesses to households and individuals. Gillian Martin emphasized the bill’s wide-reaching impacts, affecting everything ranging from consumer behaviour to recycling practices. Also adding, “We have already seen businesses creating jobs by turning what we might otherwise throw away into valuable new products and services”.
To achieve change whilst keeping disruption to a minimum, Scottish Ministers are required to consult with as many appropriate people and organisations as possible and examine the key sectors with the most influence in terms of strategy delivery. For example, businesses producing single use products, like cups, have undergone these consultations for several years now. These companies arguably do have a lot of influence; however, the rising cost of living might deter companies from a simple price increase to counteract any charges introduced on single-use items. Then again, producing reusable alternatives and introducing reward schemes or discounts may prove more effective (a practice common in coffee chains globally)
The Bill’s potential restrictions on disposing of unsold consumer goods and charges on single-use items will significantly impact manufacturers and retailers, especially in the retail and hospitality sectors. If disposal of unsold stock is limited or banned, companies will need to explore proactive and reactive alternatives, such as reducing stock orders or redistributing goods through secondary markets or storage solutions.
Finally, businesses may be held liable for their drivers' actions as registered vehicle keepers. They will need to implement training and policies to address fly-tipping and littering from vehicles.
While the legislation is well-intentioned, it continues the trend of devolved regulation, presenting both challenges and opportunities for businesses, consumers, and public bodies.
We will only be able to ascertain the true impact of the Bill once we start to see the Scottish Government's Circular Economy Strategy and the secondary legislation contemplated by the Bill. It is likely to bring a significant shift in the economy, public life and our everyday lives in Scotland. Local authorities and businesses should, therefore, plan ahead for the potential opportunities that implementation of the Bill will bring about as well as the restrictions it will impose.