Following on from our previous blogs on the impact of Simpler Recycling & DRS and pEPR on residual waste calorific value (CV), here we look at the effects in relation to the Emission Trading Scheme (ETS). We have applied a combination of the two previous scenarios to look at the ETS cost impacts and tonnage changes from the baseline in 2025/26 to the policy measures anticipated to come into effect in 2028. This is again applied to the waste composition of a rural authority with no food waste collection in the baseline / Business as Usual. The effects resulting from these policy measures will differ by authority, rurality and if a food waste collection is already in place.

The scenarios are:

• Business as usual (BAU) – current residual waste composition, with no changes
• Extended Producer Responsibility for Packaging (pEPR) having an effect, the Deposit Return Scheme for single use drinks containers (DRS) introduced and Simpler Recycling implemented –
• Medium levels of Simpler Recycling – introduce collections of food waste, plastic film, cartons, PTT - all with ‘medium’ yield and DRS implemented (90% capture of PET drinks bottles and Al cans).
• ‘Material Substitution and Recycling Diversion’ – under pEPR, a proportion of ‘red’ (50%) and ‘amber’ (50%) rated packaging materials move to ‘green’ alternative packaging materials in the residual waste (apportioned in accordance with the current green material composition) and a proportion (20%) of all subsequent ‘green’ materials are removed from the residual waste stream assuming it is then recycled.

The graph and tables below show the tonnage and ETS applicable tCO2 emissions of the two scenarios.

As shown in the table and graph above, the combined impact of pEPR, DRS and Simpler Recycling might be expected to deliver a much lower residual waste tonnage, slightly reduced CV and yield a significant ETS liability / carbon reduction in comparison to the BAU scenario.

The CV of the residual waste decreases by ~2.5% with the policy changes in effect compared to BAU. While the tCO2e from fossil carbon (that will be accountable under ETS) is modelled to decrease, both per tonne of residual waste, and furthermore because there is less residual waste.

The table below shows the financial implications of the introduction of ETS for this rural Council, and what the impact might be on the Business-as-Usual tonnage, and then again post implementation of Simpler Recycling, EPR and DRS. It assumes a starting point of 50,000 tonnes of residual waste.

Using this residual waste composition example, there is a substantial additional cost burden for energy from waste disposal under the ETS scheme, modelled to add between +£8 and +£18 per tonne on residual waste costs (before EPR / DRS and simpler recycling changes take effect).

This increased cost can be mitigated by the policy changes around pEPR, DRS and Simpler Recycling, but remains a significant cost burden, which could add between +£7 and +£17 / tonne onto treatment costs. While the impact on the treatment costs (per tonne), via ETS might be modest (using this example), it would also be anticipated to be applied to a lower residual waste tonnage, reducing the overall treatment cost incurred for this Council by £100k - £240k per annum.

If you’d like us to look at your waste composition and the potential financial effects of policy for your local authority, contact us paul@frithrm.com or call tel. 01746 552423. For more blogs on this series of waste composition and government policy, see [www.frithrm.com/news.php ](http://www.frithrm.com/news.php )

1 - Traded carbon values used for modelling purposes, 2025 - GOV.UK