Plans for a national "zero waste" strategy have been unveiled by the Scottish Government.
The aim is to cut down on what is put into landfill
Measures include tough new targets aimed at increasing recycling and cutting down on waste sent to landfill and limiting waste incineration.
Additional funding of £7.5m for community recycling projects has also been announced.
Scotland will face hefty fines unless it meets European targets for reducing what goes into landfill.
In a statement to the Scottish Parliament, Richard Lochhead, secretary for the environment, proposed consultation on the new targets.
These include plans to increase the amount of municipal waste being recycled or composted to 60% by 2020 and 70% by 2025.
Other targets include limiting the amount of waste used to generate energy to a quarter by 2025 and stopping the growth of municipal waste by 2010.
Overall, Scotland should be aiming for a zero waste strategy, according to Mr Lochhead.
"Dealing with waste sustainably is fundamental to the future of Scotland and the future of the planet," he said.
"Our performance on waste has improved considerably in recent months with notable progress on recycling and reducing the amount of waste going to landfill.
"However, there is much more we need to do if we are to truly make a difference locally and globally and today we are setting out our new waste policy to make Scotland greener and a world-leader on waste management."
Householders should play their part by home composting, rejecting junk mail, re-using carrier bags and avoiding food waste, he added, while retailers should strive to reduce needless packaging.
Businesses should focus on reducing commercial and industrial waste.
Some local authorities want to turn the waste into energy by burning it, but incineration is controversial.
Mr Lochhead said large, inefficient incinerators - which he described as "white elephants" - are to be rejected.
Instead he favours smaller, more efficient plants combining heat and power, such as those recommended by the Sustainable Development Commission.
Stuart Hay, head of campaigns at Friends of the Earth Scotland, warmly welcomed the higher recycling targets and focus on small-scale, localised facilities.
But Scotland still had more to do to rid itself of the "dirty man of Europe" tag, he added, and additional investment and commitment was required.
He said: "The government needs to work hard to make this policy succeed."
Scottish Green Party co-convener Robin Harper MSP said: "It is grossly misleading for ministers to describe burning up to a quarter of Scotland's waste as part of a zero waste strategy, or for incineration to be described as renewable in any way.
"A true zero waste approach would start with reductions in excess packaging and the like, redesigning products for longer life, then identifying materials to be reused, before moving onto recycling and composting."