Energy-from-waste (EfW) is to brought within the UK Emissions Trading Scheme (ETS) from 2028 in line with the date advocated by industry bodies.
The Environmental Services Association (ESA) called this step “the most significant regulatory intervention to the UK waste industry in a generation” and one that would change the sector’s economics.
UK Government ministers and the three devolved administrations said a 2028 start date “balances the need to give stakeholders adequate notice and the need to decarbonise the waste sector as soon as possible”.
ETS had operated in other sectors since 2021 and replaced an earlier European Union scheme.
Businesses buy and sell allowances for every tonne of emissions they produce each year. Those that reduce emissions can sell ‘spare’ allowances to those that do not.
The ETS is to cover the burning of fossil material by all waste incinerators and the obligation will fall on their operators for monitoring, reporting and verification of emissions.
This would include conventional incineration, advanced thermal treatment and advanced conversion technology.
The newly formed Resource Recovery UK (RRUK) EfW trade body, founded by Cory, Encyclis, enfinium, Veolia and Viridor, had last week said the ETS include should waste incineration with and without energy recovery no earlier than 2028.
ESA climate and energy advisor Charlotte Rule said: “The expansion of the UK Emission Trading Scheme to EfW represents the most significant regulatory intervention to the UK waste industry in a generation.
“It will fundamentally change the economics of the sector, and impact all stakeholders across the value chain, including local government, waste producers and the general public.”
Rule said the ESA supported the 2028 start date as “a practical timeline that could provide the industry and local authorities sufficient lead-in time, provided other complementary decarbonisation and waste reduction policies are also implemented by Government – reducing the already significant burden on waste producers”.
She said implementation by 2028 must align with “the immediate implementation of key packaging and recycling reforms as well as increasing the minimum recycled content threshold for the plastic tax to 50%, which will help to reduce plastic content in the residual waste stream”.
Biogenic waste to landfill should end by the time the ETS starts and regulation should be used to minimise exports and waste crime, Rule added.
The 2028 start may though alarm local authorities as consultation responses noted most disagreed with the timing – preferring a phased-in approach – and a minority did not want waste included in the ETS.
Almost half of local authorities said they lacked enough information to say what steps would be needed before implementation and around half said contracts with operators would need to be renegotiated.
The Government said extending the ETS to waste could help reduce emissions by encouraging recovery of residual waste in ways that lower carbon emissions, and by providing incentives to invest in processes and technologies which remove fossil plastic and in carbon capture and storage.
It said the Climate Change Committee – a government advisory body – had called for the EfW industry to be included in the ETS “as soon as possible” and within this decade.
The 2028 start would give the industry and its customers time to prepare and would fall after the introduction of deposit return schemes and extended producer responsibility across the UK and consistent collections in England.
There will be a consultation on whether a phasing period should start in 2026 during which EfW operators would monitor their emissions but the ETS would not be active.
The Government said “consideration will be needed to situations where incineration is the best and only legal option” such as for health care, but did not say what this would involve.
Enfinium chief executive Mike Maudsley said: “We need to decarbonise the UK economy at pace, which is why we support the proposed inclusion of energy from waste in the UK Emissions Trading Scheme in 2028.
“Combined with banning landfill and minimising waste exports, this change could deliver billions of pounds of investment in decarbonising Britain’s waste infrastructure.”
Maudsley welcomed the inclusion of carbon capture and storage, which he said would “provide a regulated compliance market that will drive investment in high-quality carbon removal technologies such as energy-from-waste with CCS”.