A new report by the Chartered Institution of Wastes Management (CIWM) highlights considerations for integrating the Emissions Trading Scheme (ETS) into the Energy from Waste (EfW) sector.
The report, produced by Ceres Waste, Renewables, and Environment in partnership with CIWM, calls on UK ETS Authority to ensure that the cost allocation of ETS charges for the EfW sector fully reflects the waste composition and that there is a practical system for ensuring this is the case.
CIWM said it believes failing to do so will not fully incentivise the intended reduction in carbon in EfW feedstock, which it calls the “primary driver” for introducing ETS to the sector.
The report, “The Systemic Impact of ETS on the Resources & Waste Sector”, says that implementing ETS into the EfW sector from 2028 will significantly increase the cost of generating energy from residual waste through the UK’s network of EfW facilities.
Commenting on the potential challenges associated with implementing ETS in the EfW sector, CIWM’s Director of Policy, Communications and External Affairs, Dan Cooke, said: “The costs passed through to EfW must reflect the actual composition of their waste in order to incentivise those who have invested in measures to reduce fossil carbon content in their waste.
“Failure to reward this action would mean there is no business case for change and the ETS would effectively become an EfW tax.”
Failure to reward this action would mean there is no business case for change and the ETS would effectively become an EfW tax.
CIWM said that, whilst ETS won’t impact all stakeholders equally, gate fess will approximately increase by 50% across the board, which could result in an additional £660 million annual bill for UK local authorities.
More positively, the report outlines that implementing ETS into the EfW sector will also provide opportunities such as increased plastics separation, chemical recycling, and carbon capture and storage.
The CIWM report also emphasised the need to ensure that all the revenue collected by the ETS is ring-fenced for interventions that will increase recycling rates, divert fossil plastics out of residual waste, and support the UK in meeting its target of achieving net zero by 2050.
Cooke continued that one of the main issues to overcome is that EfW operators can “do little to influence” the composition of residual waste they receive from customers.
“Brands and manufacturers have the greatest ability to reduce the quantity of fossil content from residual waste through the material choices they make for their products and packaging,” Cooke said.
“These businesses, however, are not directly impacted by ETS, as costs are only passed back to the waste producer and not onto the supply chain.
“Plastic packaging is estimated to contribute 70% of the fossil carbon in residual waste. Selecting alternative materials and/or increasing the recyclability of the packaging would significantly reduce the ETS burden for waste producers and have the greatest impact on reducing carbon.”
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