Preparing for the waste emission trading scheme

From 1^st January 2028, energy from waste (EfW) is proposed to be included within the scope of the Emissions Trading Scheme (ETS). EfW operators will need to purchase ETS allowances for the fossil carbon emissions released from their operations, and the cost of those allowances is expected to pass through the supply chain, effectively increasing the cost of residual waste treatment.

The majority of UK local authorities are reliant on EfW for residual waste treatment and will be impacted by the pass through of additional costs of purchasing allowances.  One focus on the implementation of the waste ETS scheme is how carbon emissions will be measured as a basis for calculating ETS charges.  The approach to apportioning emissions between respective customers at an EfW and passing ETS costs through complex and multi-customer supply chains is another emerging focus.

Irrespective of the scheme develops in these measurement and reporting areas, it is clear that waste ETS will have a substantial impact on local authorities using EfW facilities.  The focus for local authority waste management Officers should therefor be on preparing for ETS by developing and implementing strategies that minimise ETS exposure.

WRM’s guide to preparing for waste ETS provides local authority Officers with background on the waste ETS, and identifies strategic and practical responses that can be adopted to mitigate ETS impacts.