DESNZ confirmed the delay today (26 August 2026) in an update to the original ETS consultation page.
The new timeline has not yet been confirmed, with the government saying it will be set out “in due course”.
A statement from DESNZ read: “We are aware that a lack of certainty regarding expansion of the UK ETS to waste incineration is undermining the ability of local authorities and industry to plan and budget for the future.
“We can confirm that expansion of the UK ETS to waste incineration will not take place in 2028 as originally intended.
“A new timeline will be set out in due course, along with full details on final policy design, with sufficient time for the waste sector to implement.”
It was announced in May 2025 that the EU’s ETS and the UK scheme would be linked.
The EU confirmed last month that it would phase municipal waste incineration into its scheme between 2031 and 2034.
In the update, DESNZ cautioned that the EU ETS will still apply in Northern Ireland under the terms of Article 9 and Annex 4 to the Windsor Framework (formerly the Northern Ireland Protocol) – meaning it will still apply to waste incinerators.
The ETS caps total emissions from high-polluting industries and allows companies to buy, sell, or trade emission allowances.
The intention is that it incentivises reductions in support of net zero goals.
A voluntary Monitoring, Reporting and Verification (MRV) stage has been in place in the UK since 1 January 2026.
The MRV stage and original 2028 implementation date were both confirmed in the UK ETS consultation response which was released in July 2025.
Strain on local authority budgets
Local authorities had expressed concern that the ETS could see them face billions of pounds in “unavoidable costs” over the next decade.
In a 2025 report, 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 LGA criticised the scheme for lacking powers to encourage producers to reduce the amount of fossil-based material put on the market or deliver the infrastructure to recycle plastics or capture carbon.
Councillor Adam Hug, then Environment Spokesperson for the LGA, said at the time: “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.”
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