UK industry needs policy shake-up to unlock billions from circular economy, engineers warn

IMechE calls for urgent Government action to make reuse commercially viable, unlock investment and build the infrastructure needed to turn industrial waste into valuable resources.

The UK is missing a major economic opportunity by failing to create the right conditions for a circular economy, engineers have warned, calling on Government to overhaul incentives, regulation and infrastructure to help industry make better use of valuable resources.

A new report from the Institution of Mechanical Engineers (IMechE), Moving to a Circular Economy in the Process Sector, warns that while many of the engineering solutions already exist, businesses lack the financial incentives, long-term policy certainty and infrastructure needed to put them into practice at scale.

The report argues that moving away from the traditional 'take, make, dispose' model requires more than simply improving recycling. Industry must fundamentally rethink how it designs products, operates plants, invests in infrastructure and recovers materials.

IMechE is urging Government to take three key steps:<

• Make reuse commercially viable: Introduce resource taxation, recycled-content requirements and circularity standards in public procurement to make recovering and reusing materials more attractive to businesses.
• Provide long-term investment certainty: Establish stable regulation, clearer standards and predictable carbon-pricing trajectories to give industry the confidence to invest in new technologies and processes.
• Build the infrastructure: Prioritise investment in resource-recovery hubs, water recycling, carbon transport networks and industrial clusters where businesses can share resources and turn waste into valuable feedstocks.

Drawing on four webinars examining the process industries, the report identifies fragmented regulation, ageing infrastructure, inconsistent data and weak economic incentives as major barriers to progress.

It highlights practical opportunities already emerging across industry, from recovering materials from decommissioned wind turbines and reusing wastewater to converting existing refinery infrastructure to process waste-based feedstocks.
However, decisions made today will shape industrial resource use for decades. The report warns that retrofitting infrastructure designed around virgin materials and disposal can be costly, making it essential to build circularity into the design of products, plants and industrial systems from the outset.

Kahu Te Kani, Senior Policy Advisor at the Institution of Mechanical Engineers, said:

“Practical opportunities already exist across industry, including recovering materials from decommissioned wind turbines, reusing wastewater, converting existing refinery infrastructure to process waste-based feedstocks and recovering valuable resources from industrial by-products.

“Government needs to intervene to align a new circular economy with the UK’s Industrial Strategy and Net Zero objectives.”

The report calls for a more joined-up approach to industrial policy, arguing that creating the right commercial conditions for circularity would help businesses reduce waste, improve resource security and make better use of existing infrastructure.

Moving to a Circular Economy in the Process Sector is available to read here.