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LIVE SECTOR REACTIONS: UK ETS consultation response

The waste and recycling sector has reacted to the release of the government’s response to the consultation on the UK Emissions Trading Scheme (UK ETS).

EfW
Image credit: Shutterstock

In the response, the government has confirmed that the Monitoring, Reporting and Verification (MRV) stage for the Emissions Trading Scheme (ETS) will begin on 1 January 2026.

The MRV stage will be voluntary without any legal obligations for operators to meet, but those who will be implicated are being encouraged by DESNZ to take part.

Find out more about the update here and see how the industry has reacted below.


North London Waste Authority (NLWA)

A spokesperson for the North London Waste Authority (NLWA) said: “It is welcome that the government has confirmed that local authorities will not be liable for full ETS costs having recognised the limited control we have over our waste composition, something we emphasised in our consultation response.

“It is now clear that, at least in part, this will be met through the inclusion of ETS costs in payments made via the extended producer responsibility for packaging scheme. While this is a positive step, this principle must be expanded to other materials so producers – rather than taxpayers – bear the full burden of the waste they create.

“The decision to review the scheme following a period of voluntary monitoring, reporting and verification is also a sensible one. At a time when the Public Accounts Committee has stated that local authority finances are in a ‘perilous state’ it is imperative that the plans and details of the scheme’s expansion do not have unintended consequences.

“We encourage the ETS Authority to publish the second response as soon as possible, to provide us with full details and certainty. In the meantime, we will continue to engage with government to ensure they follow through on efforts to decarbonise waste and to ensure the scheme does not unduly burden local authority finances.”


Veolia UK

Gavin Graveson, CEO of Veolia UK, said: “Today’s DESNZ announcement is welcome, but policy certainty is needed for investment.

Gavin Graveson, Veolia UK

“The UK ETS should be incentivising the right economic and environmental outcomes as we transition to a circular economy. To do this, the timeframes must align with the EU and we must implement the recycling legislation that will remove fossil plastics that can be recycled, out of the waste stream. Simpler Recycling, pEPR and a mandatory 50% recycled content threshold will deliver decarbonisation in the most efficient and effective way.

“We thank DESNZ for their extensive industry engagement on these issues and look forward to continuing working with them to provide further clarity on cost allocation, timelines and emissions measurement.”


Enfinium

Mike Maudsley
Mike Maudsley, Enfinium

Mike Maudsley, CEO of Enfinium, said: “The UK has demonstrated a world leading ambition to include carbon removal projects in the UK Emissions Trading Scheme by the end of 2029.

“This will significantly boost the economic case for waste to energy carbon capture facilities, which could generate millions of tonnes of high-integrity carbon removal credits to mitigate emissions elsewhere in the economy.

“The waste sector’s ‘MRV-only’ period in 2026 and 2027 provides a welcome opportunity for the waste industry to work with government and local authorities to ensure that a fair and accurate approach to monitoring emissions is developed ahead of full inclusion in the ETS in 2028.”


Environmental Services Association (ESA)

Jacob Hayler, executive director of the ESA, said: “The proposed monitoring, reporting and verification (MRV) period to 2028 can and should now be used to create a viable system which fairly and accurately attributes carbon emissions and associated costs through the waste value chain in a way that creates incentives to decarbonise waste and that dovetails with other waste policy reforms including the EPR regime for packaging.

Jacob Hayler, ESA

“It is essential that we have robust and comprehensive data upon which to design the details of the ETS regime as it relates to waste, so voluntary participation in the MRV period is not the ESA’s preferred approach, but we will continue to work closely with the UK ETS Authority – alongside our local authority partners – to participate in and inform the design of this once-in-a-generation policy reform.

“The inclusion of waste in the ETS, done correctly, could drive billions of pounds worth of investment in waste decarbonisation across the UK, but these investments will not be made until there is certainty over both the timing and detail of the reforms.

“It is right however, that no commitments have yet been made on implementation timescales in order to ensure that the scheme is designed well and will meet its intended outcomes. In the meantime, Government must ensure – as the ETS Authority acknowledges – that measures are put in place to mitigate the risk of unintended outcomes.”


Encyclis

Mark Burrows-Smith, chair of Encyclis, said: “The proposed expansion of the Emissions Trading Scheme to include Energy-from-Waste represents the biggest policy change within our sector for many years.

Mark-Burrows-Smith, Encyclis

“At Encyclis, we fully support the application of ETS to encourage improvements in waste reduction and recycling rates. However, the detail of policy application is most important in determining its success in lowering the carbon emissions associated with waste.

“The commencement of a voluntary monitoring, reporting and verification (MRV) period from a January 2026 allows time to assess what the best methodology should be and how cost pass-through could work in practice.

“This will be vital to avoid any unintended consequences that could undermine the waste hierarchy, while also ensuring costs apply where waste originates.

“This means that energy recovery facilities like ours can continue to fulfil an essential public service by safely and sustainably processing residual waste.

“At the same time, Encyclis continues to advance its own decarbonisation programme, including industry-leading plans to deploy full-scale carbon capture at our Protos ERF, and the build-out of a highly efficient cluster of infrastructure in the centre of England.”


RDF Industry Group

In a statement on LinkedIn, the RDF Industry Group said: “After nearly a year of waiting, the UK government has published an interim response on including waste incineration in the UK ETS.

“We welcome progress but raise concern over the lack of direction for RDF exports or EU alignment.

“85% of respondents flagged risks of leakage, but no stance on exports was set and imports remain absent from the conversation.

“RDF exports were acknowledged as important for balancing EfW capacity, but framed as “down the hierarchy” with landfill, overlooking the role that EU EfW facilities can play in efficiently processing waste at the regional level.

“There is no further clarity offered on UK-EU ETS alignment over waste, despite recent linkage commitments.”


Viridor

A spokesperson for Viridor said: “We welcome the government’s announcement yesterday on the ETS expansion, which is a strong step forward for the UK’s waste sector.

“Developing and testing carbon factors is vital to drive decarbonisation and ensure waste producers are rewarded for decarbonising their waste.

“Using the MRV period to test and develop this approach will help ensure an effective full ETS implementation in 2028.

“The support for the local authorities is very welcome as is policy to prevent waste leakage to landfill or export.

“We look forward to continuing to work closely with the government through this period and we are committed to playing our part in delivering a net zero, more circular economy.”


Rooted Environmental

Mike Brown, Rooted Environmental

Mike Brown, director of Rooted Environmental, said: “This is a pivotal moment for the waste sector.

“The MRV-only period gives operators a chance to shape the future of carbon pricing in waste.

“But the real test will be how the government balances decarbonisation incentives with practical implementation – especially for local authorities and EfW operators already under pressure.”


Want to see your reaction here? Email savannah.c@letsrecycle.com.   

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