Councillors guide to waste and recycling reforms

councillors guide to waste and recycling reforms
Achieving net zero and circular economy goals requires a transformative approach to how we produce, consume, and manage waste.

Introduction

Councils in England have committed to decarbonisation and work hard to deliver high quality local waste services. Local Government Association (LGA) resident polling shows that 76 per cent of residents are very satisfied or fairly satisfied with their waste collection service. 

These efforts will be supported by the introduction of Simpler Recycling, the Deposit Return Scheme (DRS), Extended Producer Responsibility for Packaging (pEPR) and the Inclusion of Energy from Waste (EfW) in the UK Emissions Trading Scheme (ETS). The policies are designed to reduce residual waste, boost recycling, and incentivise businesses to adopt more sustainable practices. 

These reforms come at a crucial time for addressing the interconnected environmental and biodiversity crises, public concern about plastic pollution and litter, and supporting opportunities for green growth. Reducing raw material consumption through recycling can support wider goals of regenerating nature and reducing greenhouse gas emissions. Activities related to recycling and reuse can increase economic resilience, creating jobs and opportunities for growth.

For councils to make the most of the opportunities of the reforms, they must consider them holistically. Together, they can support recycling rates to increase, and effective communication with residents, and improved waste data, will boost this potential. However, they do come with financial risk for councils, including loss of some recycling rebates and higher incineration costs. For these reasons, local authorities could consider:

  • Delivering positive communication with residents and businesses about the benefit of the reforms and what’s expected of them can support engagement, making reforms a moment of change that can influence recycling behaviours.
  • Collecting more granular waste data can enhance understanding of material streams and how policies will impact them, enabling the development of evidence-based strategies.
  • Developing financial strategies to reduce risks and plan for costs related to service changes, collection and disposal, recycling revenue, and infrastructure investment.

Waste and recycling strategy in England

The previous government set out targets in the Environment Act 2021 to reduce residual waste and encourage recycling. The current government has committed to the implementation and plans to update targets which currently include:

  • reducing municipal waste sent to landfill
  • eliminating biodegradable municipal waste sent to landfill
  • increasing municipal recycling rates
  • reducing emissions from landfill and incineration
  • eliminating avoidable waste.

To achieve this transition, in 2023, Defra launched a new Waste Prevention Programme for England: Maximising Resources, Minimising Waste to change our relationship with how we use resources. It built on the Resources and Waste Strategy (2018), introducing plans for DRS, pEPR and Simpler Recycling to increase recycling rates. Looking ahead, the inclusion of EfW in the UK ETS will introduce a strong financial incentive to deliver these policies and reduce plastic sent to incineration.

The policies will help address public concerns around the environmental impact of litter and waste by increasing recycling rates and decreasing the littering of in-scope DRS containers. The reforms will create new recycling processes for many households and businesses, such as through kerbside food waste and flexible film collections. Policies influencing producers hope to influence product design, which should encourage use of recyclable materials and further simplify recycling. 

Recognising how they are interconnected will help local authorities gain the maximum environmental benefits of the reforms and support efficient services. The reforms affect the material streams collected by local authorities, how they are collected, what infrastructure is needed to reprocess and treat them, and how services are funded. Local authorities will be impacted in different ways by the reforms depending on their current set-up for managing waste and recycling. When reviewing service design, contracts and procurement plans a holistic approach considering all policies will ensure local authorities are prepared for new responsibilities, save costs and maximise benefits from complementary aspects. 

The guidance document will cover each policy, including their aims, timelines, key considerations and how local authorities and councillors can prepare. 

Simpler Recycling

What is it?

In 2023, the UK government announced Simpler Recycling in England. It aims to make recycling easier by making the materials which are collected consistent across the country, at home and at work. Councils and other waste collectors will be able to co-collect some material streams. 

The new default requirement for households, workplaces and non-domestic premises (such as hospitals and schools) will be kerbside collections of the following core material streams:

  • residual (non-recyclable) waste
  • paper and card collected separately from other recyclables
  • all other dry mixed recyclable materials – plastic, metal and glass (including plastic film from 2027)
  • food waste collected weekly
  • garden waste (households only; can be co-mingled with food waste).

Collection frequencies and designs will be determined by local authorities for material streams, apart from food waste which should be collected weekly unless a transitional arrangement applies. The core services will be provided for free to households, except for garden waste which is chargeable. Businesses will continue to pay for their own waste management services.

From April 2025, the general public and local authorities will be able to report workplaces not following the rules to the Environment Agency. Defra will provide guidance on how to report non-compliance.

Department for Environment Food and Rural Affairs (Defra) plans to reduce contamination risks by requiring separate collection of paper and card, which are more vulnerable to food and liquid contamination. Plastic, metal, and glass can be co-collected with lower contamination risk. This approach aims to improve recycled material quality and revenue.

Councils will still have the flexibility to deliver these changes in the most appropriate way for their area, providing the best value for money. The frequency of residual collections is determined by local authorities. As recycling services expand, local authorities may wish to review their residual frequency. Councils can co-collect paper and card with other dry recyclables if separate collections are impractical or don’t lead to the best environmental outcomes, by providing a short, written assessment explaining their decision. Members of the public and the Environment Agency can request to view this assessment. Councils can provide additional containers without an assessment. 

The transition costs for introducing weekly food waste collections by 31 March 2026 will be supported by government grant funding. The UK Government announced £295 million would be available to support councils in 2024. It is uncertain how wider transition costs will be covered, as more clarity is needed on whether New Burdens funding will support Simpler Recycling changes and whether Defra will support the ongoing cost of food waste collections. Packaging EPR funding is not ringfenced for Simpler Recycling but can be used for this. Defra have encouraged stakeholders concerned about transition costs and timelines to contact them, for example if additional infrastructure needs to be built before compliance is possible.

 

Why is it important?

As part of the Resource and Waste Strategy, the UK Government has set an ambitious target to recycle 65 per cent of municipal waste by 2035. According to UK Government waste statistics, household recycling rates in England have remained around 44 to 45 per cent since 2015, falling to 43.3 per cent in 2022-23. 

Businesses also produce a significant amount of waste that needs to be addressed. UK Government waste statistics show that compared to 21.4 million tonnes of household waste generated in England in 2022, commercial and industrial waste accounted for 33.7 million tonnes of waste.

Implementing the same core set of materials for recycling across households, non-domestic premises and businesses will make recycling more straightforward and comprehensive across England for people and waste collectors. This could increase participation in recycling and the amount collected for recycling. 

Key benefits of Simpler Recycling are that it supports:

  • more consistent access to core recycling services across England
  • positive recycling behaviour changes at home and work, increasing recycling rates
  • reduced contamination produces higher quality recycled materials that create greater revenue for local councils and allow for more recycled content in products.

 

When changes will happen?

  • 31 March 2025: Businesses with 10 or more employees and relevant non-domestic premises will need to arrange for the collection of glass, metal, plastic, paper and card, and food waste. Local authorities providing business waste collections will be required to complete written assessments for co-collections, the same as for household collection.
  • 31 March 2026: Councils will be required to collect glass, metal, plastic, paper and card from all households in England, and food and garden waste except where transitional arrangements apply. Local authorities choosing to co-collect card and paper with other dry recyclables from households must have prepared their written assessment explaining why.
  • 31 March 2027: Kerbside plastic film collections will be introduced. Micro businesses with few than 10 employees must recycle the core waste streams.

 

Key considerations

Weekly food waste collections: The new duties will require new services and infrastructure contracts for some Local authorities. Food waste will have to be collected weekly, unless a transitional arrangement applies due to long-term waste disposal contracts. Defra will engage with affected local authorities. 

Co-collection of food and garden waste: According to Defra’s exemptions and statutory guidance for Simpler Recycling, local authorities can choose whether to co-collect food and garden waste without a written assessment. Factors that may influence their choice include the geographic and demographic nature of their areas and the infrastructure available. For example, for better environmental outcomes, Defra prefers for co-collected garden and food waste to be treated by anaerobic digestion (AD), but composting is still permitted. Defra will provide non-statutory guidance for local authorities co-collecting food and garden waste to support the provision of chargeable garden waste collection and free food waste collections.

Plastic film collections: Currently, plastic film can be recycled in some supermarkets. From 2027, plastic films such as soft packaging and bags will be a part of kerbside collections for all households. To support plastic film recycling, residents will need to be informed about how to correctly recycle it, including any differences in disposal for biodegradable/compostable film. In addition, WRAP’s guidance on flexible packaging shows investment will be needed in sorting and reprocessing capacity and capabilities of domestic recycling facilities.   

 

How can councils prepare?

The impact of Simpler Recycling will vary across councils depending on their current service provision. Some councils already provide separate collections for the core materials. Others need to implement new collections, or have long contracts with facilities to process mixed recycling, and could experience more challenges. 

To prepare, councils can:

  • Review current waste collection and recycling services: Councils could assess their alignment with Simpler Recycling, to understand how services will be impacted by the legislation. The review should consider the suite of upcoming policy reforms as there are interdependencies.
  • Review waste policies: Create a plan that outlines changes needed to comply with Simpler Recycling. It will be helpful to include details on food waste and plastic film collections. Changes might be necessary for infrastructure, contracts, waste storage and collection designs (frequency, vehicles and routes).
  • Consider long-term procurement risks: The deadlines for Simpler Recycling created a rush to procure vehicles, containers and infrastructure. With contracts lasting similar lengths, this cycle could repeat in seven to eight years. Local authorities could consider the length of contracts to avoid everyone going to the market at the same time and costs increasing due to heightened demand.
  • Adapt communication materials for Simpler Recycling: Local households and businesses will need to be informed of service changes and their duty of care. The Waste and Resources Action Programme (WRAP) provides a communication toolkit for household food waste collections, and Defra offers a Simpler Recycling Communications Toolkit for councils to inform business and non-domestic sites.   

 

Case study: Essex County Council’s food recycling communications

Targeted communications with households can support participation in food waste recycling so they understand how to do it and why it’s important. As detailed in the LGA case study, a waste composition analysis conducted by Essex County Council revealed that a quarter of residual rubbish thrown away was food. However, weekly food recycling collections were already offered to most households. To increase participation, Essex County Council used the WRAP best practice methodology combined with local research to design an engagement trial. 

They delivered leaflets, compostable liners, and a sticker for the wheeled general rubbish bin, rolling out county-wide and area-specific communications. To increase trust, campaign materials educated residents about what happens to food recycling in Essex, for example that recycling just six teabags could generate enough power to boil the kettle. Overall, they achieved a ten per cent increase in food tonnage recycled at kerbside and saved £206,000 from avoided disposal costs.

 

Case study: FlexCollect flexible plastic collections

FlexCollect is a three-year project trailing flexible plastic collections involving ten volunteer local authorities servicing different geographies and demographics. According to the UK Circular Plastics Network’ case studies, it is the largest trial of its kind in the UK, engaging with 200,000 households across England. Local authorities are trialling different service designs, such as bags collected co-mingled with plastics or source segregated. According to FlexCollect’s interim 2024 report, in all cases, flexible plastic packaging has been added seamlessly to existing collection services and no capacity issues in resource collection or recovery vehicles have been reported. The lessons from this trial will be used to develop best practice shared ahead of 2027 when all local authorities will provide kerbside flexible plastics collections.

The project is managed by a consortium comprising of Ecosurety, SUEZ recycling and recover UK, RECOUP and WRAP.

 

Useful links

Read Defra's policy update for Simpler Recycling (2024)

Read Defra's guidance on written assessments (2024)

Visit WRAP's webpage to support local authorities

Read WRAP's Monitoring and Evaluation Guidance (2023)

Read LGA’s Lets do business waste publication and case studies (2024) 

Read the government's guidance for Simpler recycling in the workplace (2024)

Visit WRAP's webpage for business recycling 

Download Defra's Simpler Recycling Communications Toolkit

View WRAP's household food waste collections communications guidance and templates

Extended Producer Responsibility for Packaging

What is it?

In the UK, originally there was the Producer Responsibility Obligations (Packaging Waste) Regulations 1997. They required packaging producers to take responsibility for the environmental impact of packaging waste and pay a proportion of its recycling cost. This was done by purchasing Packaging Waste Recovery Notes (PRNs) or Packaging Waste Export Recovery Notes (PERNs) from recycling companies and those exporting waste for recycling, as evidence of recycling. 

The Producer Responsibility Obligations (Packaging and Packaging Waste) Regulations 2024, known as extended producer responsibility for packaging (pEPR) expands on, and will replace, the Packaging Waste Regulations. Through recycling targets and requiring producers to pay the full, net cost of waste management, it is intended to incentivise producers to improve recyclability and reduce unnecessary packaging. 

The scheme administrator, a public body, is responsible for developing a mechanism to ensure producer fees cover local authority costs for the management of household packaging waste. The UK Government announced PackUK has been appointed as the scheme administrator across the four UK nations.

A base fee will be calculated per tonne for eight packaging materials: aluminium, fibre-based composites (for example, compostable packaging, fibre-based coffee cups), glass, paper or board, plastic, steel and wood. The fee should cover the collecting, sorting, treating and recycling costs, as well as communication activities to increase household participation in recycling. 

From 2026, eco-modulated fees will be introduced that increase the cost for hard-to-recycle materials and packaging with greater environmental impacts. A key aim of eco-modulation is to incentivise producers to improve packaging design, to align with existing recycling facilities and capacity. If producers fail to do so, the additional funds will be made available to help local authorities find responsible solutions for the undesirable materials, for example investments in advanced recycling facilities.

Defra is developing an EPR Recyclability Assessment Methodology (RAM) to determine which materials will have higher fees. According to Valpak, Defra has released a draft shortlist of materials that could face a higher eco-modulation fee, including plastics containing carbon black, Polyvinyl Chloride (PVC), compostable and bio-degradable plastics, some polystyrene, coated papers and plastic films.

 

Why is it important?

LGA analysis shows 5.6 million tonnes of packaging waste were binned by households in 2023, with 19 per cent still going into residual waste. Historically, local authorities and households have covered much of the cost of end-of-life waste management. However, according to the polluter pays principle those producing negative environmental impacts should be responsible for the cost of dealing with them. EPR schemes apply this by ensuring producers pay for the responsible management of their products once they become waste.

Key benefits of pEPR are that:

  • The cost of managing packaging waste is placed on those most able to reduce it.
  • The producer covers the cost of dealing with household packaging waste, supporting the polluter pays principle.
  • It incentivises more sustainable packaging design and a reduction in unnecessary packaging.

 

When will changes happen?

  • 2023: Producers started reporting data on packaging placed on market.
  • October 2025: First payment of producer fees.
  • November 2025: Local authorities will receive EPR funds.
  • 2026: Producer fees will be eco-modulated to increase the cost of hard-to-recycle packaging from year two of pEPR. 

Introduction of binary recycling labels of “recycle” or “do not recycle” were planned to be introduced in April 2027. However, at the end of 2024, Defra announced it was postponing this requirement to be able to align across the UK and with forthcoming EU packaging legislation. 

 

Key considerations

Funds are not ringfenced to waste and recycling services: The revenue from pEPR is expected to generate more than £1 billion annually to support local authority collection and recycling services.  Defra has developed a ‘local authority Packaging Cost and Performance’ (LAPCAP) model to calculate how the fees are channelled to local authorities. Funds will not be ringfenced to investment in waste collection and recycling services. 

Councils have been given provisional estimates of their payment and encouraged to provide feedback. Any changes will be communicated ahead of the initial payment in November 2025. The payment system will continuously be refined in future years as data improves.

EPR funding will be treated as additional funding in 2025/26 and separate to the local government finance settlement. The government’s treatment of EPR funding in future years is unclear. 

Efficient and effective service requirements: Producers will be expected to achieve recovery and recycling targets. This could bring about a new relationship with local authorities, who will play a core role in supporting this. Defra will determine EPR payments based on modelling of ‘efficient and effective waste and recycling services’, which they are currently still defining. In Defra’s methodology, details of how this will be assessed are currently unclear, but modelling of efficient disposal costs could lead to an improvement process and ultimately to a deduction from the EPR payment. 

 

How can councils prepare?

While the long-term future of EPR funding is unclear, it will be additional to other sources of local government finance in the first year of the scheme. Councillors can take proactive steps to prepare their councils, residents, and local businesses.

  • Strengthen data collection and reporting to ensure EPR covers the full net cost of waste management: EPR relies on accurate waste data to calculate payments. Through internal data collection and reporting, councils can better understand the volume and types of packaging they manage, identifying true waste management costs and opportunities to improve services. Data also allows the impact of any service changes to be assessed, which is vital for delivering service improvements.
  • Monitor the evolving definitions and models for calculating fees in the new system: How Defra and the scheme administrator calculate producer fees, modulated fees and payment distribution to local authorities will impact the funds local authorities are awarded. It is unclear at this stage whether a local authority will be able to submit local information alongside an appeal if the payment doesn’t cover the total costs.
  • Reduce residual waste collections: Local authorities could consider how to create more efficient services that lead to better recycling. One way that many councils have increased recycling is by reducing the frequency of residual bin collections. This also reduces pressure on vehicles and crews. To succeed, this change typically requires a full service review and a communication campaign, to help residents to understand their responsibility to reduce waste and recycle more.
  • Engage communities to improve participation in recycling services: The waste and recycling reforms could serve as a moment of change to promote engagement with recycling. Packaging EPR payments could be used for communications to ensure communities understand why service changes are important and what they should be doing. Alongside national communication campaigns, local authorities could develop targeted engagement strategies based on the unique challenges their communities have. To better align with the waste hierarchy, communications could be designed to include local opportunities for reuse and repair.

Case study: Plymouth City Council’s contamination monitoring

Waste data and community engagement can be used by local authorities to improve waste and recycling services, which could be funded through EPR payments. WRAP’s monitoring and evaluation guidance contains some case studies demonstrating this. Plymouth City Council recorded a rise in household residual waste collected from kerbside in 2020-21, as well as a drop in recycling and an increase in overflowing bins and contamination. To understand why the city’s recycling rate was low and what could be done to improve it, they conducted research using data from waste composition studies and engagement activities with residents and crew observations. 

Using both quantitative and qualitative research developed a more complete picture, showing where residents’ experiences matched the waste data (e.g. increase in black bags) and where it didn’t (e.g. residents still reported motivation to recycle). Potential issues were found related to recycling capacity not being great enough and communication material not being visible to residents. These insights were used by Plymouth City Council to develop an evidence-based strategy to improve recycling rates, including creating targeted communications and going back to basics with WRAP’s yes/no recycling materials.

Useful links

View WRAP's Let’s Get it Right campaign assets

Read the UK joint policy statement of pEPR (2025)

Read government guidance on who is affected by pEPR and what to do (2024)

Read the methodology and procedure for calculating estimated pEPR payments for 2025-26

 

Deposit Return Scheme

What is it?

The Deposit Return Scheme (DRS) is a key policy initiative designed to improve recycling rates for single-use drinks containers, including polyethylene terephthalate (PET) plastic bottles, steel cans, and aluminium cans. The size of the containers in scope will be 150ml to three litres. 

The scheme introduces a refundable deposit on these containers, incentivising consumers to return them for recycling. DRS regulations will require supermarkets and convenience stores to act and register as return points to take back DRS containers. Defra has confirmed other businesses and online retailers that sell in-scope items will not be required to become a return point but can apply to host a voluntary return point.

A logo and identification marker, such as a barcode, will be used on all DRS containers to ensure that containers are accepted by reverse vending machines (RVM) or at a manual return point. There has been consultation on whether to introduce a digital DRS system, allowing users to reclaim their deposit digitally using an app when presenting their materials at the kerbside. However, in England it is likely it will initially only be a DRS introduced. 

Producers of DRS containers will pay an upfront annual registration payment to cover the costs of operating and regulating the DRS. As a result, DRS containers will be excluded from pEPR payments. In addition, revenue from the sale of collected materials and unredeemed deposits will support cost recovery for operating the DRS.

The DRS systems will be interoperable across the UK, allowing people to return bottles and cans across borders without confusion. Aligning regulations are being formulated across England, Wales, and Northern Ireland, and the Scotland Government has committed to  amending draft regulations to ensure compatibility.

 

Why is it important? 

Over 31 billion single-use drinks containers are sold annually in the UK, yet many containers end up as litter, incinerated, or in landfill, representing a missed opportunity to recover valuable resources. Meanwhile, many UK packaging producers struggle to access enough food-grade recycled materials. The UK Government, along with devolved administrations, aims for a collection rate of 90 per cent by the third year.

Key benefits of DRS are that it:

  • Provides a clear financial incentive for returning items for recycling, allowing residents to reclaim deposits and benefit directly from returning containers.
  • Strengthens the circular economy by supporting high quality and closed loop recycling systems, such as bottle to bottle recycling.
  • Supports local businesses by increasing footfall at return points, such as reverse vending machines.

 

When will changes happen?

Key dates for the DRS rollout are as follows:

  • January 2025: Regulations come into force.
  • April 2025: Deposit Management Organisations (DMOs) appointed and begins the development of an operational blueprint.
  • Spring 2026 – Autumn 2027: Infrastructure rollout, producer preparation and testing.
  • October 2027: DRS launches across the UK – this is when the significant material changes will be seen by councils.

 

Key considerations

Waste collection impact: DRS could change recycling habits by incentivising individuals to take containers to return points, removing these materials from kerbside collections. The reduction in kerbside collections could affect local authority infrastructure needs and collection design. It may be hard to predict how fast households will adapt their recycling behaviours, as this is likely to be influenced by national and local communication campaigns. However, local authorities could model different scenarios to understand the range of likely impacts. If a digital DRS service is introduced in addition to in-store take-back, this could limit reductions to kerbside waste collections.

Impact on budgets: Materials captured through the DRS will no longer fall under local authority ownership. Local authorities will lose revenue from high-value materials such as PET bottles and aluminium cans. Further, as DRS containers are excluded from EPR payments, the waste management costs of DRS containers collected through kerbside collections by local authorities will not be covered. Local authorities may have options to reclaim unclaimed deposits from the DMO on in-scope materials collected at the kerbside. However, it is unclear how this will work in practice.

How can local authorities prepare?

  • Quantify impacts on councils: Assess the quantities of materials likely to be diverted to DRS and the impacts of this on local authority budgets and services. These include impacts on revenue from reprocessed material sales, and on collection frequencies and associated costs.
  • Review contracts: Assess existing waste management contracts to identify and address risks related to the scheme’s rollout, which could include ensuring that a minimum tonnage has not been guaranteed through the contract. Councillors could encourage flexible terms or extensions to mitigate uncertainties during the implementation phase.
  • Support local businesses: Guide local businesses, especially small retailers, on setting up return points and potential exemptions, registration with the DMO, complying with labelling requirements, and understanding the deposit system.

Case study: Germany’s long-established DRS

Germany introduced a DRS in early 2003. Research indicates it is the world’s highest-performing system, achieving a 98 per cent return rate with eligible drink containers. Germany has one of the highest container deposit return values at €0.25 (£0.21). The deposit is applied to in-scope refillable and single-use beverage containers. They have a convenient network of return locations, at RVMs and stores that sell in-scope containers.

Case study: Ireland’s new DRS

The Republic of Ireland introduced a DRS in February 2024. The Government of Ireland announced after its first year, 84 per cent of the Irish public had participated in the scheme, with over 980 million containers returned. This resulted in a near 50 per cent reduction in bottles and cans being littered. In Ireland, household waste collections are predominantly carried out by private companies under a local authority permitting system. Many items are still placed in kerbside collections, but waste management companies have warned loss in revenue could increase the cost of bin collections.

 

Useful links

Read the joint policy statement on DRS by the previous UK Government and the devolved governments (2024)

Inclusion of energy from waste in the UK Emissions Trading Scheme

What is it?

The UK Emissions Trading Scheme (ETS) incentivises businesses to reduce carbon emissions in line with net-zero targets. Launched on 1 January 2021, it replaced the UK’s participation in the EU ETS. Initially, the scheme applied to high-emitting sectors such as power generation, energy-intensive industries and aviation.

The ETS prices carbon by issuing carbon allowances (or credits) that let businesses emit carbon dioxide. A cap limits the number of carbon allowances available. Over time, the allowances businesses receive will decrease. Businesses can trade excess allowances from carbon reduction or offsetting activities. 

In 2023, the UK Government confirmed that energy from waste (EfW) would be included in the UK ETS from 2028. The cost of carbon emissions will fall on EfW operators, who may then pass on the costs to their customers, including local authorities. 

Carbon allowances will only be necessary for fossil-based emissions, creating an incentive to divert plastic from incineration. Biogenic carbon emissions, such as from food or bio-based products, are not included. Facilities can cut carbon emissions by investing in carbon capture, usage and storage. However, research by Zero Waste Europe suggests its viability for EfW remains uncertain, both technologically and economically.

 

Why is it important?

In England, waste sent to incineration has increased. UK Government data on the management of local authority waste shows in 2022-23, 49.1 per cent of waste was sent to incineration, while just 40.7 per cent was sent to recycling. For a circular economy, materials which could be reused or recycled should not be sent to incineration. Raising the cost of burning plastic aims to incentivise greater circularity for plastics and reduce carbon emissions. 

Key benefits of the inclusion of EfW in the UK ETS are that it supports:

  • More recyclable or reusable materials diverted from incineration to provide continued value in the circular economy.
  • A reduction of carbon emissions from EfW facilities. 

 

When will changes happen?

A two-year phase-in period will happen from 2026 to 2028.

  • August 2024: Consultation concluded.
  • January 2026: Measurement, reporting and verification of carbon emissions from EfW introduced (mandatory or voluntary status to be confirmed).
  • December 2026: The evaluation of the long-term impacts of the inclusion of EfW in the UK ETS will finish.
  • January 2028: EfW will be included in the UK ETS.

 

Key considerations

Upstream changes are needed to reduce emissions: Alongside improving recycling collections, products need to be designed to remove fossil material in the first place and align with recycling capabilities. A lot of waste with a high carbon content doesn’t have a decarbonisation pathway, for example persistent organic pollutants (POPs) waste and absorbent hygiene products. 

Impacts on contracts: Often local authorities might have fixed-cost, long-term contracts with EfW facilities, sometimes with calorific value clauses. Local authorities need to understand how the removal of fossil ‘fuel’ will impact this. An added risk is that reductions by local authorities might not lead to a lower gate fee, as the fossil emissions and prices will also be influenced by other EfW customers, such as local industries. Additional waste composition analysis to prove reductions in plastics sent to incineration may incur further costs.

Financial risk: EfW operators can pass costs from the UK ETS onto local authority customers through the gate fees. The volatility of these costs, as gate fees can be adjusted fortnightly, is a risk for local authorities as it will be difficult to forecast in budgets. Research by LGA suggests the regulation could lead to an additional annual financial burden between £367 to £747 million. The large cost burden could negatively impact council services and reduce funds available for waste collection and recycling services. 

This could be mitigated to some extent before the inclusion of EfW in the UK ETS takes place, for example:

  • Policies aimed at more consistent and comprehensive recycling collections, including DRS and plastic film collection, could remove plastics from residual waste.
  • New funds flowing to councils from pEPR could be used to improve collections and recycling facilities, and could also be used for local reuse schemes.

 

How can councils prepare?

  • Adjust collections service design for more ambitious waste reduction: Less residual waste means less waste sent to incineration, reducing disposal costs. Reducing the frequency of residual waste collections has been shown to incentivise residents to recycle more. The collection and diversion of food waste, though not fossil-based and therefore reducing ETS costs, can rapidly reduce the tonnage sent for incineration, bringing down overall disposal costs.
  • Introduce wider waste reduction policies: These can include education programmes, plastic-free initiatives, and local reuse schemes to mitigate rising waste costs while improving sustainability
  • Long-term planning and investment to increase recycling: Councillors can evaluate their EfW disposal budget to quantify potential savings from reducing EfW usage. This analysis can help prioritise waste reduction and recycling investments, ensuring waste and recycling are prominent in risk registers. Financial officers can be involved to integrate this into budgeting and risk management. More investment in targeted communications to improve recycling and reuse could reduce long term EfW costs.
  • Consider EfW contracts and recycling infrastructure: As EfW contracts expire, there is an opportunity to reflect on whether contracts align with waste reduction goals and financial sustainability. Longer-term agreements could lead to higher costs as EfW becomes more expensive. Exploring alternatives before renewal could provide greater flexibility and cost savings. When EfW contracts are necessary, it could also be worth assessing the EfW facilities heat offtake efficiency – its ability to convert waste heat into usable thermal energy – as higher efficiency means a lower carbon impact.
  • Understand the composition of waste sent to EfW: The ETS scheme applies only to fossil-based carbon. It’s important for local authorities to understand how much of the waste they send to EfW contains fossil-based carbon. A waste composition analysis can determine this. Additionally, existing carbon modelling for materials could be used to model the cost of various scenarios based on current levels of plastic sent to incineration and other scenarios where levels of plastic have been reduced. 

 

Case study: Bristol City Council Zero Waste

Reducing residual waste is the most effective and guaranteed way to avoid cost burdens from incineration. In 2016, Bristol City Council set a target to produce the lowest amount of residual household waste per person per year in UK cities, aiming for each person to produce less than 150kg per year by 2025. UK Government waste data shows that through these waste reduction efforts, Bristol has become the leading core city in England for recycling. Further, Bristol Waste report that the city’s residual waste has fallen by 10kg per household per year since 2020-2021.

Bristol Waste encourages households to separate recycling to improve recycling quality and has increased recycling collections to weekly. To empower households to know how they can reduce waste, Bristol Waste is running a communication campaign ‘Waste Nothing Challenge’ advising households how to introduce small everyday habits to change behaviours. During the pilot year, when 50 households took part, they produced 78 per cent less general waste than the average Bristol household, with 50 per cent less waste and recycling combined. Now the challenge is available for everyone in Bristol to join.

Case study: West Midlands Combined Authority Circular Economy Routemap

In 2021, West Midlands Combined Authority published the West Midlands Circular Economy Routemap. It covered encouraging repair, reuse and regeneration of resources and materials in households. 

West Midlands Combined Authority funded five circular economy projects through its Community Environment Fund in Sandwell, Coventry, Wolverhampton and Birmingham. Projects included repair and reuse hubs, such as Carriers of Hope which provided hundreds of people experiencing poverty with essential items such as baby equipment and furniture that would otherwise been disposed of. 

 

Summary

Over the coming years, the waste and recycling reforms will increase momentum towards England’s recycling and waste reduction targets. The timelines for policies being introduced have been subject to repeated changes. The current plans are:

  • January 2025: DRS regulation comes into force.
  • March 2025: Simpler Recycling requirements introduced for businesses and relevant non-domestic premises.
  • April 2025: DRS DMO appointed and starts to develop operational blueprint.
  • November 2025: First round of EPR funds received by local authorities.
  • 2026: EPR producer fees become eco-modulated.
  • 2026: DRS infrastructure rolled out.
  • March 2026: Simpler Recycling requirements introduced for households (except film).
  • March 2027: Simpler Recycling kerbside plastic film collections requirements introduced.
  • October 2027: DRS launches across the UK.
  • January 2028: EfW is included in the UK ETS.

Together, they are expected to achieve:

  • an increase in food waste recycled
  • an increase in packaging materials recycled
  • a reduction in unnecessary packaging produced
  • a reduction in residual waste generated
  • a reduction in littering
  • a reduction in carbon emissions.

It will be useful for local authorities to be mindful of how the policies can work together when they develop future waste and recycling strategies. For example, funds from pEPR will be critical to support recycling collections to comply with Simpler Recycling, raise recycling rates and decrease residual waste (and EfW costs). Importantly, households need to understand their role in managing waste. Again, funds from pEPR could be used to improve household communications, driving up engagement across kerbside collection services and DRS return points. 

Having more granular waste data will enhance local authorities’ understanding of material streams and how policies will impact them. Data is needed to evidence waste management costs and develop evidence-based strategies to improve services. Understanding local challenges through waste data can be used to develop more targeted interventions, including for local areas or materials with lower recycling rates and higher contamination. 

As policies become more complicated with targeted impacts on material streams, more nuanced data and performance metrics, beyond tonnage collected, will be useful to capture the full picture of service performance. For example, the tonnage collected for recycling could be reduced by the light weighting of packaging materials from producers wanting to reduce fees, or the removal of materials from kerbside recycling collections due to DRS, when overall recycling is improving. Information on reduced residual waste, contamination rates or higher quality of recycling, for example, could be useful to evidence service improvements. 

The reforms will have costs related to service changes, collection and disposal costs, recycling revenue and infrastructure investment. Local authorities could save money through reduced Landfill Tax costs and gain new revenues from improved quality of recycled materials, pEPR payments and garden waste collection charges. However, there are financial risks from potential lost revenue due to DRS and volatile gate fees for EfW. The most reliable strategy to reduce financial risks is to support and incentivise households and businesses to reduce waste produced. 

 

Challenge

Waste data and performance

Does your council have data on the quantities of packaging waste it collects in both recycling and residual waste streams, so it can ensure the full net cost of waste management is covered by pEPR?

Does your council have data on the quantity of DRS materials in the recycling stream, so it can prepare for potential revenue loss and plan any service adjustments?

Does your council know how much of the waste it sends to incineration contains fossil-based carbon?

Long-term planning

Has your council measured its current level of efficiency and effectiveness of its existing waste service as it operated or identified future improvements that could be delivered in a waste management plan?

How does your council measure effectiveness? (For example, recycling tonnage collected, material recovery rates, or contamination levels).

Does your council have a waste reduction strategy and related initiatives, for example to cut food waste, or to encourage reuse and sharing within communities?

Revenue and costs

Has your council developed a clear and long-term plan for how to cover service transition costs?

Has your council conducted scenario analysis to understand the potential impact of the inclusion of EfW in ETS on disposal costs?

Is your financial team aware of the risks of EfW in the UK ETS?

Has your council conducted a scenario analysis to understand the potential impact of the DRS on recycling revenue?

Does your council have plans to invest in recycling infrastructure or contracts needed to process changes in material streams collected?

Collections and infrastructure

Have you looked at the impact of separate collection of paper and card? Do you need to consider a technically, environmentally and economically practicable (TEEP) assessment?

Is your local authority ready to provide weekly food collections for the deadline?

Is your local authority prepared for procurement for Simpler Recycling, including considerations of potential future bottlenecks in the market?

Has your council considered how reforms could impact disposal and recycling contracts and developed long-term plans aligning with council waste reduction and recycling aims? 

Communication

Do residents understand why it is important to reduce residual waste, and do they support actions your local authority is taking to achieve this?

Do residents know that food waste produces methane in landfill, which is a much more potent greenhouse gas than carbon dioxide?

Are residents aware of how they can reuse more and what local services can help with this? (For example, repair cafés, tool libraries and reuse hubs.)

Are communications ready to support the recycling of food waste in 2026 and plastic film in 2027?

Do local businesses understand their new responsibilities under Simpler Recycling or opportunities to support recycling through DRS?