The circular economy in Scotland’s Clean Heat transition: a systems-based understanding
Scotland’s move away from fossil fuel-based heating systems (e.g. gas and oil boilers) to low-to-zero carbon alternatives such as heat pumps and district heating – presents a significant opportunity to embed circular economy principles across the nation’s Clean Heat sector.
Decarbonising heat in Scotland
As the Scottish Government continues to support and develop legislative levers (Scottish Government, 2025), it is essential to consider the full life cycle impacts of these technologies - including the implications of their design, manufacture, installation, in-use phase, and inevitable decommissioning. For example, the removal of legacy fossil fuel-based and low carbon heating systems. This whole-system view helps identify where circular practices can reduce waste, cut emissions, and improve resource efficiency overall.
Scope of the research
Zero Waste Scotland commissioned Eunomia Environmental Research and Consulting to conduct a research project with the aim of improving understanding of the factors influencing the adoption of circular economy principles and practices in Scotland’s low to zero carbon heating transition in its buildings. This was achieved through delivery of a range of qualitative-based research tasks, designed to support exploration of the system wide dynamics and characteristics influencing the potential for increased circularity in Scotland’s Clean Heat transition. In doing so, it was possible to identify key stakeholders across the value chain, develop an understanding of the factors and decision-making processes influencing stakeholder behaviours, and assess the sector’s readiness to embrace circular opportunities.
The scope of the study focused on two core technologies, which were:
- Air-to-water heat pumps (HPs): Increasingly used in homes and businesses for their energy efficiency and low-carbon benefits.
- District Heating Networks (DHNs): Expanding in use to deliver low-carbon heat from centralised renewable sources like combined heat and power, waste heat, or geothermal energy.
Given the scale of heat decarbonisation proposed at the UK national level (National Audit Office, 2024), it is critical to support the growing knowledge base and understanding of how circularity can support a more resource efficient and just transition to low-and-zero carbon heating systems and technologies. The objectives established for the work undertaken included:
- Identifying lifecycle factors influencing circularity
- Mapping stakeholders and their roles
- Understanding barriers, enablers, and opportunities for circular practices
- Developing systems maps illustrating behaviours, relationships, and feedback loops
Key findings
Drawing on insights gathered from review of extant literature, interviews with sector stakeholders, and a dedicated workshop focused on gaining an understanding of the attitudes and perceptions of the circular economy across the wider Clean Heat ecosystem, analysis of the evidence was framed around the following key areas:
Understanding of circularity
Awareness of circularity is growing but, ultimately, remains uneven across the sector. Some organisations and large manufacturers have a deeper understanding on aspects such as design for durability and remanufacturing, while SMEs tend to focus more on aspects like reducing manufacturing or packaging waste.
In summary, circular practices exist but are not yet consistently applied across the Clean Heat supply chain.
Existing circular practices
Evidence shows that some practices (e.g., designing for longevity or repairing components) are happening, but they are not yet central to the delivery and installation of heat pumps or district heating networks.
Barriers, challenges, and opportunities
Some of the barriers identified related to decommissioning of existing heating systems and the challenges surrounding system compatibility, giving rise to concerns about system failure if retained parts are used.
Minimising the impact of decommissioning will be enabled by skilled professionals, planning, and consumer empowerment to enable reuse, cost savings, and environmental benefits.
Similarly, barriers exist for consumers who are discouraged by higher upfront costs often associated with the purchase and installation of more durable products, with limited awareness of whole lifecycle economic and environmental benefits.
By increasing awareness around the benefits of circular practices, it is very likely that demand for durability/ repairability, reuse, and product redistribution will be enabled and create the necessary supporting market conditions.
Scaling the opportunities for circularity will also require investment in training for heating system installers, technicians, and designers to enable better integration of circular practices across the value chain. Equally, public procurement, grant funding provision, and social housing policies can support circularity by setting targets for embodied carbon in products and systems being procured - thereby supporting service-based models and embedding circularity into funding and tendering processes early.
Measuring and reporting circularity
Tracking durability, reuse, refurbishment, recycling, and material flows will be essential. International examples, including the EcoDesign for Sustainable Products Regulation, show that regulation can accelerate adoption of circular design and reporting.
Stakeholder dynamics
Although consumers influence demand, most depend on installers and manufacturers to guide decisions - particularly during “distress purchases.” This reinforces the need for skilled professionals and accessible guidance.
Conclusions and systems maps
It is clear circularity is emerging across the Clean Heat sector but is not yet fully embedded. This project culminated in the creation of a series of eight behavioural systems maps that showcase an idealised set of systems in which circularity can be enabled and maximised.
The eight interconnected behavioural systems maps developed help to visualise the stakeholder behaviours and system dynamics for a specific circular practice under a defined behavioural theme and are listed below:
- Minimising the impact of decommissioning existing heating systems
- Demand for durable and repairable heating system components
- Reuse and redistribution of existing heating system components
- Adopting third-party ownership of heating systems
- Extending product lifespans through repair and maintenance
- Utilising refurbished and remanufactured component parts
- Maximising recycling; and
- Utilising lower embodied carbon products
Download the full report
Download the main report and summary report
Zero Waste Scotland’s Clean Heat team have been working in partnership with the Scottish Government for over a decade in support of Scotland’s heat decarbonisation agenda. Their efforts have focused primarily on policy development, delivering feasibility studies and developing business cases for potential heat networks and supporting local authorities with area wide strategies for the large-scale roll out of heat networks.
As a result of this work, Zero Waste Scotland has identified a significant opportunity for the circular economy to enhance and facilitate effective and efficient resource consumption and production as this system wide change is deployed across Scotland.
Additional downloads
A series of additional reports forming part of the wider research