Observing the development of ETS
The inclusion of energy from waste (EfW) within the UK Emission Trading Scheme (ETS) has caused consternation amongst local authority waste managers who face the prospect of significant cost increases for residual waste treatment. As details of the scheme are set out, the waste industry’s attention has largely been focused on measurement, reporting and the charging mechanisms that will underpin cost calculation and the operation of the ETS.
The complexity of supply chains and divergent waste flows into respective EfW facilities perhaps drives the initial focus on these compliance, market, technical, and commercial considerations, particularly for EfW operators and waste service providers. But with very few local authorities directly operating EfW facilities, these aspects can feel indirect and several steps removed from the work of a Waste Management Officer. This leads to the question of what local authorities can do to prepare for the waste ETS?
WRM
ETS intentions & waste strategy options
One intention of a cap-and-trade initiative such as ETS is to drive behaviour and/or market change. The approach has previously been used to good effect in the waste industry in achieving high levels of landfill diversion. ETS attributed cost increases will apply the polluter pays and producer responsibility principles to carbon emissions from residual waste treatment. It will also support governments policy goal of halving residual waste generation by 2042.
On one hand, the cost increases resulting from these principles should work to drive the policy goal, although the hard reality of public sector finances perhaps provides greater imperative for change. Either way, the prospect of the waste ETS creates a compelling case for several strategy options which are in the control of Waste Management Officers, and which have seen limited deployment to date. Such strategy options are not only driven by the waste ETS scheme but are also consistent with the goals of the Environment Act and Simpler Recycling policy.
What should authorities be focusing on?
The overall quantity and fossil carbon content of residual waste are key inputs into the ETS cost calculation. Unlike the carbon price, which is set at an (all industry) ETS wide level, these factors can be influenced by local authority waste strategy through actions such as:
- Increasing waste compositional analysis – to fully understand the profile of managed waste streams.
- Waste minimisation activities – particularly on fossil intensive materials such as plastics, textiles and absorbent hygiene products.
- Exploring residual waste pre-sorting options – focusing on plastic extraction rather than the historical metals focus.
- Working with supply chains to support carbon capture and storage projects – as an integral part of future residual waste treatment contracts.
An imperative to act now
Waste strategy interventions often have a medium to long lead time and the future costs of the ETS, which will come into effect at the end of this decade, create an imperative to act now and in parallel with the commercial focus of EfW operators.
WRM have recently authored an ETS guide for local authority waste managers providing information on how to take these actions forward in an ETS ready strategy.
