The UK Emissions Trading Scheme (UK ETS) is evolving and, for the first time, Energy-from-Waste (EfW) and waste incineration operators are being invited to take part.
This is the first in a series of website updates that will explore this in more detail. It looks at what the UK ETS means for Energy-from-Waste Operators, why the voluntary MRV (monitoring, reporting and verification) period matters and how organisations can benefit from getting involved early.
What is the UK ETS?
The UK ETS is a ‘cap and trade’ system, aimed with reducing the total greenhouse gas emissions from energy intensive industries. Emissions are converted into tradable allowances, with the capped emissions reducing each year to provide an economic incentive for installations to decarbonise.
Until now, the waste sector has been excluded.
Why is the Waste Sector being included?
Following numerous consultations (March 2022, May 2024) and subsequent responses (June 2023, July 2025), the UK government confirmed the expansion of the ETS to cover more sectors to meet its net zero targets. While full inclusion (with compliance obligations and carbon costs) for the waste sector is expected from 2028, the government is offering a voluntary MRV-only period from 1 January 2026 to 31 December 2027.
It is important to note that Northern Irish EfW installations remain under the EU ETS due to the Windsor Framework, with Department of Agriculture, Environment and Rural Affairs (DAERA) as the regulator.
What is the MRV-only period?
MRV stands for Monitoring, Reporting and Verification. During this voluntary phase operators:
- Will monitor and report CO₂ emissions quarterly
- Don’t need to buy or surrender allowances
- Will work with regulators to test data collection methodologies and improve data quality
- Will help shape how the scheme will work once it becomes mandatory
Why should you participate?
Even though it’s voluntary, the MRV-only period is designed to mirror UK ETS requirements as closely as possible so there are good reasons to get involved:
- Test and finalise methodologies ahead of 2028
- Influence policy
- Utilise regulator support without compliance costs
- Gain insights to emission profile and identify reduction opportunities
What’s next?
In the next blog, we will explain which Energy-from-Waste operators will qualify for the MRV-only period and how to assess whether your installation is included.
Make sure to follow us on LinkedIn to get notified when the next blog in the EfW series is released. If you would like to speak to a Swan Energy consultant, get in touch.
