UK Emissions Trading Scheme

A UK Emissions Trading Scheme (UK ETS) is the carbon emission trading scheme of the UK. It is based on a cap and trade principle and replaced the UK’s participation in the EU ETS on 1 January 2021. The incineration of hazardous waste and municipal waste is presently excluded but a consultation was undertaken in 2022 to determine whether to include such activity with the main responses published on the 3rd July 2023 indicating an intention to include Energy from Waste from 2028, with further consultation on the implications by the end of 2023.

Context

A UK Emissions Trading Scheme (UK ETS) is the carbon emission trading scheme of the UK. It is based on a cap and trade principle and replaced the UK’s participation in the EU ETS on 1 January 2021. Under the Ireland/Northern Ireland Protocol, electricity generators in Northern Ireland remained within the EU ETS. The incineration of hazardous waste and municipal waste is presently excluded, but a consultation was undertaken in 2022 to include such activity with the main responses published on the 3rd July 2023 indicating an intention to include Energy from Waste from 2028, with further consultation on the implications by the end of 2023..

Background

The UK ETS applies to regulated activities which result in greenhouse gas emissions, including combustion of fuels on a site where combustion units with a total rated thermal input exceeding 20MW are operated (except in installations where the primary purpose is the incineration of hazardous waste or municipal waste). There are simplified provisions for hospitals, small emitters and ultra-small emitters.

The Climate Change Committee published a report to Parliament in June 2021 that recommended that Government consult on the introduction of a carbon tax (either as part of the UK ETS or a separate instrument) aimed at curbing emissions from EfW.

A consultation, which included the aforementioned point, ran between March 2022 and June 2022, with a call of evidence on expanding the UK ETS to include incineration with energy recovery and incineration without energy recovery by the mid to late 2020s. A key part of the consultation questions were included around the approaches suggested to determine the potential measurement of carbon from non-biogenic sources ('fossil carbon' primarily from plastics, originating from oil, within the wast stream):

• Individual Plant Monitoring: each plant measures fossil and biogenic carbon (either via radio carbon basis set out in ISO 13833:2013) or via balancing method via routine compositional analysis at the plant
• Emissions Factor Approach: using an estimate for composition of waste, which could be varied by geography, or for default waste composition.

Consultation Response

At the time of writing there was no consolidation of responses to the questions raised regarding the addition of EfW to the UK ETS. However, the LGA published their response in June 2022 where they set out their opinion that the UK ETS should not be extended to include incineration and EfW.