OPINION: The year ahead promises to be a productive year judging by the one that just sailed by, which can never be described as uneventful.
Early in 2026, the Government-appointed Circular Economy Taskforce is expected to publish its long-awaited road maps for its priority industrial sectors aimed at shaping a generational change in the way we use materials and structure supply chains. This roadmap can’t come soon enough when placed in the context of a world economy which is presently only 7% circular. Their chosen pathway must be ambitious, long-term and link with the UK’s industrial strategy.
The last budget made clear the Government intentions of “relentlessly pursuing growth”; “investing for the future” and “backing business and unlocking innovation” with its mantra of “getting spades in the ground and cranes in the sky”.
A part of that economic growth can come from the productivity and innovation already underway from the adoption in 2025 of a raft of new legislation, although long in the making, it will shape our sector well into the 2030s. At the heart of this newfound regulatory impetus was Steve Reed, the then Defra Secretary of State. While his time was short lived – as with many Defra Secretary predecessors – we hope that the new Secretary of State, Emma Reynolds, ably supported by the continuity of Environment Minister Mary Creagh, can continue to drive forward the UK’s sustainability efforts.
The Autumn Budget and Spring Statement did however leave some level of uncertainty for the waste and recycling sector relating to landfill tax. Many within in the sector wanted to see harmonisation of the lower and standard rate as a genuine attempt to curb the abuse of the lower rate tax by waste criminals and support greater investment into more sorting facilities and recycling infrastructure. The construction lobby was resistant to this change fearing higher costs for building and so the change has been put on hold.
The spades and cranes, referred to by the Chancellor Rachel Reeves, may have won the day – for now at least – however the Government and Environment Agency need to identify other ways of curbing a worryingly growing level of crime. The commencement of digital waste tracking and the stronger application of the extensive powers of enforcement the Agency already possesses needs to result in more decisive action and convictions.
In May we will see the advent of mandatory digital waste tracking for any waste between EU member states under their DIWASS scheme – Digital Waste Tracking Shipment System. While that naturally brings UK operators into the remit of EU rules if they deal with overseas shipments, it won’t come as too much of a shock given most UK operators should be gearing up for UK domestic digitisation of waste transfer that comes into force in October for waste receivers relating to the reporting of waste movements. Digitised systems are more efficient than the paper-based systems that exist already and provide the industry with another useful tool to crack down on waste criminals and operators who may be tempted to cut corners at the expense of the environment.
While 2025 will be remembered as the year Extended Producer Responsibility (EPR) began to take shape, 2026 will be all about putting more money into the system finally helping us shift to a more closed loop way of managing our materials. This radical shift of both responsibility and funding from Local Government to the producers will underpin the shift to greater circularity for the decades to come. In 2026 the monies from the EPR levy will fund a harmonisation of collection services which will in time go to shift the long-time stagnated recycling rate in the UK towards the targets set.
The end of March 2026 will see “simpler recycling” for domestic users coming into effect and we can look to the successes and “could do betters” from how our sector helped business customers adapt to simpler recycling rules which came into effect on at the same time of year in 2025. Commercial waste and recycling customers shifted last April to a mandatory segregation of recyclables, food and residual waste. Within the commercial and industrial sectors we serve, CIRQLR and others have seen an increased demand for food collections – which is a positive for the entire UK recycling industry, as it has the effect of cleaning up the recyclable stream of materials re-entering the system.
Plastics tax – or the UK Plastic Packaging Tax – came into force on 1 April 2022, with a clear stated aim at the time “to provide a clear economic incentive for businesses to use recycled plastic in the manufacture of plastic packaging, which will create greater demand for this material”. The evidence from both 2024 and 2025 is that the tax has failed to deliver on those aims with a plastic recycling sector under severe pressure and several notable business casualties last year. The tax rose for two years in line Consumer Price Index.
In November 2023 the former administration said it would “consider introducing an escalator to the rate of the Plastic Packaging Tax and minimum recycled plastic threshold in the future”. That has yet to happen and the current Government chose not to increase the plastics tax, but it should at least enforce the current scheme which has proved ineffectual and is routinely bypassed by imported volumes purporting to contain recycled polymer.
Energy from Waste faces the introduction of the Emissions Trading Scheme (ETS) from 2028 bringing with it an estimated £50-tonne extra cost. Many in the sector believe ETS will be delayed to 2030 to align with Europe’s scheme although monitoring will begin in early 2026. One thing is certain though: the need for our waste stream to decarbonise quickly to prevent a huge increase in costs facing Local Government by the end of the decade when ETS begins. I can see calls this coming year and next for greater funding from the EPR monies to help accelerate this decarbonisation effort.
ETS meanwhile has not been the only thing on the minds of EfW operators as several delays to the delivery of new plants coupled to higher than usual downtime resulted in availability and price pressures in 2025. As we head into 2026 availability and gate fees are already softening with the prospect of around two million tonnes of new EfW capacity coming into commissioning over the first half of the new year.
2026 will be the year when the long talked about Deposit Return Scheme (DRS) begins to put some roots down across England, Wales, Northern Ireland and Scotland. The DMO – or UK Deposit Management Organisation – was officially formed in 2025 and has been putting into place the framework to ensure DRS can manage single-use plastic and metal drink containers and by October 2027. This will see the eventual full roll-out of reverse vending machines into retail stores across the nations to collect the 30 billion drinks containers we consume. It is a huge and ambitious organisational project to implement. The prizes on offer are, however, considerable with around 400,000 tonnes annually of PET/Aluminium/Steel to capture, a reduction in littering and the potential for charitable funding providing the icing on the cake.
Lastly on a personal note, the reveal of my new entity CIRQLR Group in April 2025 marked an intensive period of development from a standing start in 2023 to revenues of approaching £150 million by the end of 2025. I look forward to 2026 to the numerous opportunities CIRQLR, and our sector has ahead of it and the positive contribution we can together all make to the environment.
Never a dull moment and long may this continue.
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