What does the upcoming carbon tax mean for the Energy from Waste sector?
Marchwood
Environment
There are 53 fully operational Energy from Waste plants in the UK as of 2022. These plants convert domestic residual waste into energy, harnessing approximately 2.5% of the UK’s total energy generation every year. Even though this process emits less carbon dioxide into our atmosphere than other non-renewable energy generation sources, as the Energy from Waste sector grows, emissions must be monitored to help safeguard the planet and public health.
Have you heard of carbon-14 testing? Currently a hot topic in the waste industry, it is the most accurate way of measuring biogenic carbon, which is carbon that is released as a result of burning organic material, such as biomass and its derivatives. As Energy from Waste plants will be taxed on emissions of biogenic carbon, carbon-14 testing is set to allow EfW operators to offset the amount of carbon tax they pay by determining the split ratio of biogenic carbon vs fossil carbon being released into the atmosphere.
As a UK leader in energy from waste and waste management analysis, Marchwood is at the forefront of conversations around carbon-14. Read on to find out more about why Energy from Waste plants may soon be charged a carbon tax, the issues the tax poses for the sector, and how Marchwood can help.
Why will Energy from Waste plants be charged a carbon tax?
When the UK exited the EU, we started developing our own ETS – Emissions Trading Scheme – to track carbon emissions, attribute them to various industries and processes that are contributing to CO2 emissions, and implement taxes accordingly.
The first progress report was issued in 2019. It showed that Energy from Waste plants emitted 6.2 metric tonnes of carbon dioxide equivalent (MTCO2e), contributing to just 1% of total UK CO2 emissions, compared with around 14% from landfill. However, as the demand for renewable energy and Energy from Waste grows, these emissions are set to rise.
So, in 2021, the Committee for Climate Change progress report recommended that a carbon tax be imposed on the Energy from Waste sector as part of the UK Emissions Trading Scheme. The tax will be in place from 2028 and aims to curb rising emissions of anthropogenically-derived carbon dioxide.
What issues does this tax pose and what can we do about it?
When the carbon tax goes ahead in 2028, the UK Energy from Waste industry will be faced with a £875 million problem. This is how much it is expected to cost the industry, and the financial impact will likely be passed down from EfW operators to smaller waste companies, who will need to charge more for collections to maintain profitability. This could eventually impact the general public and our cost of living.
What can we do about this?
Many waste carriers produce RDF (Refused Derived Fuel) and SRF (Solid Recovered Fuel), which they can bale and export overseas as waste-derived fuel for incineration. This is often dependent on the expense of this route compared to sending to UK facilities. However, as many end-users or off-takers of RDF in the UK have begun to implement zero-to-landfill policies, they now look to the very real possibility of paying increasing carbon taxes as the amount of RDF they divert from landfill and burn at energy recovery facilities increases. In other words, the money they no longer need to pay for CO2 emissions from landfill will now start to be rebilled to them in the form of the carbon tax, with the underlying assumption that the carbon split on burned material is largely anthropogenic—i.e., that it originated from human activity.
However, not all carbon is anthropogenic. A portion of waste streams going into energy recovery facilities will consist of biomass. Burning biomass only emits carbon that is part of the biogenic carbon cycle. This type of combustion simply returns the carbon to the atmosphere that was absorbed and stored by biomass during photosynthesis.
The UK government is discussing a viable and beneficial solution for EfW businesses. If they can routinely monitor the carbon being emitted from incinerators at the stack, to identify whether they are anthropogenic or biogenic (through carbon-14 testing), they will offset some costs. If 50% of carbon emissions are found to be biogenic, then the taxes can be offset by 50%, meaning that Energy from Waste operators can save money to invest in lab testing and carbon capture.
Whilst this will be a huge win for the industry, as companies will be able to grow from saving money and proving the biogenic content of their waste, this analysis is not yet available in the UK. However, there are several methods of testing available in line with solid recovered fuels (SRF) methods of the determination of biomass that will help customers within the RDF industry put contingency in place and start collecting data on the biogenic content of the front-end material, ready to help offset costs.
Analysis methods: how Marchwood can help
Manual sorting of waste into compositional sub-fractions allows Marchwood to build a profile of the material percentages that comprise a sample. One way of looking at the anthropogenic vs biogenic split is by comparing the sub-fractions (i.e. PVC, paper/card, polystyrene, and dense plastics) to known values of biogenic content. This tells customers whether their suppliers are removing all the organic content and leaving them to foot the bill for all the anthropogenic carbon they are burning. We offer this analysis in-house and can provide express turnaround of as little as 3 days, but the composition of RDF waste is ever-changing, and cannot be compared to historic values.
The second method proposed is selective dissolution. Here we filter the sample with sulphuric acid and peroxide to separate the biomass from the rest of the sample. This can also be done in-house at Marchwood, but the method standard states that some biogenic content can still be dissolved, whilst non-biogenic material like oils and plastics can withstand dissolution.
The most accurate way to measure biogenic carbon is through radiocarbon dating. Our partner lab offers this by bomb calorimetry combustion of RDF, conversion to benzene through synthesis, and carbon counting through spectrophotometry. This allows the team to calculate the percentage fraction of biomass or biogenic carbon. Our partner lab has sufficient capacity to accept an increased volume of waste samples, and have 5 spectrophotometers in place for contingency, but the turnaround time is 6 weeks as standard.
This will not cause too much of an issue in the short term, as the analysis is carried out purely for data collection and monitoring. As more operators look to monitor waste derived fuels at the front end for carbon-14, coupled with their UK ETS obligation to monitor carbon-14 at the stack emission, capacity and turnaround time in the commercial lab industry will need to be reviewed prior to the tax implementation in 2028.
It is indicated Energy from Waste operators will be required to report their results within 4-6 weeks of their sampling date. So, if labs offer a 6 week turnaround, this doesn’t give operators a lot of breathing room to report back and claim their tax rebate. This could result in a situation where operators will have to pay the tax despite having invested in testing. This service will need to be quicker to satisfy the needs of the market and to ensure operators have time to provide the data collected to the relevant authority.
These are front-end solutions that can help Energy from Waste incinerators offset their costs. However, conversations are growing all the time, and many believe that the long-term solution lies with monitoring CO2 emissions at the back end of the process.
I, Marchwood’s Business Development Manager, Ben Rowe, spoke about carbon-14, the tax, and how we can help the Energy from Waste industry, at the recent RDF conference. Marchwood and our parent company, EBI, have been doing a lot of innovative development work regarding biogenic and non-biogenic content. Our position as a market leader in Energy from Waste means that we have the expert capability to help our customers as this tax comes into place, so watch this space for updates.
Marchwood is the UK’s leading RDF/SRF, environmental, and occupational hygiene analysis laboratory. For more information on our services, contact us.