SUEZ commissioned report finds scope to mitigate potentially significant ETS costs

Ceres estimates that bringing energy-from-waste into the UK Emissions Trading Scheme in 2028 will see cost increases of around 50%, with gate fees set to rise by circa £48 per tonne. Whilst this increase will affect all customers of energy-from-waste facilities, with local authorities providing around three quarters of waste treated via energy recovery, the potential impact on local government budgets is significant.

By combining SUEZ’s unique and highly detailed data set on waste generated by UK homes and businesses over the past 8 years with publicly available data, Ceres was able to evaluate services and activities that could be deployed to reduce ETS costs by removing fossil carbon rich materials, such as plastics, from the waste stream.

The findings highlight that significant cost increases are not an inevitability – investing in improving waste minimisation, re-use and recycling services at both the kerbside and at HWRCs, will avoid ETS costs, potentially without impacting overall service costs. Councils with comprehensive recycling services who already top the annual recycling league tables still have opportunities to reduce their ETS bill by turning their attention to less commonly collected fossil carbon intensive materials, such as electricals and nappies. And for authorities with inherent difficulties in increasing recycling at the kerbside, secondary sorting, although less cost effective, still offers scope to reduce ETS costs.

As final details of the UK ETS scheme are being worked up, the report also sounded several notes of caution for policy makers, including a call to recognise the limitations some authorities face in improving recycling rates and in doing so, ensuring the costs of ETS do not fall hardest on those least able to mitigate them. The report also proposed a zero rate for waste that must be treated via energy recovery to protect the environment, for example, soft furnishings that contain persistent organic pollutants, and for EPR funding to lead to real term increases in local authority waste management budgets to support investment in recycling.

John Scanlon, Chief Executive Officer of SUEZ recycling and recovery UK, said: “The expansion of the Emissions Trading Scheme to include energy-from-waste represents a generational policy shift - together with reforms to recycling policy it will transform how we manage our waste here in the UK. I am grateful to Ceres for their work on this report, which is a valuable resource to both local authorities and businesses navigating the impact of policy reform on their services, and looking to reduce the carbon impact of managing their waste.

“It shows there is cause for optimism, for many it’s not a case of radical service change. Instead, it’s an opportunity to extend and improve existing services that are well-liked by their residents.

“At the same time, policy makers have more work to do to ensure bringing energy-from-waste into the Emissions Trading Scheme achieves the overall goal of reducing the carbon impact of managing waste. Protections must be put in place before the scheme is implemented in 2028 to prevent waste being diverted to potentially cheaper but equally carbon intensive disposal routes that fall outside of the scheme, such as landfill or waste tourism to European energy recovery facilities.”

Simone Aplin, Director of Ceres Waste, Renewables & Environment and report author said: “Just as the sector is getting to grips with the impact of the reforms to recycling policy, the expansion of the Emissions Trading Scheme to energy-from-waste represents the next significant challenge and is high on the agenda for many of our customers.

“Collaborating with SUEZ on this report allowed Ceres to combine our considerable expertise with SUEZ’s unique data on waste arisings to generate meaningful insights into the potential impacts for waste producers across the public and private sectors. In modelling the opportunities for mitigating ETS costs, we were pleased to be able to show that these costs can be significantly reduced with early investment in service improvements. This is good news for councils looking to balance their budgets.”

The report “Strategic approaches to minimising emissions trading scheme costs for waste producers” and its associated executive summary are available to download here.