Plans to end the annual dumping of more than one million tons of fish by EU vessels are being put before the European Commission.
Fishermen are forced to throw away catches under Euro-rules
The proposals come from the former chairman of the European Parliament's fisheries committee, Struan Stevenson.
Mr Stevenson, a Scottish Tory MEP, called it "an annual scandal".
He has drawn up a report for the committee's meeting in Brussels in which he calls for catches to be landed and turned into fishmeal and fish oil.
Mr Stevenson said it would help to meet the increasing demand for feed for Europe's fish farms.
Leaders of the Scottish Fishermen's Federation said there were advantages and disadvantages to the present system but that the MEP's idea was worth discussing further.
Under current policy, EU fishing boats have to dump at sea more than a million tons a year of over quota and undersized fish.
If they tried to land it, their skippers would face prosecution.
Europe's fisheries commissioner vowed earlier this year to help Scotland's beleaguered fishing industry.
During a visit to the north east, Joe Borg said there was "light at the end of the tunnel" for depleted stocks following years of decommissioning.
He added that he hoped fish stocks would improve sufficiently to put fishermen's minds at rest.