Power from waste and biomass |
Emissions trading: a new era for energy-from-waste plants
Both the EU and the UK emissions trading schemes/systems (ETS) plan to include energy-from-waste (EfW) facilities as from 2028. This presents both opportunities and challenges for organisations operating within the EfW domain
Greg Logelain Associate Director, Waste and Infrastructure, Ricardo
The EU and UK ETS are market-based mechanisms designed to incentivise the reduction of greenhouse gas emissions. They operate by setting a cap on the total amount of emissions allowed within the scheme. Participants are allocated allowances representing the right to emit a certain quantity of greenhouse gases. If their emissions exceed their allowance, they must purchase additional allowances from other participants, effectively creating a financial incentive to reduce emissions.
The inclusion of energy from waste facilities in the schemes is a recognition of their role as emitters of greenhouse gases and marks a significant turning point for the waste sector. While EfW offers a valuable solution to managing residual waste and generating heat and power, it still involves the combustion of waste, which releases carbon dioxide; the municipal solid waste burned is part-fossil and part-biogenic, and hence the electricity and heat output from an EfW can be considered – in part – a renewable energy source. By incorporating EfW into an emissions trading regime, the aim is to encourage EfW operators to invest in technologies and operational practices that minimise greenhouse gas emissions. Operators within an ETS only have to pay for emissions of fossil carbon dioxide, so this presents a specific challenge for EfW operators: to accurately
determine the fossil/bio split of their CO2 emissions.
The emissions trading schemes are expected to stimulate innovation, and drive the development and adoption of cleaner technologies, such as carbon capture and storage, within the waste sector. The EU goal of including EfW facilities in its emissions trading system by 2028 will follow an impact assessment to be carried out in 2026. This will place a price on the carbon emissions from municipal waste incineration, though hazardous waste incinerators will remain exempt. The EU has also required member states to start measuring, reporting, and verifying emissions from EfW facilities from 2024.
Decarbonising EfW in the UK The UK emissions trading scheme was set up post-Brexit to replace the UK’s previous participation in the EU scheme. There is considered to be future potential for linkage between the two systems.
16 | October 2025|
www.modernpowersystems.com
The timetable for incorporating EfW into the UK ETS is similar to that planned for the EU Emissions Trading System.
In the UK, the Climate Change Committee’s Seventh Carbon Budget, published February 2025, stressed the need for more stringent decarbonisation policies in the EfW sector. Specifically, it recommended that all new EfW facilities have a viable route to connecting to carbon capture and storage technology. A recent project delivered by Ricardo, the global strategic, environmental and engineering consultancy, as part of the UK-government- funded research programme Climate Services for a Net Zero Resilient World (CS-N0W), aimed to establish the basis for a monitoring, reporting and verification (MRV) system suitable for deployment as part of an emissions trading scheme. Greenhouse gas emissions from the waste sector have declined in recent decades, as the UK’s landfill tax has reduced the amount of biodegradable waste being buried, and the capture and use of landfill methane has become more widespread. However, the reduction in emissions has stabilised as waste is diverted to EfW facilities (see graph below). Whilst electricity from EfW reduces the demand for fossil fuel power generation, it is a
45 40 35 30 25 20 15 10 5 0
2008 2011 2014 2017 2020 2023 2026 2029 2032 2035 2038 2041 2044 2047 2050 EfW
Incineration Composting Emissions from waste (CO2 Wastewater e) – historical (2008-2022) and Balanced Pathway (2025-2050) (Source: UK CCC seventh carbon budget) Other waste growing source of CO2 . EfW now contributes the
second largest share of waste sector greenhouse gas emissions after landfills.
By 2022, 57 EfW facilities were operational in the UK, contributing roughly 3% of total UK power generation. None of these facilities is equipped with carbon capture and storage technology. The Climate Change Committee argues that by 2050, all of them should have CCS.
This is the backdrop against which the initiative to include EfW facilities in the UK ETS can be seen.
The MRV challenge: monitoring, reporting and verification The inclusion of EfW facilities in the UK ETS can be regarded as a critical step towards aligning the waste sector with the UK’s ambitious net-zero targets. However, it presents a series of challenges, not least the development of measurement, reporting and verification solutions that enable EfW to join the UK ETS and achieve comparable levels of accuracy in its fossil carbon emissions data to that of other sectors participating in the ETS.
MRV for EfW facilities is technically more complicated than it is for other power plants. Most fossil fuel power stations apply rigorous
Emissions (Mt CO2
e)
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