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

Moving to a Circular Economy in the Process Sector warns that engineering solutions already exist or are emerging, but businesses lack the financial incentives, policy certainty and infrastructure needed to scale them.

The report argues that the transition from a “take, make, dispose” economy to one that keeps materials and resources in use for longer cannot be achieved through recycling alone. It requires a fundamental shift in how industry designs products and processes, invests in infrastructure and values resources.

The Institution is calling on the Government to take three key steps:

• Make reuse pay. Introduce measures such as resource taxation, recycled-content requirements and circularity standards in public procurement to make resource recovery and reuse more commercially competitive.
• Give industry long-term certainty. Establish stable regulatory frameworks, clearer standards and predictable carbon-pricing trajectories to give businesses the confidence to invest.
• Build the infrastructure for circularity. Prioritise investment in resource-recovery hubs, water recycling, carbon transport networks and industrial clusters that enable businesses to share resources and reuse by-products.

The report, which draws on a series of four webinars examining the process industries, identifies economic incentives, fragmented regulation, ageing infrastructure and a lack of consistent data as major barriers to progress.

It also highlights the importance of designing circularity into products, plants and infrastructure from the outset. Retrofitting systems designed around disposal and virgin materials can be costly and difficult, while decisions made today can lock in resource use for decades.

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 full report, Moving to a Circular Economy in the Process Sector, is available at:

www.imeche.org/docs/default-source/1-oscar/reports-policy-statements-and-documents/2026/moving-to-a-circular-economy-in-the-process-sector_rpt_spg.pdf