While the exact details of how the tax will be calculated “are still to be determined”, some have suggested that an £80 per tonne of carbon emitted would cost around £800 million, with some estimating up to £400 a tonne (see letsrecycle.com story).
In March 2022, the ETS (Emissions Trading Scheme) authority made up of the UK Government, Scottish Government, Welsh Government and the Department of Agriculture, Environment and Rural Affairs in Northern Ireland, consulted on proposals to develop the ETS. Yesterday’s announcement came in the response to this.
The ETS authority said it “recognises the concerns raised with the timings proposed and agree with respondents that adequate notice is required before including parts of the waste sector in the UK ETS, so that operators and their customers can prepare for implementation.”
“Therefore, we intend to include EfW and waste incineration in the UK ETS from 2028. This will give a five -year period for the sector and their customers to prepare for implementation. We are minded to include a two-year phasing period, from 2026-2028, where installations will monitor their emissions, but we will consult on this further.”
‘Significant’
In a response to the announcement, Charlotte Rule, the ESA’s climate and energy advisor said the expansion of the UK Emission Trading Scheme to energy from waste “represents the most significant regulatory intervention to the UK waste industry in a generation”.
She added: “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.”
Following the announcement, Ms Rule said the ESA supports the proposal and said the 2028 deadline is “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”.
Ms Rule concluded: “Any implementation by 2028 must align with supporting policies. These must include the immediate implementation of key packaging and recycling reforms as well as increasing the minimum recycled content threshold for the plastic tax to fifty per cent, which will help to reduce plastic content in the residual waste stream. Additionally, this must work alongside policy to nearly eliminate biogenic waste to landfill as well as the development of other regulatory drivers to minimise exports and waste crime.”
“The ESA is committed to continuing to work closely with Government, and stakeholders across the value chain, to ensure this policy can be implemented effectively and that it successfully minimises waste, increases recycling, and reduces emissions.”
ETS is the framework that will support the decarbonisation of UK industry
- Owen Michaelson, Encyclis
‘Welcome Move’
Meanwhile, the move was also welcomed by other EfW operators. Encyclis which has in its portfolio the operational Rookery South plant near Bedford and the Newhurst plant in Leicestershire which came online recently.
Owen Michaelson, chief executive officer of Encyclis, said: “As a business driven by sustainable waste management policy, we have already established our own decarbonisation roadmap. As part of that roadmap, we are partnering with the Department for Energy Security and Net Zero to develop one of the UK’s first commercial carbon capture and storage (CCS) plants at an EfW facility, at Protos ERF in Cheshire. ETS is the framework that will support the decarbonisation of UK industry but needs to be uniformly and consistently applied across all regions of the UK and across the whole waste management hierarchy.”
Decarbonise
Enfinium, which has six plants in its portfolio, also hold similar opinions.
Mike Maudsley, chief executive of the company, 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. Enfinium is already helping to reduce the UK’s emissions through five local decarbonisation hubs around the country. With carbon capture and storage technology, we have the potential to go one step further and become a carbon removals business.
“We also welcome the Government’s decision to include engineered Greenhouse Gas Removal technologies in the UK ETS. This will provide a regulated compliance market that will drive investment in high-quality carbon removal technologies such as energy-from-waste with CCS.
“We look forward to working with national and local government and our waste collection partners to develop a transition plan that ensures a smooth entry into the ETS that works for all of the waste supply chain.”
‘Alignment’
The government’s move was also welcomed by John Scanlon, chief executive for SUEZ recycling and recovery UK. he said the announcement “has been on the cards for some time” , though the company welcomes “the alignment of the implementation date with the proposed ban on biodegradable waste to landfill in 2028 and the inclusion of a transition period, with the caveat that the detail of the scheme should be clear within the next 12 months for the transition to be meaningful”.
Mr Scanlon added: “At the same time, this announcement serves to further reinforce the need for Government to move forward with reforms to Extended Producer Responsibility and consistency without any further delay, to ensure that the development of services and infrastructure to reduce the carbon content of the UK’s residual waste keeps pace with carbon charging.”
He added however that the decision to bring only one aspect of the waste sector into the ETS in 2028 “is somewhat disappointing given the potential unintended consequences this could create”.
“At Suez, we remain convinced that a sector-wide approach, although more complex to design, represents the most effective way to drive the resource efficient, circular economy we need to meet the UK’s net zero ambition. However, it appears that this door remains open and we would be keen to work with government on a more holistic, longer term approach.’
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