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New Energy World™
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Trading down: Is the UK’s energy-from-waste sector ready to trade carbon emissions?
16/10/2024
8 min read
Feature
What are the implications of including energy-from-waste plants in the UK Emissions Trading Scheme (UK ETS)? Energy journalist Janet Wood examines how the UK emissions reduction scheme compares to that of the European Union (EU ETS).
A new UK ETS replaced the UK’s participation in the EU ETS on 1 January 2021 – the same year the Climate Change Committee’s (CCC) 2021 progress report stressed that government needed to ‘address with urgency the rising emissions from, and use of, energy from waste (EfW).’
Three years on, the CCC’s list of priority actions for the government this year include strengthening the UK ETS, which has seen the average auction price fall from £53.38/t in 2023 to £35.08/t in 1Q2024 (compared with the government’s central carbon value of £268.97/t). Its 2024 report said the waste sector continues to show ‘very little progress’. The waste sector’s ‘good initial progress, with emissions falling from 41.9mn tCO2e in 2008 to 25.9mn tCO2e in 2013’ had come ‘almost exclusively via a reduction in methane emissions from landfill, caused by the 1996 Landfill Tax’. Crucially, ‘energy from waste emissions have substantially increased, meaning progress in reducing waste emissions has stalled’, the CCC notes.
When the UK ETS started, it carried over exclusions that had applied under the EU ETS, which included incineration of hazardous or municipal waste. The net zero imperative and a wish to move towards a ‘circular economy’ (ie, one where resource recovery replaces waste management) have changed that.