Blog: What is the Emissions Trading Scheme?
What is the Emissions Trading Scheme (ETS)?
Blog post from Yomola Oyedipe, Project Manager, ETS
Carbon emissions. Decarbonisation. Net Zero. We see these issues discussed in the media almost daily.
What we may not all be aware of are the innovative mechanisms being implemented to meet the UK’s goals around them, and how they will affect businesses operating here. One of the latest such developments is the UK Emissions Trading Scheme (ETS) – an initiative which sets a limit on the total amount of carbon dioxide and other greenhouse gases emitted into the atmosphere across certain industries.
The scheme details that relevant companies must buy permits (each equating to one tonne of CO2) to cover their emissions. Companies that end up emitting fewer emissions than their permits allow can sell ‘spare’ permits and similarly, companies can buy more if needed. What doesn’t change, however, is the overall limit.
This means that there is only a certain number of permits to go around, creating a market to trade spare permits and therefore a financial incentive for businesses to reduce their carbon footprint and support the UK’s effort to build a more sustainable future.
Viridor is supportive of policy change that drives action to better treat recyclable waste, and in turn, the battle against climate change, and last year, the UK Government confirmed that Energy from Waste will be included in the scope of ETS from 2028. That is why we have opted to help at this early voluntary stage, known as the Monitoring, Reporting and Verification (MRV) stage, in which companies are encouraged to start measuring, recording and checking carbon emissions. MRV began on 1 January this year.
The EfW sector is more complex than others – at the end of the day, not all waste is the same – so it’s important that, as an industry leader, we provide data, and insights to help the government in shaping the policy – we want it to be as effective as possible for the wider EfW sector. This current voluntary phase is also a fantastic opportunity to get familiar with the new requirements ahead of time.
As project manager, I coordinate our ETS Programme here at Viridor ensuring we provide the most accurate, and useful data to government at this stage, as well as planning for 2028. Our technology teams are hard at work developing smarter ways to standardise carbon reporting, while our commercial team is working with our customers to ensure permits are allocated correctly. We also have our policy team, engaging with government at regular intervals, so that we can help to shape effective, future‑proof regulation.
ETS certainly isn’t the one and only answer to climate change, but it is an important piece of policy that really could support meaningful change across the sector. In the meantime, our individual actions every day still count – being mindful of the waste we create, getting the bus, jumping on your bike when you can, and switching the lights off when you leave the room. It all helps.
Find out more in this Insight piece looking at Emissions Trading Scheme (ETS) – application to the Energy from Waste Sector.