A new tax on the carbon emitted from burning waste could load billions of unavoidable costs on councils over the next decade instead of manufacturers picking up the bill, new research for the Local Government Association (LGA), County Council Network (CCN) and District Councils Network (DCN) has found.
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 last Government proposed to expand it to the incineration of waste from 2028.
In response to a consultation on the scheme, councils are calling on the Government to ensure the costs are passed on to the industries creating fossil-based material in the first place – such as found in packaging, textiles, electricals and furniture.
New analysis by the LGA, CCN and DCN show the proposals could cost councils as much as £747 million in 2028 and could rise to £1.1 billion in 2036, with a total cumulative cost over this period as high as £6.5 billion. Volatile market costs create additional risks for councils that must set balanced budget.
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.
By placing this cost on industry, the Government will incentivise producers to reduce the level of fossil-based material created in the first place while also raising funding to reinvest in solutions such as carbon capture and storage technologies.
Although there are plans to transfer costs for packaging waste onto producers, the new analysis suggests this would cover only 19 per cent of costs while there are no plans to do the same for the vast majority of waste that is sent for incineration.
LGA polling with YouGov found the public are 12 times more likely to think costs in reducing packaging should be met by companies producing it (48 per cent) rather than councils (4 per cent)
Cllr Adam Hug, environment spokesperson for the LGA said:
“Councils support the principle of this scheme’s objective to incentivise a reduction in carbon emissions from waste incineration and to encourage recycling efforts, but to succeed it must put the right incentives in the right places.
“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. Council’s 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 council’s in their efforts to increase recycling.”
