Expanding the Emissions Trading Scheme to apply to the incineration of waste could cost local authorities as much as £747 million, rising to £1.1 billion in 2036, analysis by councils shows.
The new analysis by the County Councils Network (CCN), the Local Government Association, and the District Councils Network (DCN) found the total cumulative cost over 8 years could be as high as £6.5 billion.
The Emissions Trading Scheme (ETS) is a system that puts a market price on carbon emissions. It currently applies to the aviation industry, and the Conservative Government proposed to expand it to the incineration of waste from 2028.
Cllr Adam Hug, environment spokesperson for the LGA, commented: “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.
“Councils’ are also increasingly ensuring that energy is generated from the incineration process supporting both the grid and electric vehicle fleets.
“We urge government to review proposals, to hold industry responsible for reducing the level of waste it creates in the first place, alongside wider support for councils in their efforts to increase recycling.”
Current proposals risk councils and local taxpayers facing enormous costs.
The CCN, LGA, and DCN said councils have no powers to reduce the amount of fossil-based material put on the market, and no meaningful levers to reduce the levels of fossil-based waste sent for incineration.
In response to a consultation on the scheme, councils are calling on the UK Government to ensure the costs are passed on to the industries creating fossil-based materials.
The councils argue that by placing the cost on industry, the government will incentivise producers to reduce the level of fossil-based material created while also raising funding to reinvest in technologies, such as carbon capture and storage.
Cllr Richard Clewer, Infrastructure and Planning Spokesperson for the CCN, said: “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.”
