Councils warn of billion-pound costs from waste incineration emissions scheme
Local authority associations call for 'polluter pays principle' to avoid cost of including incineration in Emission Trading Scheme falling on councils.
New research from the Local Government Association (LGA), County Council Network (CCN), and District Council Network (DCN) has found that the proposed carbon emissions tax for burning waste could hit councils rather than manufacturers.
The Emissions Trading Scheme (ETS), which is currently applied to the aviation industry, was proposed by the previous Government to extend to the incineration of waste from 2028.
However, in response to a consultation on the scheme, councils are alerting the Government that they could be left with billions of pounds in unavoidable costs unless the industries responsible for creating fossil-based materials are held accountable for these expenses.
Cllr Richard Clewer, Infrastructure and Planning Spokesperson for the CCN, commented: “Councils support the principle of reducing fossil-based materials, but this proposed carbon tax is in the wrong place: we should employ the polluter pays principle instead. It must be down to the producers of fossil-based materials to pay these costs to incentivise them to use greener methods, rather than local authorities who have no choice but to incinerate this waste long after it is produced and purchased.”
Potential financial impact
The research indicates that the cost to councils could reach as much as £747 million in 2028, and could rise to £1.1 billion by 2036, with a cumulative total over this period as high as £6.5 billion.
| Description | 2028 (Low) | 2028 (Medium) | 2028 (High) | 2036 (Low) | 2036 (Medium) | 2036 (High) |
|---|---|---|---|---|---|---|
| Gross annual cost | £376m | £563m | £747m | £618m | £931m | £1,134m |
| Potential mitigation - passthrough of costs via energy suppliers | £59m | £91m | £121m | £100m | £151m | £184m |
| Potential mitigation - passthrough of costs to tenants | £37m | £56m | £62m | £62m | £93m | £113m |
| Estimated annual net cost | £271m | £416m | £551m | £456m | £687m | £837m |
Table 1: The gross and net estimated ETS cost ranges for all English local authorities
Potential mitigations, such as the passthrough of costs via packaging Extended Producer Responsibility (pERP) and trade waste customers, could reduce these figures by small margins. However, the research suggests that packaging only makes up 19 per cent of the residual waste stream, and that there are no broader plans for the rest of the waste that is sent for incineration.
Cllr Adam Hug, environment spokesperson for the LGA, said: “Current proposals risk councils and local taxpayers facing enormous costs, which simultaneously risks the scheme failing to meet its objectives while exposing councils to significant additional financial risk.”
Limited options for councils
Councils warn that they have limited power to reduce the amount of fossil-based material put on the market, and no meaningful tools to reduce waste sent for incineration. The research suggests that packaging only makes up 19 per cent of the residual waste stream, and there are no broader plans for the rest of the waste that is sent for incineration.
Cllr Andy Graham, DCN environment spokesperson, added: “District councils spend over 40 per cent more on waste collection than we did four years ago as we battle to retain staff and implement stringent national guidance on how we collect waste. We cannot afford to be hit by an incineration tax.”
Local authorities argue that placing the cost on the industries producing these materials would incentivise manufacturers to lower their use of fossil-based components. This shift could also raise funding to support initiatives like carbon capture and storage (CCS) technologies to aid in reducing emissions.
