Facing rising ETS costs together
As one of the most significant policy shifts facing the waste sector, the Emissions Trading Scheme (ETS) is set to change how local authorities and other waste producers plan, budget and operate over the coming decade.
To help the sector understand what’s coming, SUEZ recycling and recovery UK recently hosted a webinar titled ‘How can waste producers minimise ETS costs’, chaired by SUEZ’s Environment and Sustainable Development Lead Leigh Broadhurst. The expert panel included Ceres Waste Renewable Environment Director Jamie Warmington, ADEPT Waste Group Co-Chair and West Suffolk County Council Environment and Waste Assistant Director Steve Palfrey, and Circular Economy activist/Sustainability leader and West London Waste Authority’s former Chief Executive Emma Beal.
A poll at the start revealed that only 4% of attendees felt very prepared for ETS, while 60% said they were only beginning to understand the risks and opportunities. Ten percent still saw it as a ‘tomorrow problem’. The general sense at the webinar was that the clock is ticking, but there’s still time to act.
What ETS actually means for waste producers
At the heart of ETS is a simple principle that the more fossil-derived carbon in your residual waste treated via an energy from waste facility, the more fossil CO2 it emits, and the higher the cost to dispose of it due to the cost associated with the carbon emissions. EfW operators will need to buy carbon allowances, and those costs will eventually land with local authorities, businesses and others who produce waste.
The impact of the carbon price introduced is expected to start at around £50 per tonne of residual waste in 2028 (due to it containing ~50% fossil based materials) and rise to around £90 per tonne by 2035. Before then, between 2026 and 2028, EfW operators can take part in a voluntary monitoring, reporting and verification period to get a clearer picture of their emissions.
The panel estimates that, based on today’s waste flows, ETS could add around £300 million a year in 2028 to £600 million a year in 2035 to disposal costs if nothing changes. Plastics are the biggest driver as they already account for a notable share of EfW costs and could more than double their contribution by 2040 because of their carbon intensity.
When small shifts can have a big impact
One encouraging finding is that some of the most effective actions are already familiar. Simpler Recycling reforms, which will shape how materials like plastic films and food waste are collected, could reduce ETS-linked costs by 37% to 52%. That’s because they help keep fossil-based plastics out of general waste.
During the webinar, people were asked which actions they could implement to reduce residual waste content. The top picks were tackling textiles, electricals and absorbent hygienic products (26%), reduced residual waste collection frequency (24%), boosting re-use and prevention (18%), sorting more plastics out of residual waste at facilities (18%), and refining Simpler Recycling collections (14%).
What stood our is that these options, such as textiles, batteries, AHPs and certain plastics, are not the biggest materials by weight. They’re smaller in tonnage but much bigger in carbon impact, and in the case of waste electrical and electronic equipment (WEEE), they also carry clear safety risks.
One panellist highlighted that avoiding a tonne of residual waste could save £110 to £175 and diverting a tonne into recycling could save £68 to £122 when carbon costs are included.
Tough choices for local authorities
For councils, ETS arrives at a time when many are already stretched. Alongside Simpler Recycling, Extender Producer Responsibility and the Deposit Return Scheme, ETS is another major reform to plan for, and one that comes with a price tag.
A point raised in the discussion was the lack of clarity about how ETS costs will be funded. Without that, building long-term business cases becomes difficult. Even when an intervention makes sense on paper, finding the upfront budget can be hard.
Another issue is what happens after materials are separated. Taking plastics or nappies out of general waste is helpful for carbon reduction, but not all of those materials have strong end markets yet. Any change needs to consider the whole journey from household or business to final treatment.
Carbon, not tonnage, will define success
One of the clearest messages from the webinar was that recycling rates don’t tell the full story. High-tonnage materials may shift the headline numbers, but they aren’t always the biggest source of emissions. Some lower-tonnage materials, like composite plastics, textiles, batteries and electricals, punch well above their weight when it comes to carbon.
Removing these items from residual waste, whether through better design, re-use, separate collection or service tweaks, can make a substantial difference to ETS exposure. And these kinds of changes line up neatly with the wider move towards a circular economy.
If there’s one practical takeaway for both businesses and local authorities, it’s that people need to know what’s in their waste. The fossil content of your waste stream will become a major cost driver, and it varies widely between producers.
What came across most strongly was that everyone will need a better sense of what’s actually in their waste, because some items will cost more than others under ETS. Throughout the conversation, there was a clear thread of working together. The reality is that no single organisation can deal with this on its own. Change is definitely coming, but there are practical ways to prepare for it.
If you missed the live webinar session, you can watch it on-demand here.
Download the SUEZ ETS report, ‘Strategic approaches to minimising emissions trading scheme costs for waste producers’, here.