Scottish councils could face an additional £28.7 million annual bill from 2028 when waste incineration is brought within the scope of the UK Emissions Trading Scheme (ETS), according to a new analysis by Zero Waste Scotland that has prompted campaigners to call for stronger action to reduce plastic waste and dependence on incineration.1
The study, commissioned by Zero Waste Scotland, assessed the impact of extending the UK ETS to energy-from-waste (EfW) and waste incineration facilities. It found that fossil carbon emissions from Scottish local authority residual waste amount to approximately 718,000 tonnes of carbon dioxide equivalent annually, with plastics accounting for a substantial proportion of those emissions.
Under current projections, local authorities could incur ETS-related costs of £28.7 million in 2028. Although forthcoming measures such as Scotland’s Deposit Return Scheme and the collection of plastic films and flexibles under Extended Producer Responsibility (EPR) arrangements are expected to reduce emissions and associated costs, councils would still face estimated ETS costs of £27.02 million annually. Further waste-reduction and recycling measures could lower the figure to £24.94 million, according to the report.
Friends of the Earth Scotland said the findings demonstrate the financial consequences of policies that have encouraged waste incineration rather than greater waste prevention and recycling.
In a press release responding to the report, the environmental group argued that the Scottish Government “must bear the blame for encouraging councils to incinerate waste, rather than reduce and recycle it”.2
The campaign group contends that revenue expected from the UK-wide packaging Extended Producer Responsibility scheme could be largely offset by the additional costs imposed through the ETS extension, limiting the financial benefits available to local authorities.
Zero Waste Scotland’s analysis found that payments to councils through the packaging EPR scheme could offset around 40% of ETS costs associated with materials covered by the scheme, but would not eliminate the overall financial burden.
The report also highlights significant variation between Scotland’s 32 local authorities, with costs dependent on waste composition, recycling performance and the volume of residual waste sent for incineration.
From January 2028, operators of waste incineration and energy-from-waste facilities will be required to purchase carbon allowances covering fossil-derived emissions under the UK ETS. These costs are widely expected to be passed on through higher gate fees charged to local authorities and other waste producers.3, 4
The UK ETS, established after the UK’s departure from the European Union, currently covers sectors including power generation, aviation and heavy industry. The scheme is being expanded as part of wider efforts to reduce greenhouse gas emissions and support the transition to net zero.5
Zero Waste Scotland said the findings indicate that significant further reductions in fossil-carbon emissions could be achieved through improved collection of plastic packaging, non-packaging plastics, textiles, carpets and other recyclable materials that currently enter the residual waste stream.
Campaigners argue that reducing plastic production and increasing material reuse and recycling would not only lower emissions but also help shield councils from escalating carbon-related disposal costs in the years ahead.
Notes
[1] Zero Waste Scotland, Impact of the extension of the UK Emissions Trading Scheme to Energy from Waste on Scottish Local Authorities, 15 May 2026. Available at: https://www.zerowastescotland.org.uk/resources/impact-extension-uk-emissions-trading-scheme-energy-waste-scottish-local-authorities
[2] Friends of the Earth Scotland, Councils face escalating £28mill bill for plastic waste burning, press release, 1 June 2026. Available at: https://foe.scot/press-release/
[3] Resource Media, Scottish councils face £28m annual bill as ETS extends to incineration, June 2026.
[4] Local Government Association, Emissions Trading Scheme extension to waste: Survey of councils, April 2025.
[5] UK Government, UK Emissions Trading Scheme (UK ETS): a policy overview.
