Options for an environmental aggregates levy for Scotland which would continue to tax crushed rock, gravel and sand, have been explored by international environmental consultancy Eunomia in the report for the Scottish Government, Evidence Review and Illustrative Policy Options for a Scottish Aggregates Levy.

Eunomia analysed the recycling rate of construction waste materials achieved with a range of tax rates. Implementing the same taxation as the UK Aggregates Levy, lowering the tax rate, or removing the tax completely, would all result in no change in the amount of construction waste recycled in Scotland. However, a raised levy or a levy equivalent to the UK tax with an additional landfill tax for aggregates, could increase the amount of construction waste recycled by approximately half a million tonnes or one and a half times the total weight of the Forth Bridge.

According to a Zero Waste Scotland report produced by Eunomia, construction waste currently accounts for 44% of all waste arising in Scotland. The Scottish Environmental Protection Agency (SEPA) states that 29 million tonnes of construction aggregate are used annually, of which around 20% of the demand is met by recycled aggregates. The introduction of a Scottish Aggregate Levy could further help Scotland’s transition to a circular economy.

The Scottish Government commissioned the research in anticipation of the transfer of legislative responsibility for the Aggregates Levy, introduced in the UK in 2002, from UK Government to the Scottish Government. A tax on aggregates could be a way to reduce the negative environmental impacts of quarrying whilst increasing the recycling rate of construction materials by reducing the rate of primary material extraction.

The study reviewed the historical development and impacts of the UK Levy, as well as five natural resource taxes, and used these findings to develop illustrative policy options for a Scotland-specific Aggregates Levy. The implications of designing a Scottish-specific aggregates levy were informed by Eunomia’s previous in-depth review of resources taxes in Europe and work on the Scottish Landfill Tax. This work aimed to outline illustrative levy options that would generate a range of recycled aggregates production.

With the tax rate set below the UK levy rate, equivalent to it or the no-tax scenario, all three illustrative options resulted in the same rate of construction waste recycled as present, at 87%. The scenarios where the tax rate was set above the UK levy or with a levy equivalent to the UK rate with an additional landfill tax for aggregates, resulted in an 8% increase in the recycling rate of construction aggregates to 95%.

Tanzir Chowdhury, who project managed the research, said:

“It was great to work with Scottish Government to explore the potential for the levy. Our extensive experience in reviewing and modelling environmental taxes meant we were able to provide an in-depth quantitative assessment of scenarios for the potential operation of the aggregates levy in Scotland.”

The report will be used to advise Ministers on the options for the scope of tax rates for the Scottish Aggregates Levy with respect to the rest of the UK and the impact this will have on devolved tax policy and planning policy, as well as waste policies, given Scotland’s goal of achieving a Zero Waste Society.

Download the report from the Scottish Government website here.

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