LARAC welcomes confirmation that UK ETS will not be extended to waste incineration in 2028

The UK Emissions Trading Scheme (UK ETS) Authority has confirmed that the planned expansion of the scheme to waste incineration will not take place in 2028.

In its 2024 consultation, the UK ETS Authority set out an intention to include waste incineration in the scheme from 1 January 2028. This would place a carbon price on emissions from fossil derived waste incinerated at energy-from-waste facilities, including plastics, textiles and other materials, with potentially significant costs being passed through to local authorities.

A new implementation timeline will now be announced in due course, alongside full details of the final policy design. The UK ETS Authority has said that the waste sector will be given sufficient time to prepare for and implement the changes.

LARAC welcomes the decision not to proceed in 2028, which provides some immediate relief for local authorities. However, councils will need clarity about the revised timetable and final design as soon as possible to support effective financial and operational planning.

Gareth Rollings, LARAC Chair, said:

“Confirmation that the scheme will not be extended to waste incineration in 2028 will be a massive relief to local authorities across the UK, which were facing significant but still uncertain additional costs.

“Decarbonising the waste stream should be a priority for everyone across the sector, from producers and local authorities to regulators and waste operators, and the UK ETS could have an important role to play in this. However, introducing such a significant change in 2028 would have exposed local authorities to potentially substantial costs, with very limited ability to control or mitigate them.

“Local authorities are already dealing with considerable challenges in the markets for textiles, plastics and materials containing Persistent Organic Pollutants. It is essential that the final design of the scheme properly considers where responsibility lies and ensures councils are not left carrying costs for fossil derived materials that they did not produce and cannot remove from the waste stream.

“We look forward to working with the UK ETS Authority, DESNZ and DEFRA as the revised timeline and final policy design are developed, and to identifying how the UK ETS and other measures can support the decarbonisation of local authority waste streams.”

Through the Change Network sessions held across England earlier this year, local authorities highlighted to DESNZ, DEFRA and the Environment Agency the challenges the expansion could present. These included potentially significant cost pass-through, uncertainty affecting financial planning and the limited options available to councils to reduce fossil derived materials within the residual waste stream.

Toni McNamara, LARAC Executive Director, said:

“The Change Network sessions gave our members a valuable opportunity to speak directly to DESNZ, DEFRA and the Environment Agency about the practical and financial implications of extending the UK ETS to waste.

“Overwhelming feedback from members was clear, particularly around their ability to plan for uncertain costs and the limited measures available to mitigate them. We welcome the UK ETS Authority’s commitment to continued dialogue and will keep working to ensure that local authority experience helps inform the revised timeline and final policy design.”

LARAC welcomes the UK ETS Authority’s commitment to maintaining an open dialogue with the waste sector and will continue to ensure that the experiences and concerns of local authorities inform the development of the policy.