In a report released today (25 April 2025), the Local Government Association (LGA) estimated that councils could be taxed up to £747 million in 2028, rising to £1.1 billion in 2036 – with a total cost over this period as high as £6.5 billion.
The ETS caps total emissions from high-polluting industries and allows companies to buy, sell, or trade emission allowances to incentivise reductions to support the UK’s net zero goals.
The scheme is set to include waste incinerators in 2028, but it is likely that the costs will be passed onto local authorities.
English councils manage 14.3 million tonnes of residual waste each year, with the vast majority being treated at Energy from Waste (EfW) plants.
The LGA estimated that 5.7 million tonnes is made up of fossil-based plastics.
Councillor Adam Hug, environment spokesperson for the LGA, said: “Councils want to see a reduction in carbon emissions and support the aims of the scheme, while encouraging recycling efforts, but to succeed we need to see the right incentive in the right places.
“Current proposals are hitting the wrong target. It will load billions of pounds of extra costs onto councils, who will have little choice but to cut back valued local waste and recycling services and net zero projects, while producers of fossil-based material avoid incentives to reduce what they produce.”
The LGA has criticised the scheme for lacking powers to encourage producers reduce the amount of fossil-based material put on the market or deliver the infrastructure to recycle plastics or capture carbon.
Ahead of the government Spending Review, which is set to conclude on 11 June 2025, councils have called on the government to rapidly review plans for the ETS extension to waste.
Knock-on effects of including waste in the ETS
The association warned that the ETS could force councils to cut back on services rather than targeting manufacturers to reduce plastic production.
The report warned this could include:
- Nearly 80% of councils reducing their overall waste and recycling services.
- A drop in the range of services provided by household recycling centres in 77% of councils.
- Falls in fly-tipping services in 65%, street cleaning and littering in 63%, and street bins provision in 60% of councils.
The report added that two thirds of councils said the costs would lead to reductions to local net zero schemes and green energy projects.
Hug added: “The Spending Review is an opportunity for government to review these proposals and force producers of fossil-based waste to face up to their responsibilities, by reducing the amount of plastic entering the market, instead of loading unaffordable extra costs onto already overstretched local councils.”
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