Consultation on UK Emissions Trading Scheme Scope Expansion: Waste

If you are responding on behalf of an organisation, what is its name? 

North London Waste Authority 

Questions: 

(Y/N) Please give further details to support your answer.  

No. 

NLWA supports processes to mitigate climate change and achieve net zero and whilst the purpose of the ETS is to drive behaviour towards decarbonisation, we feel the proposal in its current format does not achieve this. Therefore we do not agree with the inclusion of Energy from Waste (EfW) within the Emissions Trading Scheme (ETS).  We do not believe this is the correct mechanism to encourage sector decarbonisation.  

The purpose of the UK ETS is to drive behaviour and investment in decarbonisation. For local authorities who have statutory duties to dispose of residents' waste and have little influence over the composition and volume of this waste, there are few routes that they can take to decarbonise so we believe the proposals are unlikely to achieve their intended outcomes. The biggest driver of behaviour for waste disposal authorities is the amount and type of waste that is presented to them. The options available to waste disposal authorities to decarbonise residual waste have limited or uncertain impacts so NLWA fails to see how expansion of the UK ETS to EfW would produce any decarbonisation benefits. We cannot view the mechanism as anything other than an increase of waste management costs for local authorities, for little environmental benefit.  

Variation in the impact of ETS will be seen across different local authorities. NLWA is responsible for the waste of north London residents, the majority of whom live in highly urban and densely populated areas. Over 60% of properties in north London are flats and shared properties, nearly 40% higher than the England average. There are also areas of high deprivation across north London. These factors make increasing recycling significantly more difficult in these localities than in more suburban areas. This means that the ETS proposals in their current form will hit the poorest areas hardest, when local authorities are already under extreme pressure to ensure they can meet the needs of their residents. 

The proposal to include EfW and incinerators in the UK ETS focuses decarbonisation interventions at the 'wrong end' of the sector and Government should instead prioritise incentivisation to decarbonise at producers in line with the ‘polluter pays’ principle. NLWA have a statutory duty to manage the waste of north London residents, and we must manage this waste regardless of the composition in which it has been presented to us. As long as producers place fossil-based items on the market for residents to consume and subsequently place in their residual waste bin, local authorities will be required to deal with this waste. Impactful decarbonisation activity can only truly take place at the producer-level, so decarbonisation needs to focus on 'products' rather than waste to prevent waste from arising in the first place and improve the recyclability of products that do end up as waste. NLWA is committed to preventing and reducing waste and recycling where this is not possible. Reducing the waste produced in the first place supports the decarbonisation of the sector: the less waste there is, the lower the emissions the sector produces. NLWA aim to be a leader in this space but further Government intervention is needed to support waste reduction.  

The inclusion of EfW in the UK ETS will likely be catastrophic for local authority (LA) finances. In 2022/23, local authorities sent almost 90% of their residual waste and almost 50% of their total waste to EfW facilities for energy recovery. The proportion of residual waste going to energy recovery has increased significantly over the years as more and more local authorities are choosing this method over landfill, as it produces fewer emissions, generates energy (supporting UK energy security and aiding in the transition away from traditional non-renewable energy sources) and moves residual waste further up the waste hierarchy. Should local authorities be exposed to the UK ETS, not only would they face potentially enormous costs, but also huge uncertainties around those costs. We estimate that, depending on the carbon price, NLWA would face costs between £14million and £35million per year, meaning that at a low carbon price of £60/tCO2 would increase waste disposal costs by 82%, and a high carbon price of £150/tCO2 would increase disposal costs by 206%. This is purely the costs incurred by purchasing UKAs, and does not include the additional costs for MRV requirements and further overheads required to ensure compliance with ETS. As NLWA receives its funding through Borough Councils, if local authorities are liable for the costs of ETS, these councils will be required to find the money for these costs in their already incredibly stretched budgets, meaning through cuts to other services. This is likely to include services that drive waste reduction and increase recycling. 

When considering the variables of waste feedstock fossil carbon content, fossil content of stack emissions, carbon prices that vary and variable tonnages that are delivered, the combination of these variables is likely to make forward planning of financial obligations for local authorities in particular very challenging. 

Alternative, more straightforward solutions need to be explored which target producers directly in order to decarbonise waste at the source. For example, as set out in the LGA’s Waste Reforms Briefing, this could be through direct producer payments to the UK ETS Authority based on a national picture, meaning that local authorities would not be exposed to the high costs of the ETS, and the incentives are placed at the level which has the greatest amount of control over decarbonisation. Placing costs directly on producers could incentivise them to favour materials with less fossil carbon content. 

Defra's Collection and Packaging Reforms (CPR), including Packaging Extended Producer Responsibility (pEPR), a Deposit Return Scheme (DRS) for plastic bottles and metal cans, and Simpler Recycling regulations, aim to drive capture of material for recycling and improve the recyclability of packaging. However, NLWA would like to highlight that these reforms have been watered down and delayed numerous times since government committed to their delivery in the 2018 Resources and Waste Strategy for England. As a result, having undertaken modelling, NLWA is not expecting the CPR to have a significant impact on our residual waste stream. For example, the impacts of DRS and pEPR combined are only expected to reduce NLWA's residual waste by 2.45%.  

Further to this point, any benefits from the CPRs are unlikely to be felt by local authorities in advance of proposed date for inclusion of EfW in the UK ETS. The implementation of policies under Simpler Recycling are planned for March 2026, less than two years before the proposed new obligations under the UK ETS, with flexible plastic recycling not being introduced until March 2027. Similarly, DRS is not expected to reach its 90% target capture rate until 2030. Eco-modulation (varying producer fees based on the recyclability of packaging) under pEPR is expected to drive the recyclability of packaging placed on the market, although the extent to which this will occur is not fully understood. However, this mechanism will only apply from the second year of the scheme i.e. 2026/27. The proposal to include EfW in the UK ETS from 2028 does not provide enough time for these policies to take full effect. Additionally, once the reforms are fully implemented, it may be realised that there are unintended adverse outcomes. For example, there are concerns that under pEPR, producers may, despite eco-modulation, be incentivised to use greater amounts of fossil-based packaging, as producer fees will be based on tonnes of packaging, meaning producers may choose to switch from heavier, more recyclable, non-fossil packaging such as glass and metal, to lighter, less recyclable, fossil-based packaging such as flexible plastics. PEPR, as it currently stands, will modulate fees based on recyclability, not the carbon content of packaging and therefore does not align with the intentions of the ETS.  

The Resources & Waste Strategy (RWS), which was published in 2018, is outdated and local authorities were disappointed by the weak precedent set by the Waste Prevention Programme for England and its lack of commitment to tackle the drivers of consumption and therefore waste production; the plan uses weak language such as ‘encourage’ rather than ‘require’. The RWS should be revisited and brought up to speed with the direction of the sector putting more emphasis on waste prevention and measuring the carbon impact of waste, if this is to be the focus of the sector. As such, a joint up approach across Government is required to deliver sector decarbonisation.  

Finally, EfW has an important role to play in diverting waste from landfill, avoiding the emissions and other environmental impacts of landfill disposal. The emissions impact of the EfW sector should be viewed with this in mind and any assessments of the contribution of the EfW to the sectors' emissions should take a full life cycle approach compared to landfill. 

(Y/N) Please give further details to support your answer.  

No 

NLWA is unaware of any further technologies that should be covered by the proposals. 

NLWA believes that waste should not be included within the ETS. Our position on chemical recycling is unsure, as these technologies, including purification, depolymerization, and conversion, are still in early developmental stages and face significant challenges in performance, scalability, and economic feasibility. Currently, the number of facilities developing this industry is small, and they are not significant polluters given their limited capacity. A holistic approach is needed to assess these technologies as part of their role in enabling the circularity of plastic waste. NLWA understand that chemical recycling is an energy-intensive process, have a number of residues that need further treatment, and make products that may release further carbon.  

As a result of this limited knowledge of chemical recycling, it would not be rational to implement the proposals until the consequences and alternative impacts can be assessed. 

(Y/N) Please give further details to support your answer.  

NLWA cannot comment on this. 

(Y/N) Please give further details to support your answer.  

Yes 

NLWA believes that all EfW facilities should be excluded from the UK ETS. However, the input threshold would not affect us as both our current facility and new under-construction facility both exceed this threshold. Ultimately, NLWA believes that no EfW facility should be in scope of the UK ETS. 

NLWA believes that all waste-to-energy facilities should be excluded from the ETS as they are first and foremost facilities to protect public health, with local authorities using them to fulfil their statutory duty to dispose of residents' waste whilst avoiding landfill which is a more environmentally damaging method of disposal.  Local authorities have limited control over the fossil-fuel content of what producers sell to residents and local businesses, and what therefore arises in our waste streams (recycling and residual).  

(Y/N) Please give further details to support your answer.  

No 

NLWA believes that all EfW facilities should be excluded from the UK ETS. 

(Y/N) Please give further details to support your answer.  

NLWA does not have a view on this.

NLWA believes that all EfW facilities should be excluded from the UK ETS. 

(Y/N) Please give further details to support your answer and set out any concerns that you may have.  

No 

NLWA does not agree with the inclusion of hazardous and clinical waste in the ETS. We are required, by law, to incinerate these wastes because of the threat they pose to public health (for example, the increasing list of materials that are classified as POPs). This means that we have no choice to use any alternative methods of disposal. As a result, it would be unfair to penalise local authorities for carrying out an activity that is legally required of them and NLWA would assume this would need to be fully funded by Government.  

The cost of managing clinical waste is already significantly higher than general waste. If the cost of this becomes even greater due to ETS, it could possibly increase the risk of driving the wrong behaviour from businesses who wish to deal with this waste in the most cost-effective way.  

Additionally, much clinical waste consists of specific materials that are necessary for medical purposes. These materials are often fossil-based, meaning that it would be difficult for users of these products to decarbonise their waste by moving to non-fossil based alternatives.  

NLWA notes that questions 10 to 15 refer to specialist facilities that incinerate hazardous and clinical waste. NLWA would like to highlight that hazardous and clinical waste are also managed in non-specialist EfW facilities, including the EfW at the Edmonton EcoPark which incinerates hazardous and clinical waste alongside general residual waste. Therefore, the challenges that apply specifically to these waste types apply to standard EfWs as well as specialist incinerators. The ETS Authority must be clear on the definitions of hazardous and clinical waste incinerators.  

NLWA believes that attempting to drive decarbonisation by targeting EfW facilities is an ineffective approach that focuses on the wrong end of the waste production chain. This is true for all materials, not just hazardous and clinical waste. As set out in our response to Q10, we believe that there currently are minimal options to decarbonise hazardous and clinical waste. Working with producers and manufacturers to reduce products containing hazardous materials is the only viable method to decarbonise the waste stream, because as long as producers place items on the market for consumers to purchase, these items will end up in the waste stream. However, ultimately, incineration will always be required for the disposal of hazardous and clinical wastes.  

As noted in our response to question 10, hazardous and clinical waste are not always solely managed in specialist facilities. Therefore, the overarching challenges of decarbonising residual waste also apply to hazardous and clinical waste.

(Y/N) Please give further details to support your answer.  

NLWA cannot comment on the ability of specialist hazardous and clinical incineration facilities to use certain emissions monitoring methods. However, as mentioned in our response to Q11, our EfW facility incinerates hazardous and clinical waste alongside general residual waste. Because of this, it would not be possible to use flue gas monitoring to monitor the emitted carbon resulting specifically from hazardous and clinical waste.  

Sampling is also not a viable option for these types of waste as it would expose operatives to health risks because they would need to manually handle this potentially harmful material.  

Further detail on the complications with monitoring is outlined further in our answers to the relevant questions in the monitoring section. 

(Y/N) Please give further details to support your answer. 

No 

NLWA does not expect there to be a significant risk of waste being mislabelled as hazardous or clinical waste as the cost of managing hazardous and clinical waste is already particularly high. 

However, explicit guidance on categorisation would need to be made available to ensure that it is clear which types of waste would fall under this category. 

(Y/N) Please give further details to support your answer.  

No 

NLWA disagrees that HSE emission targets would incentivise the decarbonisation of incinerators. This is for the reasons set out on the challenges involved in decarbonising energy from waste facilities.  

Carbon Capture and Storage (CCS) technology is still in early stages of its development, and is expected to be an incredibly costly investment once the technology is available and proven in this capacity. Nevertheless, even when CCS technology is readily available, HSE facilities are likely to be too small for CCS to be a viable option given the high costs involved. 

Additionally, placing emissions targets on facilities is an attempt at incentivising the wrong end of the chain. Incentives must be placed on the producers of fossil-based materials, as they are the ultimate drivers of what is received at incineration facilities. 

(Y/N) Please give further details to support your answer.  

No  

There are difficulties with decarbonising clinical waste as set out in our response to questions 10 and 11. Producer responsibility schemes which incentivise non-fossil-based products, bans or levies that target producers of materials would be more effective in decarbonising the fossil content of the waste that is generated. 

(Y/N). Please explain your reasoning, including by proposing an alternative approach if appropriate.  

No 

See explanation below. 

(Y/N). Please explain your reasoning, with reference to any alternative approaches or sources of evidence, such as on the impact of policies on the fossil proportion of emissions.  

No  

The proposed cap adjustment of 7.9Mt UKAs declining to 6.8Mt by 2030 assumes a rate of decarbonisation that is unrealistic for the waste sector. It assumes the waste sector, particularly local authorities, are able to decarbonise to an unrealistic extent. EfW facilities are not able to easily switch fuel type unlike other operators in the power sector and the primary purpose of EfW is to provide an essential waste treatment service where the alternatives have poorer environmental outcomes (i.e. landfill). Industry is not prepared for a sudden cap on emissions and CCS infrastructure is yet to demonstrate full financial viability in the UK. Currently, development of this technology largely exists in ‘clusters’ in the UK. Many EfW facilities are not close to such clusters and are often in dispersed sites. The cap adjustment does not account for the timeline for CCS, adopting an unrealistic trajectory for the sector's emissions. It does not make sense to reduce allowances under the adjusted cap before projects under the Industrial Carbon Capture Business Model (ICC BM) are operational and commence abatement.  

Furthermore, the trajectory does not allow for Defra's Collection and Packaging Reforms (CPR) to take effect. EPR, DRS and Simpler Recycling reforms have been delayed and watered down meaning we are unlikely to see their full effect before the proposed inclusion of EfW in the UK ETS, and they are unlikely to have a significant impact on the sector's emissions. Allowances cannot be reduced before the CPR have demonstrated a reduction in residual waste and abate carbon emissions.  

It should be considered by DESNZ that disposing of residual waste through energy recovery provides an alternative to landfill in the UK, avoiding worse environmental and emission impacts. Therefore, the net emissions benefit that energy recovery provides for the disposal of non-recyclable waste over landfill should be accounted for in the adjusted cap. 

The proposed cap adjustment looks at emissions from the sector in 2024 and fails to consider planned EfW capacity and facilities that are currently under construction. Between 2021 and 2036, the UK population is projected to grow by 6.6 million people, and the new Government is committed to ambitious housebuilding targets. More people and more households mean greater generation of waste and as a result a greater demand on waste management infrastructure. To manage this increasing demand on capacity, more EfW facilities will be in operation between 2028 and 2030 and so NLWA is concerned that the proposed cap of 6.9Mt is insufficient and would lead to a shortfall in UKAs across the market, driving up costs for all participants.

As explained in our response to question 17, NLWA are concerned that the cap adjustment does not fully reflect the emissions of the sector with planned EfW capacity increasing before 2030. This shortfall would likely have an upward impact on market prices for all participants and additional abatement will be required of other parts of the traded sector. 

NLWA is concerned that additional allowances under the new cap would not be ringfenced for the waste sector and allow existing operators to purchase reserve / banked allowances for future years at a lower cost (because the market is inflated) or to sell on secondary markets to those who were unable to secure allowances, essentially putting local authorities in competition with sectors such as manufacturing and energy generation that have more power and greater influence over their feedstock. As the cap is not sufficient for the waste sector’s emissions and does not account for new facilities and operators coming online in the future, there is concern that EfWs would be subject to traded allowances bought from the private or existing sectors who have surplus and the potential impact this could have on costs. 

Additionally, local authorities have statutory requirements and democratic responsibilities in regard to budget setting and finances, and as a result do not have the same flexibility or financial ability to compete with other sectors. Furthermore, local authorities attempting to "play" the market is unlikely to be a good or appropriate use of public money. 

(Y/N) Please give further details to support your answer.  

No  

NLWA does not agree that it is practicable for existing ETS regulatory requirements to be applied to the waste sector. This is for the following reasons: 

(Y/N). Please give further details to support your answer.  

Yes 

While NLWA does not believe EfW facilities should be included in the ETS, if these facilities were to be included, then an MRV-only period would be essential to ensure that stakeholders are adequately informed ahead of ETS coming into full effect. It would allow time to gain a detailed understanding of cost pass through to local authorities and align this to accurate EfW facility emissions reporting.  

However, the current proposed two-year MRV-only period is not enough time for local authorities and EfW operators to ensure that they are ready, including to ensure all required permits, monitoring methods, and reporting processes are verified and in place. The MRV-only period as currently proposed does not allow for collection and packaging reforms to take effect and demonstrate any reductions in residual waste. A longer period of time is needed, with a final decision on the inclusion of EfW facilities into the ETS to be made following any MRV-only period. This would ensure that any decision made is formed through high-quality data and analysis, so it is certain that the inclusion of EfW into ETS is a practicable and sensible decision. 

NLWA is concerned that commencement of an MRV period from 2026 would not allow enough time for all EfW operators to apply for and obtain the relevant GHG permit. NLWA understands that there is already significant pressure on the Environment Agency and timelines on obtaining permits is around 12-18 months. Given this, and that any guidance specific to MRV for EfW operators is yet to be developed, NLWA believe the assumption that the sector would be prepared for MRV commencement in January 2026 is unrealistic.  

Additionally, if an MRV-only period is mandatory, this will incur further costs to local authorities. Considering that local authority budgets are already stretched, it is essential that any new cost or resource incurring activity is fully funded. NLWA does not believe financial penalties should apply to EfW in an MRV period.  

NLWA, as a customer of an EfW, would likely use any data from the MRV-only period to forecast the extent of the financial impact of ETS, so that our Borough councils are able to attempt to find money in their budgets to fund the additional cost burden. NLWA would scrutinise the relationship between emissions monitoring for MRV and the accuracy of ETS cost pass through.  

NLWA would expect Government to oversee, standardise, and verify the output data across the waste sector during an MRV-only period. Currently, the sector has low confidence in the data resulting from the different monitoring and sampling methods outlined, so this support would be needed to reassure stakeholders across the sector.  

Please see LondonEnergy Ltd (LEL) response to this question for further information on how operators would use data from the MRV period.  

(Y/N). Please give further details to support your answer.  

No 

NLWA does not agree that this would provide an incentive to reduce our exposure to the carbon price. Whilst knowing our expected costs earlier than full implementation is essential to provide clarity for financial planning purposes, we ultimately have limited options available to us to reduce our exposure. The main way of reducing exposure is through decarbonisation, and as an end recipient of waste, there are no guaranteed ways that we can decarbonise our activity.  

Actions such as pre-sorting of waste currently have limited impact, and any new infrastructure can take several years to implement with high costs. A report commissioned in 2022 by NLWA concluded that it would cost approximately £25m per year for the mechanical pre-treatment of north London's 560,000 tonnes annual residual waste total. The report estimates that this would recycle 38,600 tonnes, leaving 521,400 tonnes in the residual waste stream. This amounts to approximately 7.4% of our residual waste being extracted for recycling. However, this amount being recycled is dependent on the available markets, which can often not be guaranteed due to the low quality of the extracted material. This means that the actual amount of material that gets recycled could potentially be significantly less than what has been extracted.  By choosing this route in an attempt to reduce our exposure to carbon prices, we risk investing a significant amount of money on new infrastructure whilst still bearing the burden of high ETS costs due to the limited impact on our waste stream. NLWA would be relying on data from 2026 to make assumptions about carbon values and waste composition in 10+ years' time which, given the inherently turbulent nature of carbon markets, would unlikely provide confidence for decision makers. Even if pre-sort was a viable option, knowing ETS costs two years before full cost exposure does not align with the number of years often required to design, procure, and construct infrastructure at this scale.  

Yes 

NLWA agrees that the same MRV requirements should apply to both the MRV-only period and the full implementation. However, from an operator view it is impracticable for implementation from 2026 with the limited guidance and no granted GHG permits given to operators. The implementation period will likely include further development on monitoring methods and granting of GHG permits with the current restraints on the EA.  

NLWA agree a phasing period is required, but the phasing period should not be used as a means of catching up with regulatory requirements ahead of an implementation date, the phasing period must start once permits have been granted and clear monitoring plans have been agreed. Penalties should not apply to operators during an MRV phasing period because, as set out in our response to question 20, we do not believe it is realistic for the sector to be prepared and operators compliant (i.e. permitting, monitoring plans verified and in place) before January 2026.

Yes 

Please see our answer to question 23. 

Whilst we are unable to provide an answer on the likelihood of operator compliance, NLWA believes that a voluntary MRV-only period would result in monitoring data that is not standardised. If the MRV-only period produces data and information in this way, it would make preparation for the full implementation of ETS significantly more difficult and uncertain. 

Please see LondonEnergy Ltd (LEL) response to this question for further detail. 

Please see our answer to question 25 and LEL’s response for further detail.  

As with our answer to question 20, the current proposed two-year MRV-only period is not enough time for local authorities and EfW operators to ensure that they are ready for full ETS exposure, nor does it align with the timelines of other reforms affecting the waste sector. A longer period is needed, with a final decision on the inclusion of EfW facilities into the ETS to be made following any MRV-only period. This would ensure that any decision made is formed through high-quality data and analysis, so it is certain that the inclusion of EfW into ETS is a practicable and sensible decision based on sound evidence.  

Additionally, if an MRV-only period is mandatory, this will incur further costs to local authorities. Considering that local authority budgets are already stretched, it is essential that any new cost or resource incurring activity is fully funded. 

(Y/N). Please give further details to support your answer.  

Yes 

NLWA does not believe that UK ETS should be applied to the waste sector. However, using a tiered approach appears to be a sensible solution providing it ensures high standards across the industry. 

(Y/N). Please give further details to support your answer. 

No 

The supporting report conducted by Ricardo suggests that a tiered uncertainty approach to MRV is not suitable for the energy from waste sector. The report states that existing uncertainty levels are ‘potentially impossible’ for operators to achieve. As a result of this, NLWA does not believe that a tiered uncertainty approach is a suitable solution. It might be more appropriate to develop one tier of uncertainty applicable to all operators to ensure a level playing field based on what the technology can reasonably achieve.  

NLWA understands that results of emissions testing can vary depending on the lab used to verify findings. This has particularly concerning implications for cost pass through. Any method for MRV must be aligned to accurate cost pass through methods to allow transparency between operators and customers.  

(Y/N). Please give further details to support your answer.  

No 

See response to question 29.  

(Y/N). Please give further details to support your answer.  

No 

Whilst NLWA does not agree with the inclusion of waste in the ETS, Option 2 would be preferred over Option 1. However, the implications of the methods used in each of the tiers suggested must be assessed for their suitability.

NLWA is unable to comment on appropriate measures for small installations. 

NLWA believes the following guidance should be issued by the UK ETS Authority as a priority: 

NLWA expects that draft guidance is shared with stakeholders and tested through engagement opportunities for the relevant stakeholders with the teams responsible for the guidance, providing the draft guidance in a digestible format for the stakeholders. It is also essential that local authorities are included within this engagement due to the high impact that it will have on their finances and operations. 

NLWA expects that guidance is produced as soon as feasibly possible. We anticipate that some guidance cannot be produced until after the MRV-only period. This means that there will not likely be enough time to analyse the MRV data, publish the guidance, and for EfW operators and customers to comply. As suggested in our response to question 33, NLWA believes that MRV operator requirements, cost pass through, and guidance on how the ETS interacts with existing waste policy and regulation should be priority topics for guidance produced.  

A longer period of time is needed, with a final decision on the inclusion of EfW facilities into the ETS to be made following any MRV-only period. This would ensure that any decision made is formed through high-quality data and analysis, so it is certain that the inclusion of EfW into ETS is a practicable and sensible decision based on sound evidence.  

Yes 

Inclusion of EfW in the UK ETS will close the gap between EfW and landfill gate fees, which could unintentionally encourage disposal of waste lower down the waste hierarchy.  

Using Let's Recycle mid-point prices and the May 2024 ETS carbon price, landfill disposal would currently cost £128.70 per tonne including the current Landfill Tax rate, and EfW would cost £145.05 per tonne. This indicates that without an appropriate price escalator or alternative measure for increasing Landfill Tax, there is risk of landfill becoming a more financially viable option for disposal.  

The above is an arbitrary calculation that does not account for the variation in gate fees paid across UK local authorities or that the ETS price is variable. The 2022-23 WRAP gate fee survey indicates EfW gate fees ranged between £45-£175 per tonne and landfill gate fees (excluding Landfill Tax) ranged £11-£87 per tonne in the same year. Given the range of gate fees in different regions, some areas might see the gap between EfW and landfill gate fees 'close' sooner than others. 

Gate fees for other waste streams might also become more expensive as incineration and energy recovery are often used to dispose of contamination from Material Recovery Facilities (MRFs) and front-end rejects at Anaerobic Digestion (AD) facilities. Currently, NLWA's MRF process rejects (i.e. contaminated recyclables or non-recyclable material in the dry mixed recycling waste stream) are sent to energy recovery in the form of RDF at a fixed price set under a contract with our MRF operator. Similarly, many AD facilities remove bags and caddy liners at the front end of the process and send these for disposal via energy recovery. An ETS carbon cost will likely increase the cost paid by NLWA and its constituent boroughs for rejects disposal. This material could be at risk of being disposed of via landfill if EfW becomes relatively more expensive.  

Commercial waste suppliers will manage their waste in line with the most cost-effective option so there is greater risk of commercial waste suppliers switching to (or continuing to) landfill as a more favourable method of disposal.  

Waste crime might increase among commercial suppliers with the overall costs of waste disposal (both landfill and EfW) increasing. This could mean local authorities are forced to spend more on the clearance and disposal of fly-tip material which is often too poor quality or complicated to recycle.  

There remains a risk that landfill becomes a more financially attractive method of disposal for local authorities, especially where many authorities are already struggling with increasing financial pressures. However, managing waste lower down the waste hierarchy would not be preferable for local authorities who could suffer reputational damage against a backdrop of commitments to reduce waste and increase recycling.  

NLWA notes that this question suggests export of RDF/SRF is lower down the waste hierarchy than EfW and disagrees with this position. RDF/SRF export plays a role in diverting residual waste from landfill, avoiding emissions associated with landfill disposal, and support the generation of energy, albeit in a different country. 

(Y/N) Please give further details to support your answer.  

No 

NLWA do not agree that the waste sector should be subject to the UK ETS, including landfill, as the sector is limited in its ability to decarbonise waste. NLWA believe the focus should be on producers, manufacturers and retailers to decarbonise through driving down waste and eliminating the production and use of high fossil carbon materials.  

Including landfill in the UK ETS further adds to the complexity of expanding the scheme to the waste sector and would subject local authorities to even more uncertainty in financial planning. It could place additional burden on waste disposal authorities who manage existing and closed landfill sites. NLWA suggests that including landfill in the UK ETS would be impractical owing to the complexity of measuring landfill emissions and accounting for legacy emissions from historic waste.  

Existing regulatory, financial and policy mechanisms should be leveraged before introducing new legislation, including reviewing the landfill tax escalator and possible bans on certain types of residual waste (both LACW and C&I waste) to landfill. However, NLWA believes any proposals for mitigating diversion to landfill should be subject to an impact assessment to understand any benefits of certain mechanisms over others. 

Yes 

NLWA would like to see greater focus on waste reduction and prevention targeting producers of waste. Landfill taxes, bans and inclusion in the ETS are all end-of-pipe solutions that do not support true decarbonisation of the sector or a move to a circular economy. NLWA believes more attention should be on producers and manufacturers to prevent valuable resources from entering the waste stream in the first instance and reduce the fossil carbon content of products.  

NLWA would like to see the Government's plans for the commitment to the near elimination of biodegradable waste to landfill by 2028 and any planned policies under this initiative with a review of their proposed impact on landfill emissions.

(Y/N) Please give further details to support your answer.  

Yes 

Consideration should be given to the capacity and availability of existing and planned disposal infrastructure in the UK to manage the country's waste. Landfill may still have a role to play for some authorities during planned and unplanned EfW outages if transporting residual waste to another EfW facility is not feasible. It is unknown whether expanding the UK ETS to include EfW might inhibit further development of EfW infrastructure.  

NLWA would like to see the report due to be published by Defra on UK EfW capacity and for further work to be done to understand the capacity of UK waste disposal and treatment infrastructure to manage the country's waste in light of changing legislative requirements.

RDF/SRF export should remain a viable option for residual waste disposal where UK EfW capacity is not available i.e. during planned and unplanned outages and should not be thought to be equal to landfill in the waste hierarchy. Research by the RDF Industry Group suggests even if the UK were to export RDF to the continent for energy from waste, the emissions would be lower than if the same material were to be landfilled in the UK. As such, RDF/SRF export could provide an alternative disposal route for residual waste should domestic EfW capacity be unavailable. Reiterating the point made in our response to question 40, any disincentive for RDF/SRF export to maintain the competitiveness of domestic energy recovery would need to be considered within the wider context of domestic EfW capacity and alternative disposal availability to prevent any bottlenecks and allow local authorities to comply with their statutory duties to dispose of waste whilst minimising the environmental impacts of this.  

(Y/N) Please give further details to support your answer.  

No 

As in our response to questions 28 and 29, NLWA believes focus should be on producers to prevent and reduce waste, in line with the waste hierarchy, as any disincentive on RDF/SRF export is an end-of-pipe solution which will have limited impact on sector decarbonisation.  

Local authorities and operators should retain the flexibility to send residual waste for RDF export during times of planned and unplanned outages at EfW facilities as this option would still be preferable to landfill. Limiting the number of permits/licenses issues could remove this option for local authorities and result in waste being managed lower down the waste hierarchy or pose a risk to public health.  

NLWA understands that there is already significant pressure on the Environment Agency and timelines on obtaining / varying permits is 12-18 months. NLWA is concerned this additional complexity would put further pressure on the EA and create bottlenecks for obtaining permits. 

(Y/N) Please give further details to support your answer.  

No 

As stated in previous responses, NLWA believes exports of RDF/SRF should not be viewed as equivalent to landfill in terms of their impact on the environment. NLWA would like to see export of RDF remain a viable option for residual waste disposal and provide flexibility.  

Many EU Member States impose carbon or incineration taxes on EfW facilities, including for the import of RDF, and the EU ETS is due to include EfW from 2028. The latter is likely to increase EfW gate fees in EU Member States and RDF/SRF would be covered by this charge. Charging RDF/SRF exports risks applying a double-taxation to waste where existing financial mechanisms in EU countries may already disincentivise export. For example, the Netherlands introduced a disposal tax on imported waste destined for EfW in 2020 which drove down the UK's share of imported RDF/SRF (from 91% in 2016 to 44% in 2021).

In line with our response to question 43, NLWA are unsure if a charge on the permitting / licensing of RDF/SRF exports is necessary and believe this should be explored in the context of carbon policy mechanisms in the EU. However, NLWA understands the UK EfW market must remain competitive against exports.  

The variability of the ETS carbon price is in conflict with the nature of local authority budgeting. In the same vein, a variable charge for RDF/SRF permits would create challenges for local authority budgets, particularly when RDF/SRF exports are used to plug a gap in unplanned reduced domestic EfW capacity. 

A) NLWA do not believe EfW, RDF/SRF or landfill should be subject to the UK ETS or a carbon price for the reasons set out in this consultation response. 

B) Yes - consideration should be given to any existing carbon or incineration taxes in the destination country to avoid double or even triple-taxation. It is unclear whether such taxes will be removed following the expansion of the EU ETS to EfW. Carbon and incineration taxes vary widely across EU Member States.  

C) NLWA are unsure if a charge on RDF/SRF is appropriate. See our responses to questions 43 and 44. 

(Y/N) If so, please give further details on which options and why.  

Yes 

NLWA would like to see greater focus on waste reduction and prevention targeting producers of waste. An RDF/SRF permit charge or a limitation on permits are both end-of-pipe solutions that do not support true decarbonisation of the sector or a move to a circular economy. NLWA believes more attention should be on producers and manufacturers to prevent valuable resources from entering the waste stream in the first instance and reduce the fossil carbon content of products. 

(Y/N) Please give further details to support your answer. 

Yes 

RDF/SRF permit charges could subject exports to double- or even triple-taxation where carbon or incineration taxes exist in destination countries. This includes the possible expansion of the EU ETS to EfW in 2028. Excluding EfW from the UK ETS would likely mean domestic markets remain competitive over exports as these become subject to the EU ETS and evolving carbon / incineration taxes in individual EU Member States.  

Government must conduct analysis to understand the value RDF/SRF exports provide the UK waste sector and why this method of disposal is used to avoid any unintended consequences. Because of the flexibility this option provides local authorities, NLWA would be against any measures that limit a disposal authority's ability to export RDF/SRF. RDF/SRF export could be more environmentally favourable than landfill and government should give consideration to this and the role RDF plays in diverting waste from landfill (and managing waste lower down the waste hierarchy).  

(Y/N) Please give further details to support your answer, including information on the ability of local authorities and/or waste incineration operators to undertake the decarbonisation pathways detailed. Please also provide any information on additional decarbonisation activities or pathways that are available to local authorities and/or waste incineration operators.  

No 

NLWA does not agree with the decarbonisation pathways that have been outlined. Local authorities are at the end of the chain when it comes to influencing the amount of fossil-based materials in the residual waste stream. NLWA has a statutory duty to manage the waste of north London residents, and we must manage this waste regardless of the composition in which it has been presented to us. As long as producers place fossil-based items on the market for residents to consume and subsequently place in their residual waste bin, local authorities will be required to deal with this waste. Impactful decarbonisation of the waste stream can only truly take place at the producer-level, and as a result Government intervention and incentivisation to decarbonise must be targeted in respect of this as a priority. Defra have previously committed to publishing a Waste Sector Decarbonisation Plan. This needs to be published, and assess genuinely viable decarbonisation pathways for facilities, before any decision on including EfW into ETS is made. 

The proposed impacts of other policy such as the Collections and Packaging Reforms are yet to be determined. Whilst we anticipate some diversion of fossil-based materials away from the residual waste stream, we do not know how much this would be in practice. Extended Producer Responsibility will only apply to packaging materials, which we estimate to make up around 18% of our residual waste stream by weight and approximately 40% of our fossil output, meaning that 60% of our ETS costs would remain unfunded if pEPR were to cover ETS costs. Assuming that pEPR fully funds the ETS costs for packaging, NLWA and the north London boroughs would be required to find an additional £8.4m to £21m in their budgets depending on the carbon price. However, there is low confidence that pEPR will cover the current full net costs of waste disposal, and as a result it is doubtful that the full applicable ETS costs would be covered.  

We also estimate that around 2% of our residual waste stream is material in scope of the Deposit Return Scheme. Whilst the intention of Simpler Recycling is to make it easier for residents to recycle and expand the scope of kerbside collections, the success of this is ultimately dependant on the recycling behaviours of residents. Approximately 6% of NLWA residual waste comprises of soft plastics which could be captured by soft plastics recycling from 2027 under Simpler Recycling. However, there is currently a lack of end market for this material meaning it could end up being incinerated or managed through RDF export after being extracted from the MRF. Furthermore, the Collection and Packaging Reforms are heavily focussed on recycling and there is not enough focus on waste prevention, which is the most important and most effective method of reducing carbon emissions. 

Considering that it is unlikely that all material in scope of the Collection and Packaging Reforms will be removed from the residual waste stream, it is entirely possible that the amount of fossil-carbon in residual waste will remain at similar levels, especially where textiles and other high carbon materials such as Absorbent Hygiene Products (AHP) persist. Additionally, once the reforms are fully implemented, it may be realised that there are unintended adverse outcomes. For example, there are concerns that under pEPR, producers may, despite eco-modulation, be incentivised to use greater amounts of fossil-based packaging, as producer fees will be based on tonnes of packaging, meaning producers may choose to switch from heavier, more recyclable, non-fossil packaging such as glass and metal, to lighter, less recyclable, fossil-based packaging such as flexible plastics. In addition to the outlined limitations of other policies, we have low confidence in the development of the reforms themselves. The reforms have experienced numerous delays in implementation, and many aspects of how the schemes will function are still unclear.  

NLWA are committed to preserving resources for future generations and all our boroughs have declared a climate emergency and committed to a net zero trajectory. NLWA and the seven boroughs are currently developing our next Joint Waste Strategy for the period 2025-2040. The Strategy sets out our joint ambitions to reduce waste and increase recycling. This includes promoting prevention, repair and reuse through engagement with local communities and schools, expanding specialist recycling services of difficult-to-recycle materials at our reuse and Recycling Centres (RRCs) and environmental commitments as part of our North London Heat and Power Project (NLHPP): Environment | North London Heat and Power Project. Some examples of work NLWA is already doing to reduce the impact of waste disposal and prevent waste include: 

Awareness-building campaigns for residents, whilst an important aspect of NLWA and other local authorities' work as demonstrated above, have impacts that are difficult to measure and sustain. As a result, they cannot be relied upon as a method of decarbonisation for the purposes of mitigating the impacts of ETS. This is especially the case when producers are able to spend far more money on advertising campaigns that aim to generate consumption. It is simply not possible for local authorities to compete with large businesses for residents' attention and it is not realistic for local authorities to sustain continuous communications required to support behaviour change. This is especially true in urban areas such as north London where a higher proportion of residents regularly move in and out of the area compared to the rest of the country. Additionally, if local authorities are required to meet the costs associated with ETS, services such as resident communications, including the activity mentioned above, would be at a higher risk of being cut in order to ensure that authorities can afford to pay the increased expenditure. 

The pre-sorting of waste to extract recyclable materials is also not a viable option for decarbonising waste to a necessary level to mitigate ETS costs. The costs involved in planning and developing this infrastructure are significant and take a large amount of local authority resource. Alongside this are the results that these facilities produce. In our commitments to reduce waste and increase recycling, in turn aiding decarbonisation of waste, NLWA have commissioned several reports on the feasibility of pre-sorting residual waste, and analysis shows that the presently available technologies are not able to capture nearly enough materials for the benefits to match the costs involved in constructing and running the necessary facilities. A report commissioned in 2022 by NLWA concluded that it would cost approximately £25m per year, and require a significant amount of land for the mechanical pre-treatment of north London's 560,000 tonnes annual residual waste total. The report estimates that this would recycle 38,600 tonnes, leaving 521,400 tonnes in the residual waste stream. This amounts to approximately 7.4% of our residual waste being extracted for recycling. However, this amount being recycled is dependent on the available markets, which can often not be guaranteed due to the low quality of the extracted material. This means that the actual amount of material that gets recycled could potentially be significantly less than what has been extracted. 

There are a small number of levers that could be provided to local authorities to decarbonise their waste streams. This includes giving local authorities powers to enforce mandatory recycling. It is also the case that the Government have taken away decarbonisation pathways for local authorities, such as, through Simpler Recycling, which in conflict with the aims of the ETS, requires LAs to collect residual waste at least fortnightly, when many local authorities have been able to reduce their residual waste levels by moving to less frequent residual waste collections.  

Even with the limited number of levers available to local authorities to decarbonise their waste streams, there remains a high variance between them on the factors that would enable decarbonisation to happen. For example, over 60% of properties in north London are flats and shared properties, nearly 40% higher than the England average. North London also has some of the most deprived areas in the country, with a high variance in deprivation levels across the seven boroughs. Increasing levels of recycling in these areas is significantly more difficult than in more suburban areas. Reasons for this include lack of storage space in areas with high-density or crowded housing, a more mobile population creating challenges for communication and engagement with services, and households affected by poverty having higher-priority concerns. Additionally, despite many residents utilising the recycling services that are available to them, it only takes one resident to contaminate a communal recycling bin, meaning that the efforts taken to recycle by other residents are cancelled out, and the entire load is consigned to residual waste for incineration. Furthermore, north London’s population of 2 million is expected to grow an additional 3% by the time the ETS proposals are implemented in 2028, and 6% by 2040. The vast majority of these new residents will be living in properties with communal bins, meaning that these factors contributing to levels of residual waste will only increase. 

NLWA welcomes a new burdens assessment in the context of the UK ETS and encourages the ETS Authority to undertake and publish a full impact assessment of the ETS scheme on local authorities, as soon as possible, considering the factors NLWA has highlighted in this response.  

(Y/N) If yes, please provide further details. We would particularly welcome evidence for the whole contractual period and/or lifetime of the facility.  

Yes 

As a waste disposal authority, NLWA does not generate excess income. NLWA was established in 1986 as a joint statutory waste disposal authority. The Authority’s primary responsibility is to arrange for the disposal of waste collected by its seven constituent boroughs. The Authority is funded almost completely by a levy it places on its constituent borough councils and specific charges for some types of waste. Any surplus funds arising at the end of each year (including any income derived from the sale of recyclate or through the sale of electricity) is reimbursed back to our constituent boroughs as such no profit is generated. 

In relation to carbon capture, initial work undertaken on behalf of the Authority suggests carbon capture will not be profitable and is likely to come at a cost to our constituent boroughs as discussed below. 

NLWA is currently exploring the potential to retrofit the Authority’s Energy Recovery Facility (ERF) with carbon capture. The ERF is referred to as a “dispersed emitter” due to its location in a highly urban, densely populated area which is not located in close proximity to other emitters (to take advantage of economies of scale) nor is it located close to any of the Government Track 1 and Track 2 cluster. If facilities are to be expected to utilise CCS to mitigate their ETS liability, the Government needs to expand its offer for CCS. 

The Authority is exploring various transport options for exporting CO2 from our facility to permanent storage locations. These options include both pipeline and non-pipeline transport (NPT) methods, specifically by road, rail, barge, and shipping.  

NLWA welcomes Government commitment to recognise NPT by allowing UK ETS participants who will use NPT methods for CO2 storage purposes to make carbon subtractions from UK ETS allowances. According to survey data collected by the Carbon Capture and Storage Association (CCSA) around a third of all industrial sites planning to retrofit carbon capture require NPT to connect to permanent stores. Owing to the dispersed location of many EFW sites it is likely that a high proportion will require NPT. As more CCS projects emerge, particularly in dispersed locations, the proportion of sites requiring NPT to connect to CO2 stores is expected to increase. 

Significant capital investment is required to deliver a carbon capture facility and associated transport infrastructure. Research undertaken on behalf of the Authority indicates that capex for the project could range from around £249 million utilising road transport and could be as high as up to £431 million utilising a pipeline solely operated by NLWA (assuming 25-year operational life). This includes an estimated figure of around £175 million for the construction of the carbon capture plant plus some retrofit work to the ERF. On a levelised cost basis, project costs could range from £120 to £139 per tonne of CO2 processed. The inclusion of negative emissions in the ETS could reduce the cost impact to around £64 - £84 per tonne of CO2 processed. 

Cost estimates were based on Association for the Advancement of Cost Engineering (AACE class 5) and do not include for contingency which at this early exploratory stage could be between 25-40% according to AACE methodology. NLWA is willing to share more detailed calculations if this information would be helpful. 

This work suggests carbon capture will not be profitable and will come at a cost to our constituent boroughs. Unless further efficiencies are delivered across the CCS value chain, to justify the investment in carbon capture and associated infrastructure from a financial perspective would require a carbon price of at least £133 per tonne of CO2 under the UK ETS. As outlined above, local authority finances would be unlikely to cope with that level of expense from ETS.  

The Authority urges the new Government to maintain momentum on the CCUS Cluster Sequencing Programme to ensure the UK remains a global leader and forefront of this industry. Non-pipeline transport of CO2 will be vital to enable dispersed sites such as the Edmonton EcoPark to decarbonise. There is currently an absence of a comprehensive policy framework which risks market confidence. The Authority’s view is that strong strategic direction is required from the Government as soon as possible to support the development of CO2 hubs such as rail heads and ports ahead of the market transition phase. 

Please refer to the response to question 49. Based on the Authority’s analysis and current understanding of projected capex/opex spend a carbon capture solution for the ERF could come at a significant cost to our constituent boroughs. There will be no profits or savings generated. 

(Y/N) Please give further details to support your answer, including any information on the type, form and content of guidance needed.  

Yes 

NLWA agrees that guidance on decarbonisation for local authorities and EfW operators must be published. As part of this, Government must engage with local authorities and EfW operators at all stages of development of this guidance. It is essential that any decarbonisation methods outlined in this guidance are practicable in terms of cost and resource required, and are guaranteed to yield results that have a material impact in mitigating the costs incurred though ETS. However, as outlined in previous answers, we do not believe that there are any methods available in the medium-term to local authorities and EfW operators that would effectively mitigate the impacts of ETS. 

The challenges highlighted in our response to Q48 on local factors impacting waste decarbonisation further stress the need for guidance to be made available to local authorities on ways in which they can decarbonise to minimise the high costs that the ETS will bring to poorer and more densely populated areas. 

Defra committed to publishing a 'Waste Sector Decarbonisation Plan' as referenced in the waste prevention programme for England: Maximising Resources, Minimising Waste, to help government 'decarbonise the waste sector in England through to Carbon Budget 6 (2033 to 2037)'. Defra has yet to publish this plan and NLWA would urge government to develop and publish such plan imminently to understand the most appropriate and impactful policies for decarbonising the sector.

(Y/N) Please give further details to support your answer, including any information on the type of support mechanism(s) recommended and details on the type of materials that may fall outside the scope of the proposed support mechanisms detailed above.  

Yes 

As mentioned in our response to question 48, the most effective method of decarbonisation for local authorities is to target incentives at the producer-level. NLWA believes that payments received through Extended Producer Responsibility for Packaging must cover the full costs of managing packaging waste including ETS costs. However, as packaging waste only makes up for an estimated 18% of our residual household waste stream, Extended Producer Responsibility must be expanded to cover as many waste streams as practicably possible. It is unfair for local authorities and the council taxpayer to bear the cost burden of managing fossil-based materials that have been placed on the market by producers. The Government should use the packaging extended producer responsibility regime (pEPR) and its provisions for modulated fees that can drive down the fossil fuel content of packaging as a template for similar EPR regimes for other product/waste streams (such as textiles and AHPs). These will then target the design and manufacturing processes and producers who manufacture or import products as the single points of contact to decarbonise (and minimise) the fossil-derived wastes that local authorities are obliged to manage. 

There are a small number of levers that could be provided to local authorities to decarbonise their waste streams. This includes giving local authorities powers to enforce mandatory recycling. It is also the case that the Government have taken away decarbonisation pathways for local authorities, such as, through Simpler Recycling, which in conflict with the aims of the ETS, requires local authorities to collect residual waste at least fortnightly, when many local authorities have been able to reduce their residual waste levels by moving to less frequent residual waste collections.  

NLWA has already made great efforts to introduce schemes that enable residents to divert their waste away from the residual waste stream, such as offering recycling of harder-to-recycle materials including carpet, mattresses, hard plastic, and expanded polystyrene, However, the implementation of these schemes is a result of political will, as they can carry large costs and there is often a lack of infrastructure to deal with these materials. If funding were to be provided for local authorities to decarbonise as part of the ETS, then NLWA would be able to carry out more of this work. Additionally, to ensure the success of schemes that would enable greater decarbonisation, Government should take action that enables the development of recycling infrastructure for harder-to-recycle materials. 

Government action to enable local authorities to decarbonise their waste is essential given the limited number of levers currently available to them to do so. The factors contributing to recycling levels vary vastly across local authorities, as outlined in our response to Q48 on the challenges of recycling in poorer, more densely populated areas.  

(Y/N) Please give further details to support your answer.  

No 

Due to the level of uncertainty of solid sampling, NLWA believes that it would not support accurate cost pass through. On the basis that combustion of waste relies on well mixed waste streams within the waste bunker and therefore apportioning costs will mean segregating wastes by source and sampling separately. Obtaining representative samples of waste can be challenging given uncertainty related to accurate sampling, seasonal variations in waste composition and variability across individual suppliers and deliveries. Physical sampling of waste to achieve the necessary level of accuracy is likely to be cost and labour prohibitive. Furthermore, not all sampling is carried out in the same way, and as a result there would likely be varying standards across different EfW operators.

(Y/N) Please give further details to support your answer.  

No 

NLWA believes that these methods, particularly carbon-14 analysis, would not support accurate, fair or transparent cost pass through, as the results cannot be traced or apportioned back to individual customers. 

(Y/N) Please give further details to support your answer.  

Yes 

Alternative methods must be explored to ensure that any method chosen is fair and transparent.  

While default calculation factors might be a more simple approach, these need to be co-designed with local authorities to ensure there are no unintended consequences and that they are fit for purpose. NLWA would be willing to work with DESNZ and the UK ETS Authority on this.  

(Y/N) Please give further details to support your answer.  

Yes 

Whilst NLWA does not support the inclusion of waste in the ETS, a phased approach would enable more time to understand the impacts of the Collection and Packaging Reforms as well as other waste policy.

If local authorities are required to pay the costs associated with the ETS through their existing budgets, money will be diverted from services which impact residents across all protected characteristics, including disabled, elderly and younger people. Additionally, local authorities covering densely populated urban areas are more likely to have lower levels of recycling. This means they are likely to have greater levels of residual waste, which through the ETS, could result in these local authorities having to pay higher costs and potentially diverting funds from essential services. These areas will typically have higher levels of poverty and deprivation, as well as higher levels of ethnic diversity. So the impacts of the policy could disproportionately affect those groups and worsen existing inequalities.  

(Y/N) Please outline your reasoning and provide evidence to support your views.  

Yes 

NLWA agrees that if EfW were to be included in the ETS, that the scheme should support heat offtake, as utilising the heat generated from the facility saves carbon that would be generated elsewhere.  

NLWA’s currently under construction energy recovery facility will utilise heat offtake and is expected to have 92.3% lower carbon emissions than gas boilers and 60% lower carbon than heat pumps. The BRE published carbon factors which reflect the carbon content of the fuel supply to give heat / hot water are: 

(Y/N). Please provide as much detail as possible to support your answer.  

NLWA supports the development of robust mechanisms to encourage the export and use of heat. The incentive mechanism needs to be reliable enough that heat networks are able to be invested in with certainty that the costs of investment will be offset through the ETS. Based on current understanding, NLWA would suggest using subtraction of allowances as the main incentive mechanism. 

UK ETS obligation should be reduced by the amount of useful “wasted” heat that is saved via the heat offtake. Any incentive mechanism also has to be considered alongside points on ‘cost pass through’ in the questions above. Assuming that EfW operators will pass costs on to their customers (which is what will happen under the DEFRA-sponsored standard form of contract for residual waste infrastructure and services), this would reduce any incentive on those operators to develop heat networks as a cost saving. Instead, as customers, local authorities will remain exposed to the ETS costs, without having the necessary tools and levers to develop mitigations and reduce carbon emissions or make use of heat.