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.
The confirmation comes in the UK ETS consultation response which was released yesterday (21 July 2025).
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.”
In the response, the government confirmed it will pursue an integrated monitoring approach which will combine Carbon-14 monitoring and emissions factors.
Further details on the schemes including the financial implications are expected to be released in a second government response which will be released “as soon as reasonably practicable”.
The UK ETS is set to expand to include waste incinerators from 2028, with the monitoring period starting next year.
In May 2025, the UK government and EU announced plans to sync up their respective schemes.
The trading schemes cap total emissions from high-polluting industries and allow companies to buy, sell, or trade emission allowances to incentivise reductions to support the net zero goals.
‘Local authority support is welcome’
The government has proposed to align the UK ETS with extended producer responsibility for packaging (pEPR).
This would mean that the payments to local authorities for the management of in-scope materials under pEPR will include the cost of the UK ETS, where incineration is “an appropriate method of disposal for waste packaging”.
The consultation response added that the governments are considering further options for supporting local authorities.
A spokesperson from waste management company 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.”
‘Policy certainty is needed’
Gavin Graveson, CEO of Veolia UK, added: “Today’s DESNZ announcement is welcome, but policy certainty is needed for investment.
“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.”
See how others in the sector have reacted here.
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