EfW plants to be included in UK carbon market

The government is pressing ahead with plans to include energy from waste (EfW) plants in the UK’s post-Brexit emissions trading system (ETS).

A paper by the authority that is overseeing the new carbon market gives the go ahead for the incorporation of greenhouse gas (GHG) removals into the UK’s replacement scheme for the European Union’s ETS.

The paper, which sets out the government’s response to a consultation carried out in the first half of last year on the development of the UK ETS, outlines a number of additional sectors that are being brought into the scheme.

It says that all waste incineration, including EfW plants, will be brought under the ETS’ umbrella in 2028, with a two-year phase-in period beginning in 2026. Participants in the ETS, which currently applies to just power plants and factories, must buy or receive allowances for the green house gases that they emit.

The 2028 deadline will give incineration plants five years to prepare for incorporation into the ETS, including two to monitor their emissions.

The level of emissions allowances within the ETS for the waste sector will decrease year by year, according to the government response.

The government’s move to include EfW within the ETS follows a letter from the Climate Change Committee to ministers in the UK and devolved governments calling for this step to implemented as soon as possible.

Further details on incorporation of incinerators and EfW plants into the ETS will be consulted by the end of 2023, according to the paper.

GGR technologies will also be incorporated into the ETS, the government has announced in the response.

And the paper says the government will consult on introducing sustainability criteria for all for all biomass used in power plants operating within the ETS.

On the design of the overall scheme, the response sticks with what it describes as ambitious proposals in last year’s consultation paper to align from 2024 the cap on emissions within the ETS with the UK’s net zero goals.

An enhanced role for the UK ETS, including legislation to keep it running until at least 2050, was one of the recommendations of the independent review of net zero, which was carried out by former energy minister Chris Skidmore earlier this year.

Marta Krajewska, deputy director at Energy UK, said: “Energy UK welcomes the clarity that this response brings to the UK power sector after months of uncertainty around the future of the scheme.

“The UK’s carbon market is a powerful tool in promoting the transition to a low-carbon economy, and Energy UK supports the ETS as a key policy for achieving the UK’s target of Net Zero emissions by 2050.  We therefore support the authority’s decision to set the UK ETS cap to be aligned to and consistent with Net Zero, and look forward to engaging with government over the coming weeks and months on the finer details within the response.”

Ross MacKenzie, Drax’s interim group director of corporate affairs, said the company is “delighted” that the government intends to include engineered GGRs in the UK ETS.

“The development of such a market is an important step towards deploying large-scale carbon removal technologies such as Bioenergy with Carbon Capture and Storage (BECCS). These technologies are essential in the fight against climate change as they permanently remove more carbon dioxide from the atmosphere than they emit.

“With the right support from the UK Government, Drax plans to invest billions into delivering BECCS at our power station in North Yorkshire. This would enable the plant to simultaneously remove millions of tonnes of carbon dioxide from the atmosphere whilst also strengthening UK energy security through generating reliable, renewable power when the wind isn’t blowing, or the sun is not shining.”