Rubbish can generate top lacework (7)
I believe the answer is:
tatting
'lacework' is the definition.
(I know that tatting is a type of lacework)
'rubbish can generate top' is the wordplay.
'rubbish' becomes 'tat' (tat can mean rubbish or poor-quality material).
'can' becomes 'tin' (both are metal containers).
'top' suggests taking the first letters (in a down clue, the first letter is top).
The initial letter of 'generate' is 'g'.
'tat'+'tin'+'g'='TATTING'
(Other definitions for tatting that I've seen before include "Lace-making with a small shuttle" , "Knotted lacework" , "Making lace by hand" .)