The Chartered Institution of Wastes Management’s latest report highlights potential problems that could arise once the sector is integrated into the Emission Trading Scheme (ETS) in 2028.

Launched today, the report, titled ‘The Systemic Impact of ETS on the Resources & Waste Sector’, warns of the financial problems ETS could cause for the sector. The UK could see a significant increase in the cost of generating energy from residual waste through EfW facilities and potentially cost LAs an additional £660 million annually.

There are some benefits to the scheme, including increased plastics separation, chemical recycling, and increased implementation of carbon capture and storage (CCS). However, failure to tackle the potential financial burden for EfW facilities and LAs risks preventing the intended reduction in carbon in EfW feedstock—the primary driver for introducing ETS to the sector.

In the report, CIWM explains that these additional costs need to be shared amongst all stakeholders within the waste chain. “The costs passed through to EfW must reflect the actual composition of their waste in order to incentivise those who have invested in measures to reduce fossil carbon content in their waste,” said CIWM’s Director of Policy, Communications and External Affairs, Dan Cooke. He added:

Failure to reward this action would mean there is no business case for change and the ETS would effectively become an EfW tax.”

One of the main issues that needs to be acknowledged is that EfW operators have little influence on the composition of residual waste they receive from customers. “Ultimately, it’s the brands and manufacturers that have the greatest ability to reduce the quantity of fossil content from residual waste through the material choices they make for their products and packaging,” Dan Cooke added. “These businesses, however, are not directly impacted by ETS, as costs are only passed back to the waste producer and not onto the supply chain.”

Plastic packaging is estimated to contribute 70% of the fossil carbon in residual waste, so selecting alternative materials or increasing the recyclability of packaging would significantly reduce carbon. Rates and consequently the burden of ETS.

The full CIWM report, containing all the key findings and recommendations, can be accessed here.