A clear plastic bottle being deposited into a reverse vending machine

Impact of the extension of the UK Emissions Trading Scheme to Energy from Waste on Scottish local authorities

15 May 26 4 minutes

Scottish local authorities are expected to face new costs when Energy from Waste is brought into the UK Emissions Trading Scheme (ETS). This research assesses the scale of the impact, as well as evaluating options for local authorities to reduce cost and carbon impacts through different decarbonisation measures.

Overview

This study examines the impact of including Energy from Waste (EfW) within the UK Emissions Trading Scheme (ETS) on Scottish local authorities. It estimates the fossil carbon emissions arising from residual waste sent for incineration and models the associated ETS costs over time.

The research explores how local authorities could mitigate these impacts through changes to waste collection systems and improved capture of fossil carbon materials. The modelling builds on the Kerbside Impact Assessment (KIA) framework and considers the effects of existing and upcoming policies, including the Deposit Return Scheme (DRS) and Extended Producer Responsibility for packaging (pEPR).

Due to the complexity of the modelling and the absence of an agreed cost-pass through methodology at the time of the study, an exploratory approach was taken to link waste composition with real world fossil carbon emissions from EfW facilities. A non technical summary accompanies the full technical report to support accessibility and understanding.

Key findings

The ETS cost of incinerating local authority residual waste is estimated at £28.7 million in 2028, based on current waste arisings, recycling efforts and carbon cost projections. This cost is currently expected to double in less than 10 years.

In practice, the final bill to local authorities may vary significantly due to the market-based nature of ETS costs, but schemes such as DRS and the collection of plastic film and flexible under pEPR will likely reduce costs, with additional interventions lessening it further.

Key findings include:

Fossil carbon emissions account for just under half of the total carbon emissions from the incineration of local authority collected residual waste in Scotland.
Fossil carbon emissions from local authority residual waste in Scotland were estimated at around 718,000 tonnes CO2e per annum.
Over 60% of the fossil carbon emissions are from kerbside collected residual waste, around a quarter from residual waste collected at Household Waste Recycling Centres (HWRCs) and the rest from residual waste from businesses.
Deposit Return Scheme (DRS) and the collection of plastic film and flexibles under Extended Producer Responsibility for
packaging (pEPR) are likely to reduce fossil carbon emissions by 6% to around 676,000 tonnes CO2e.
Further interventions modelled at the kerbside and at HWRCs, such as collection of non-packaging dense plastics, clothes and textiles, and carpets and underlay, could reduce fossil carbon emissions by a further 7% to around 624,000 tonnes CO2e.
The estimated ETS costs for local authority residual waste in Scotland were estimated at £28.7 million in 2028, reducing to £27.02 million as result of DRS and collection of plastic film and flexibles under pEPR, and further to £24.94 million as result of the modelled interventions. These costs are not distributed evenly across all 32 LAs.
• It was estimated that local authority payments through pEPR could offset around 40% of the ETS costs for materials in scope of pEPR.
The market-based nature of ETS can significantly vary the cost of the scheme, making it difficult for local authorities to budget for the costs.
However, there remains significant scope for local authorities to further reduce their fossil carbon emissions through improved performance of collection services, specifically for household plastic packaging