Environmental Economics Incentives (environmental taxation)

Position Statement

Environmental Economics Incentives (environmental taxation)

CIWM view

CIWM supports the use of environmental economic incentives that influence environmental behaviour, provided that they are well thought out and provided that their overall burden to the taxpayer is not overly burdensome. However, when considering new environmental economic incentives the government should ensure that the overall competitiveness of the UK is protected. 

CIWM supports the current rises (escalators) in landfill and plastics packaging taxation, and supports the expansion of the UK ETS to the thermal treatment of waste. CIWM encourages and supports the UK government to continue in its efforts in this area, both nationally and internationally. The UK government has been in the vanguard of devising inventive environmental economic incentives to counter waste production and climate change, such as packaging and other producer responsibility initiatives for many years and we would like to see other more inventive options explored in the future (e.g. modulated fees or bonus-malus).

CIWM would also like to see more hypothecation of the tax revenues raised by HMT from direct environmental economic incentives, and in particular more of the monies raised from landfill tax should be redirected into fighting waste crime. CIWM also believes that more of the revenues raised by environmental economic incentives could be directed towards UK based R&D to encourage and support a more circular economy, and in particular directing much needed funding to those technologies that show promise in diverting waste away from landfill and incineration, and into more beneficial uses.

What is it?

An environmental economic incentive is a form of environmental tax or levy (sometimes referred to as ecotax or green tax). It is levied on activities which are considered to be harmful to the environment, by influencing personal and corporate behaviour through fiscal incentives in order to promote environmentally friendly activities, complementing or averting the need for regulatory (command and control) approaches. 

Environmental economic incentives are often used to rectify market failures, which exist when the cost of the environmental damage is not reflected in the costs of goods and/ or services provided (e.g. the UK plastic packaging tax); where environmental improvements can only be achieved by society acting collectively, or where there is insufficient information for government to have a clear understanding on how best to reduce environmental costs. Often, an environmental economic incentive policy may attempt to maintain overall tax revenue by proportionately reducing other taxes, such as labour or renewable resources. 

Well-designed environmental economic incentives can generally deliver environmental outcomes at lower cost to the economy as a whole, and provide greater reward for innovation to improve environmental performance than regulation. In particular they can often be more practical in promoting good environmental performance from small businesses that are more difficult and costly to reach using traditional regulation.

The issues

It is argued by some that environmental economic incentives cause market distortions, and by others that their greatest impact is often on the poorest in our society. If they are to be used, should the level of the incentive be based on an estimate of the economic costs of the environmental impacts it is designed to lessen (internalising the externalities) or be set at the rate necessary to achieve a predetermined environmental objective. There are also questions about what to do with the revenue raised from environmental economic incentive, should it be put aside for environmental issues (e.g. tax hypothecation), such as fighting waste crime or used to reduce other forms of taxation (e.g. employers NIC). 

The application of an environmental economic incentives also raises questions, they can be levied directly on the cause of the environmental damage in such a way that a reduction in the cause reduces the tax liability. This is arguably a weakness of the landfill tax, as in most cases the primary waste producer does not pay directly for disposal, as it is hidden as part of a combined collection & disposal cost or council tax.

Finally effective economic environmental incentives have to provide a level of medium to long-term stability in the market to allow for the development of appropriate systems and infrastructure.

The background

Economic environmental incentives represent a market-based, rather than a regulatory response to an environmental issue or problem, that fits with the ‘polluter pays’ principle. They can take various forms ranging from taxes to tradable allowances. The UK government have been very active in this area since the mid-1990s with the introduction of economic environmental incentives in the field of waste management that include, the landfill tax, plastic packaging tax, the landfill allowance trading schemes and producer responsibility schemes for specific materials, such as packaging, batteries, vehicles and electronics. In the wider environmental context the government have also introduced several other environmental economic incentives, including the fuel duty, the climate change levy, emissions trading, contracts for difference, the renewables obligation scheme, carrier bag tax and the aggregates levy.

Economic environmental incentives are not solely limited to the UK, there has been a gradual rise in the use of such instruments throughout the world, and they are now quite commonplace, especially in Europe. Where economic environmental incentives have been introduced, even quite small changes in price/ cost can send strong signals as to the desired behaviour. 

The Organisation for Economic Co-operation and Development (OECD) has published several reports, which provide ample evidence that environmentally related taxes and incentives are often more effective policy instruments to reduce pollution and waste, and create incentives for product shifts and resource conservation, than regulation.   

In the UK the two best known waste related environmental economic incentives are:

Landfill Tax (LFT) – Introduced in 1996 the LFT has been the key fiscal instrument in the diversion of waste away from landfill and has enabled (alongside the Landfill Allowance Trading Scheme – LATS) the UK to meet the EU landfill directive biodegradable municipal waste reduction targets. 

LFT was devolved firstly to Scotland in 2015 and then to Wales in 2018, and currently the tax rates are the same, although there are subtle differences as to what qualifies (or does not qualify) for the tax.

There are two rates of LFT:

• The active rate of tax for the financial year 2023/24 is currently £102.10/ tonne

• The inactive rate of tax for the financial year 2023/24 is currently £3.25/ tonne

Current HMT data indicates that whilst tonnages of active rated waste have fallen considerably since 2011, there has not been a corresponding fall in the amounts of inactive waste landfilled. This is perhaps entirely predictable, because the inactive rate of tax has only increased by £1.25/ tonne since the tax was introduced in 1996, whereas the increase in in the active rate over the same period has been £95.10/ tonne. 

For more information about the LFT in each of the nations of the UK please refer to:

• England and NI at: Excise Notice LFT1: a general guide to Landfill Tax - GOV.UK 

• Scotland at: Scottish Landfill Tax - Taxes - GOV.SCOT 

• Wales at: Landfill Disposals Tax | GOV.WALES
  
  

In 2021 the government in England held a call for evidence (CfE) on the LFT to ensure that the tax continues to support the government’s environmental objectives. The outcome of the CfE was published in March 2023, in which the government believed that ‘there is scope for much of the material currently eligible for the lower rate of landfill tax to move up the waste hierarchy and that the current rate of tax charged on this material does not provide sufficient incentive in many cases’.

Plastics Packaging Tax (PPT) – Introduced in April 2022 as part of the government’s Resources and Waste Strategy as a measure to address a market failure in recycled plastic demand. The policy’s aim is to stimulate the demand for recycled plastic by introducing a tax on plastic packaging with less than 30% recycled plastic content. The PPT is levied on all plastic (including biodegradable, compositable and oxo-degradable plastics) packaging components that contain less than 30% recycled content, although there are exemptions and exclusions. Originally the PPT was levied at £200/tonne tax, increased in April 2023 to £210.82/tonne, with a further increase to £217.85/tonne announced for April 2024. The tax is currently also the subject of a policy evaluation plan review.

More information about the PPT can be found at: Plastic Packaging Tax - GOV.UK

Examples of other UK environmental economic instruments are:

UK Emissions Trading Scheme (UK-ETS) – The UK-ETS replaced the UK’s participation in the EU-ETS on 1 January 2021. It works on the ‘cap and trade’ principle, where a cap is set on the total amount of certain greenhouse gases that can be emitted by sectors covered by the scheme. Within this cap, participants receive free allowances and/ or buy emission allowances at auction or on the secondary market, which they can trade with other participants as needed. Each year, ‘operators’ covered by the scheme must surrender allowances to cover their reportable emissions. The cap is reduced over time, so that total emissions must fall. The UK-ETS does not currently apply to waste installations. In response to the 2023 call for evidence on the UK-ETS the government have said that waste incineration will be included in the UK-ETS from 2028, and that there will a consultation on the details later in 2023. More information can be found at: Participating in the UK ETS - GOV.UK

Producer Responsibility (PR) – There are four such schemes currently in operation in the UK, waste electronic and electrical equipment (WEEE), batteries, end of life vehicles (ELV) and of course packaging, which is now a form of extended producer responsibility (p-EPR). The common principle is that the producer (e.g. manufacture or importer) pays for the full life cost of placing these products on the market, including those costs associated with end-of-life. All four schemes have some things in common: producers placing qualifying products on the UK market have to register with a UK regulator (in some cases this can be done through a compliance scheme) and pay a registration fee; collect and report data to the regulator annually (e.g. how much is placed on the market, how much is recovered) and design products that can easily be recycled (or reused). More information can be found at: Producer responsibility regulations - GOV.UK

Renewables Obligation (RO) – This scheme was designed to encourage generation of electricity from eligible renewable sources in the UK and came into effect in 2002 in GB and 2005 in NI, but the scheme closed for new generation capacity in 2017. The RO places an annual obligation on electricity suppliers to present to Ofgem a specified number of Renewables Obligation Certificates (ROCs) per megawatt hour of electricity supplied to their customers during each obligation period (1 April – 31 March). Suppliers can meet their annual obligation by presenting ROCs, making a payment into a buy-out fund or a combination of the two. The main beneficiary of the RO scheme in the waste sector was energy generation from landfill gas, but this support will come to an end in 2027. The loss of this support could lead to a number of undesirable outcomes, including an increase in methane emissions and site abandonments. More information can be found at: Renewables Obligation (RO) | Ofgem

Other examples of economic environmental incentives include the Climate Change Levy, Fuel Duty, Congestion Charging, Green Gas Levy and Emissions Zones. A future environmental economic incentive in the shape of deposit return schemes will be introduced from October 2025.

CIWM Position Statements represent the Institution’s views at a particular point in time.  They remain under constant review, in the light of new experience and research.

Deposit Return Scheme for drinks containers

Position Statement

Deposit Return Scheme (DRS) for drinks containers

CIWM view

The CIWM position on Deposit Return Schemes for drinks containers across the UK nations is that whilst globally they have shown to reduce litter and improve the quality of recycling, the implementation at the same time as consistency reforms in England and Extended Producer Responsibility for packaging (p-EPR) could mean DRS may ultimately be unnecessary.

Of the proposed measures in the triumvirate of ‘collection and packaging reforms’ from the government’s Resources and Waste strategy, CIWM believes that p-EPR and consistency of collections in England will make a greater contribution to improving recycling and achieving a circular economy than DRS, and DRS should therefore wait until both of these have been fully implemented, and their impacts assessed.

If and when DRS is introduced, CIWM believes the scope should be for an ‘on-the-go’ scheme (drinks containers under 750ml in size), as opposed to an all-in-scheme (drinks containers up to 3L in size). This would be a lower cost solution and simplify the collection infrastructure / logistics arrangements for capturing those containers currently most likely to be lost to the system, i.e., consumed away from home or places of work. CIWM further believes the scope of DRS should cover steel, aluminium, and polyethylene terephthalate (PET) drinks containers, but for the reasons listed in ‘The Issues’ in this position statement, should exclude all glass containers.

Whilst respecting that waste policy is a devolved issue, with regards to scope, fees and labelling CIWM believes there should be no divergences between any implemented national DRS. Any inconsistencies would create inefficiencies for the wider resources and waste sector, producers, manufacturers, brands, as well as potential problems for citizens.

CIWM believes the hybrid concept of a digital DRS system could potentially embrace the positives of DRS, whilst addressing some of its negatives, but that larger scale trials are needed to prove the efficacy of such a system.

What is it?

Deposit return schemes are programs that provide financial incentives for consumers to return used items for recycling or reuse. The consumer pays an up-front monetary deposit on any in-scope item at the point of purchase. This deposit is then redeemed on return of the used item to a designated return point.

The theory is the financial incentive of getting the deposit back will encourage ‘desired’ consumer behaviour – essentially reducing littering and collecting high quality materials in greater quantities, thus conserving resources, and reducing greenhouse gas (GHG) emissions. It is also claimed that DRS can encourage consumers to think more about the environmental impacts of their consumption and disposal habits, thus encouraging more sustainable behaviour in the longer-term.

DRS programmes in various forms are currently in operation in many European countries; Sweden, Iceland, Finland, Norway, Denmark, Germany, the Netherlands, Estonia, Croatia, Lithuania, Slovakia, and Latvia. Norway’s scheme has been in place since the 1970s with Denmark and Sweden introducing theirs in the 1980s. Elsewhere, schemes are also in place in many Australian states and territories, several Canadian provinces, Ecuador, and numerous states in the USA (including Hawaii and Oregon).

Proponents of DRS point to higher performing schemes, particularly in Europe, which achieve 90%+ redemption rates for in-scope packaging placed on the market.

DRS is generally considered to be popular with consumers. In their 2021 consultation, the government claimed the appetite for introducing a DRS remained strong, with 83% of respondents to the 2019 consultation expressing support for the introduction of a scheme. In their January 2023 response to the 2021 consultation, government referred to Defra consumer research carried out in 2019 where 74% of survey participants supported a DRS.

Trials of a digital DRS system, where citizens can use existing kerbside waste and recycling collection services and redeem their deposits with QR codes via their smartphones, have been undertaken in Wales and Northern Ireland, with encouraging results, and larger scaled trials are planned.

The issues

Across the UK, consumers consume an estimated 14 billion plastic drinks bottles, 9 billion drinks cans, and 5 billion glass bottles a year. The government claims that a UK DRS will reduce subsequent litter and improve recycling quality are largely reliant on the experiences of from other parts of the world, who by-and-large, established their Deposit Return Schemes in the absence of established kerbside collection schemes. The government’s case for a UK DRS also lacks the thorough research needed to assess the potential carbon impacts of reverse vending machines (RVMs) and citizens travelling by car to return points.

With consumer participation being a critical factor for a scheme’s success, there is some uncertainty about how UK consumers will react to the loss of convenience of being able to place used drinks packaging containers in their kerbside bin, versus the inconvenience of having to visit a return point to reclaim their deposit under DRS.

Purchasing habits and behaviour have also changed considerably in the years since the DRS scheme was first proposed (e.g. on-line purchasing during covid-19), and the impacts upon the way in which citizen might engage with schemes and take back in-scope drinks containers to return points, are now uncertain.

DRS schemes can also have a detrimental impact on the poorest citizens, in particular those who cannot easily access return points, and those with limited capacity in flats, high-rise, and multi-occupancy buildings to store used packaging.

Concerns have also been expressed regarding the negative impacts that a DRS will have on the value of other recyclates that will remain in the household waste collected by local authorities at the kerbside, and the reimbursement arrangements for local authorities, who will inevitably end up handling some residual DRS materials, for which they will receive no p-EPR payments.

There are practical problems associated with the collection of glass within a DRS such as the high carbon impacts from the transportation glass to and from collection points, the cost of glass capable RVMs, the H&S risks associated with broken glass; noise, and difficulties counting broken glass bottles at collection centres.

There are still some concerns, despite recent government announcements, about the VAT treatment of deposits, as well as the treatment of in-scope containers sold in multi-packs. 

The delays to the governments response to the 2021 DRS consultation, and the deferment of p-EPR, combined with the Scottish DRS going live in 2025, make the timetable for ensuring that the Deposit Management Organisations (DMOs) have sufficient time to be established and the required operating systems implemented challenging. 

The background

Of the four UK nations, Scotland was due be the first to go live with a DRS in August 2023. However, amidst much political wrangling and arguments with industry and retail stakeholders, the scheme was formally delayed until at least October 2025, bringing Scotland into line with the planned start date for the schemes in England, Northern Ireland, and Wales.

Scotland had already indicated that in terms of DRS scope and deposits their scheme would:

• Include glass and PET bottles, aluminium, and steel cans
• Be an ‘all in’ rather than an ‘on the go’ scheme with containers between 100ml and 3 litres in scope
• Charge a flat 20p deposit for each individual container

Joint English, Welsh and Northern Irish consultations on DRS proposals were held in 2019 and again 2021. Defra (on behalf of the English government) have stated they hope the implementation of DRS will ensure 85% fewer containers are littered within three years of launch.

In January 2023, Defra published the joint government’s response to the 2021 consultation, with the following stand-out points:

• England, Northern Ireland, and Wales opted for an ‘all-in’ DRS with containers between the sizes of 50ml and 3 litres in-scope.

• England and Northern Ireland opted for containers made of steel, aluminium, and polyethylene terephthalate (PET) to be in-scope.

• Wales opted for containers made of steel, aluminium, polyethylene terephthalate (PET), and glass to be in-scope, consistent with Scotland.

• The DMO will set the deposit level, which could be fixed or variable, but the maximum will be set out in the regulations. 

• Indication from government that DRS would be rolled out in three phases:

Phase 1: government activity up to the appointment of a Deposit Management Organisation (DMO), including laying the regulations, which will come into force by the end of 2023.

Phase 2: The appointment of the DMO by the summer of 2024.

Phase 3: DRS rollout, with the scheme launch planned for 1st October 2025.

There are still many issues yet to be resolved and clarified, including the full carbon impact of the entire system rather than the aspects covered in the consultation, and further work is needed on the littering impacts, VAT implications for deposits, and local authority payments.

Other areas of ‘clarification’ addressed in the 2023 government consultation response were: 

• Labelling of in-scope containers, which will be a key aspect of a successful DRS and the government has said container labels could (but not should) contain a logo to identify whether it is part of the scheme, a QR/ barcode marker that can be recognised by an RVM, but not necessarily the amount of the deposit. Some of this marking will be mandatory, but it will be the DMO who will decide the details.

 • A DMO will be appointed to run the DRS, who will be part-funded by producer registration fees (which it will set), the revenue from collected and reprocessed materials, and any unclaimed deposits. However, because regulations will need to be made separately for England/Northern Ireland and Wales, two applications may have to be made by DMO applicants leaving the door open to having two separate DMOs, as well as a separate DMO in Scotland. This process will be set out in the regulations rather than by the competitive tender process.

 • A [phased] collection target of 70% in year one, 80% in year two, and 90% thereafter must be met by the producers three years after the DRS comes into operation (currently October 2028), will be set out in the regulations. However, this obligation passes onto the DMO once a Producer registers with it and it will be the DMO’s responsibility to fulfil that obligation on their behalf.

• VAT treatment of deposits needs to be fully clarified, despite a government letter to the Scottish government in 2023 stating VAT will not be due on reclaimed deposits. All 4 nations are still in dialogue with HM Treasury about the practicalities of this issue.

Return points at retailers selling in-scope containers will be mandatory, although regulations will be flexible and exemptions will be possible in certain circumstances, but retailers seeking exemptions will have to apply to the DMO. Retailers will be entitled to receive a “handling fee” that compensates them for the inconvenience of hosting a return point, and this will be set by the DMO and funded out of the revenue it receives. Retailers will also have the right to refuse a return when certain conditions are not met, and these will be set out in the regulations, but could include the container not being identifiable as a DRS container, soiled/ not empty or on religious/ ethical grounds (e.g. where alcoholic drink containers are being returned). 

The DMO may also permit voluntary return points at locations such as bus or train station to ensure that there is an accessible and comprehensive network of return points. Online retailers, especially large grocery retailers, must offer a ‘takeback’ service from the start of the DRS. The government is also proposing to introduce a new permitted development rights regime for RVMs to ensure the smooth implementation of the DRS, but this is the province of another government department, as well as a devolved matter, so the situation is unclear.

• Local authorities and waste operators may be able to separate out containers and redeeming the deposit on them, but local authorities have expressed concern about the feasibility this arrangement and have indicated it might not be economically viable.

 • Compliance and enforcement will in the first instance the responsibility of the DMO, who will be expected to undertake initial monitoring and compliance to check on whether businesses (producers and retailers) are complying with the regulations, before escalating any serious non-conformance to the environmental regulator (e.g. EA, NRW). There will also be a role for local authority trading standards officers (probably through the Primary Authority Scheme) for the monitoring and enforcement of certain retailer obligations.

CIWM Position Statements represent the Institution’s views at a particular point in time. They remain under constant review, in the light of new experience and research.

Direct Charging of Household Waste Collection

Position Statement

Direct Charging of Household Waste Collection

CIWM view

CIWM believes that legislation should be changed so that local authorities are able to introduce direct charging (DC) for household waste collection.

There are several issues that must be considered when deciding to introduce DC and what form it should take. 

These include:

• Individual characteristics of local authority areas including collection systems, socio-demographics, geography and housing stock.
• Ensuring fairness and that no groups of householders are disadvantaged. 
• Implications for neighbouring authorities in terms of waste ‘migration’ via for example HWRC provision.
• What DC options are available and in which situation they are most appropriate.

CIWM therefore recommends that a robust appraisal system of different DC schemes is applied in areas with different socio-demographic characteristics, collection systems, geography and housing stock.

Central government’s role in the development of direct charging is critical and CIWM recommends that government should:

• Provide clear and robust guidance on option appraisal, planning, financial management and implementation.
• Provide concise guidance on communications, trials and deployment.
• Give clear and unequivocal support for DC in all appropriate fora (including political and media).
• Attempt to obtain cross party support for the issue.  This recommendation is made with a strong understanding of local government practice and the potential for this to become a key local election issue.

CIWM also stresses the importance of three other key issues: 

• The provision of robust and consistent recycling and composting services to households are an essential pre-requisite for the successful application of DC.
• Effective communications about DC at both national and local level. When introducing direct charging, local authorities should provide a clear explanation of the requirements and the potential benefits, including potential financial savings, to householders.  This requirement extends to the clear itemisation of charges within the revised billing system.
• Strong and effective enforcement to ensure the correct use of services and prevent inappropriate and illegal waste behaviour.

What is it?

Direct charging (DC) for waste collection would involve charging householders based on the amount of residual waste they produce, but charging less for recyclables, if not free of charge.  Also known as Pay-as-you-Throw or Save-as-you-Recycle.  This is in direct contrast to the current system whereby householders in the UK pay a fixed annual sum through the Council Tax without a link to the quantity of waste collected.

Direct charging could be based on weight of waste collected or on the number and size of containers used.

The issues

DC is not an option currently open to UK local authorities but policy makers, politicians and representative bodies have, over many years, been calling for a change.  A survey by Pelican Communications showed support from the public. 

Short lived legislation was made under the Climate Change Act 2008, that inserted a new Section 60A and Schedule 2AA into the EPA 1990.  However, the Localism Act 2011 repealed that Section of the Climate Change Act 2008, but EPA 1990 hasn’t been updated to remove the 2008 amendment, so it still looks like it’s on the statute-book.

Research previously undertaken (2003) by CIWM’s Environmental Body reached several conclusions and observations relating to DC including:

• Increasing costs of waste disposal have caused several countries, including some States in the USA, Belgium, Italy, Denmark and the Netherlands, to introduce DC.
• Where DC exists, authorities commonly report significant reductions in the amount of residual waste requiring collection.
• In addition to improving recycling levels, such charging has a role to play in overall waste prevention because they make people think more about not producing so much waste in the first place.
• For these schemes to work best, they need to operate in conjunction with a quality collection service that maximises opportunities for recycling food and green waste collection.
• There is no ‘right’ scheme, for example weight-based versus pay-per-sack.
• Fly-tipping and other forms of criminal activity were identified as possible dis-benefits of this approach and therefore requiring a focus on effective enforcement. 
• DC brings greater financial transparency.  It also improves data capture in terms of collection statistics and patterns – vital for the effective development of waste management policy in the future.

Research commissioned by CIWM in January 2007 Direct and Variable Charging for Household Residual Waste – Overview of Key Issues reiterated many of the conclusions of the earlier study, also highlighting some other important issues relating to DC:

• Equity issues would need to be reflected when considering the desirability of introducing schemes and the form that they should take e.g., low-income families, flats and multiple occupancy properties.
• The introduction of direct charging might mean householders make greater and more frequent use of Household Waste Recycling Centres (HWRC).  Local authorities would therefore have to take this potential increased usage into account when developing the schemes.
• Direct charging could be used in conjunction with other allied practices such as alternate residual collection, incentive schemes such as prize draws and compulsory recycling.  However, joint application with compulsory recycling in the UK would be so different from current practices that it would probably be seen as too heavy handed and cause public and political opposition.

In considering stakeholder and public views, the research also highlighted:

• The importance of government support in assessing, developing and implementing DC schemes.
• Several surveys in which the public had shown themselves to be in favour of non-recyclers and/or high waste producers being fined or paying more for their waste collection.
• CIWM is fully aware direct charging will never be popular with the electorate but needs to be extensively considered to achieve consumer behaviour change and goals set for Net Zero. There are possible parallels with the introduction of seatbelts, stricter drink-driving laws, and more recently 20 mph speed limit on residential roads in Wales.  All of which were deeply unpopular measures at the time.

The background

The UK has set out its Net Zero Strategy and to achieve truly sustainable waste management in the future there has to be a reduction in consumerism and waste arisings.  The need for waste producers (household, business, etc.) to reduce the quantity of, separate and sort their waste properly, recycle and where possible compost as much as possible has never been more important. Defra’s Environmental Improvement Plan 2023 indicated Improving our use of resources, with consistent recycling and extended producer responsibility for business in relation to packaging.

Landfill tax has achieved its aim of reducing waste being directly disposed of to landfill, especially for commercial waste, and targets on biodegradable waste reduced the impact of greenhouse gas emissions from landfilling householders’ organic waste.

Voluntary recycling schemes for householders coupled with educational/promotional campaigns have succeeded in changing behaviour and helped to increase household waste recycling in recent years, on average from 6% to 27% between 1998 and 2006, to flatlining around 45% in 2021.

For this reason, government needs to look at different ways of encouraging behaviour change. Legislation currently precludes UK local authorities from charging householders for waste services according to the amount of waste collected. This is in direct contrast to practices in different parts of Europe and the United States where direct charging has become common place. This shows that other countries have embraced the ‘polluter pays’ principle into waste management systems at the household level. 

Government policy has suggested the continued promotion of economic measures, such as landfill taxes but shied away from ‘pay as you throw’ systems to encourage householders to prevent waste and recycle more.

England’s recent Maximising Resources, Minimising Waste set out policies for designing out waste, targets to increase recycling in the construction waste sector and banning certain single use plastic items.  There was no mention of consideration for direct charging to prevent waste and direct material to recycling.

CIWM Position Statements represent the Institution’s views at a particular point in time.  They remain under constant review, in the light of new experience and research.

Digital Waste Tracking

Position Statement

Digital Waste Tracking

CIWM view

CIWM supports the concept of a Digital Waste Tracking service (DWT), because it will make life easier and simpler for legitimate operators, it will provide them with more accurate and timely data and relieve the data reporting burden of some of the current regulatory regimes. By modernising the way all waste is tracked from cradle-to-grave, and allowing all regulators access to the data held in the system, it should help to further eradicate illegal waste activity. 

CIWM supports the mandatory nature of Digital Waste Tracking service and welcomes the inclusion of data from exempt sites, which we believe should create a more coherent picture of waste movements throughout the UK, make it easier to identify illegal activity.

CIWM believes there is still a place for the ‘season-ticket’ and further thought is needed here, to alleviate some of the potential regulatory and cost burdens, which could affect the collection of small regular movements of waste, especially by SME waste operators.

CIWM also believes that these proposals should be combined with a modernisation the carriers, brokers, and dealers regimes throughout the UK, in particular the introduction of competence, as this will help to further clamp down on waste crime.

What is digital waste tracking?

Legislation across the UK requires that on the transfer of waste, a written description is transferred to enable other people to appropriately manage the waste. This is commonly known as the ‘duty of care’ requirements. For non-hazardous waste this is completed using waste transfer notes (WTNs), and for hazardous/ special waste the records are called ‘consignment notes’.

The ultimate aim of a Digital Waste Tracking service is to be able to provide a seamless digital record of transactions for the movement of waste from cradle-to-grave, eventually in real time, throughout the economy in a simple and effective way, providing value for all users.

The Digital Waste Tracking service is still under development and so the details about what exactly it will provide are not known for certain. However, it is likely to encompass all types of controlled waste and may be extended to include extractive waste at a later date. What we do know with some degree of certainty is that the Digital Waste Tracking service will be mandatory, that the data required will be standardised, and more data will be required for certain types of waste, such as hazardous/ special waste, than others. 

Waste activities that are likely to be included within the record keeping duties of a DWT service are:

1. Waste transferred to another person or company (on same site or different site and for the first time will include exempt sites). 
2. Waste transferred from households to registered waste carriers, but not where household waste is collected by the local authority. 
3. Waste imported or exported under Green List Waste controls.
4. Waste moved between sites managed by the same person.
5. Waste treated on site by the waste holder.
6. Waste that has undergone treatment to ensure that it is subsequently suitable for reuse, recycling, recovery, or disposal.
7. Waste that has been discharged, disposed of, or recovered including through reuse or recycling.
8. The first transfer of end of waste products or materials that are produced from waste and subsequently transferred.

Waste activities that are likely to be excluded from the record keeping duties of a DWT service are:

1. Non-hazardous waste treated at the site of production by the waste holder.
2. Non-hazardous waste that has undergone treatment at the site of production to ensure that it is subsequently suitable for reuse, recycling, recovery, or disposal by the waste holder.
3. Non-hazardous waste that has been discharged, disposed of, or recovered including through reuse or recycling at the site of production by the waste holder.

Exclusions are also likely to apply to a number of exempt activities, in particular those that do not involve the transfer of waste in or out of the place where the exemption is registered, for example the burning of plant tissue and untreated wood (D2, England & Wales) from joinery activities or the burning of plant tissue waste on land in the open (Paragraph 30, Scotland and Northern Ireland).

The Digital Waste Tracking service is likely to replace several established reporting requirements, such as quarterly site returns from permitted sites, hazardous waste quarterly returns and local authority waste data reporting (WasteDataFlow). It is likely to work in a way which is flexible to all users, but with the provision of certain mandatory information before a transfer can be initiated, such as an accurate description, List of Waste codes, producer and destination data.

The Digital Waste Tracking service will provide unparalleled amounts of data about the movement of waste, which will ultimately help regulators crack down on waste crime and provide insights on waste flows for government strategic and planning purposes. It will also make it easier and simpler for all actors to know where their waste is going, thus satisfying their obligations under duty of care.

Interaction with the Digital Waste Tracking service could be by way of an App on a digital handheld device, GOV.UK web portal (either direct input or bulk uploads via spreadsheets) or an APi interface with a corporate IT system. All actors will be provided with unique login credentials and bespoke dashboards, so that they have total visibility of their transactions only, and can analyse trends and performance of their waste production. Regulators too will be provided with unique login credentials and a range of dashboards and systems, which will alert them to any suspicious activity.  

The regulatory regime and DWT service will be designed in parallel, with users playing a central role in their development. The new system will be designed to be interoperable with other regulator systems, such as carrier, broker and dealer permitting and registration, site-based permitting and licencing, and extended producer responsibility regimes.

What are the issues with digital waste tracking?

The introduction of a Digital Waste Tracking service will of course come with its own issues. In particular it is likely to end the practice of ‘season ticket’ WTNs, which have been used to reduce the paperwork burden on operators since the Duty of Care was established over three decades ago. There are also data privacy and security issues yet to be resolved, and there concerns from some quarters about the commercial confidentiality of customer data. There are also some practical difficulties to overcome especially carrier rounds, where multiple ‘lifts’ are collected by a single compaction vehicle, and how the DWT service will easily and accurately record them. The Digital Waste Tracking service is also likely to bring in fees and charges for regimes that have previously been free, this will especially be the case for WTNs and green list waste Annex VII’s; how much these fees and charges will be is unknown at present, but will be subject to a future regulator consultation.

However, all these things are solvable and with give-and-take on all sides the benefits that a DWT service will bring will in the end far outweigh the disbenefits.

There is the perception that the DWT service is something of a silver-bullet for waste crime, and although it may shine a light on transactions and actors that are missing from the system, it is highly unlikely that illegal operators will engage with the system; in much the same way as they do not engage with the current systems and processes. It’s just going to make it harder for them to hide, at least initially.
 

The background to the digital waste tracking service

Over 200 million tonnes of waste is produced in the UK each year, but there is currently no single or comprehensive way of tracking it, with legislation relating to the transport, management and description of waste being introduced separately over the last 30 or so years. 

Large amounts of waste data are either not collected (e.g. waste transfers to exempt sites) or not collated centrally, and where it is collected the systems are various and disparate. Some of these systems are paper-based (e.g. WTNs and Green List (Annex VII) exports), others digital (e.g. spreadsheets); some are run by private contractors (e.g. integrated Sales Order Processing systems), others by the government (e.g. WasteDataFlow). Where the use of existing centralise digital systems is non-mandatory, take up is usually very low. As a result, it is very difficult to determine what happens to waste and to have a comprehensive understanding of whether it has been recycled, recovered, or disposed of.

Joining these fragmented systems up and replacing paper-based record-keeping will make it much easier and less time consuming for legitimate waste companies to comply with regulatory reporting requirements. It should also make it much harder for rogue operators to compete in the industry and commit waste crimes, such as fly tipping, deliberate misclassification of waste, illegal waste exports and the operation of illegal waste sites.

The UK governments are committed to implementing a mandatory the Digital Waste Tracking service and published a consultation in January 2022; a government response is expected in 2023.

In 2020 as part of the GovTech Catalyst Challenge fund, prototypes of a Digital Waste Tracking service were developed with two technology suppliers. This work has provided the basis for the agile development of Digital Waste Tracking service, which began with private beta development of a system in 2023 and should go-live sometime in 2024. 

CIWM Position Statements represent the Institution’s views at a particular point in time.  They remain under constant review, in the light of new experience and research.

Definition of Waste

Position Statement

Definition of Waste – including End of Waste

CIWM view

CIWM sees an urgent need to revisit the definition of waste; the resources and waste has moved on and developed more sophisticated management methods, which are constrained by the current EU definitions.  In particular the collection of organic wastes are more complex now, with ultimate aims of improving land and biodiversity, alongside the conversion of many wastes into secondary raw materials.

CIWM supports the concept of the Circular Economy but believes that the definition of waste can be a hinderance to achieving it.  An example is the current rules blocking the reuse of materials that have been discarded.  The definition of end of waste, if properly applied can be a route away from waste control, but this is marred in confusion and provides no legal certainty to operators who wish to make investments in new and novel techniques to turn material back into resources.

CIWM calls for an urgent national review of the concept of end of waste in the UK, so that secondary resources can be released, thereby creating new business opportunities, skills and the infrastructure required to service a fully functional UK circular economy.  We need to move away from the concept of things as waste and towards the concept of materials that need to be captured and kept in economic use.

CIWM acknowledges the recent (July 2023) release of the Maximising Resources, Minimising Waste, the new Waste Prevention Programme for England.  This “waste prevention programme sets out how we will achieve strategic principle 2 of the Resources and Waste Strategy – to prevent waste from occurring in the first place and manage it better when it does.”  CIWM believes it is imperative that the definition of waste is addressed to make waste prevention possible and effectively control it when it does.

What is it?

How waste is defined has moved on from the terms sanitary and cleansing, as outlined in the Public Health Act 1848 and then gradually the term refuse became the more common terminology for items no longer wanted and needing to be removed for disposal until the introduction in 1975 of the European concept waste.

Definition of Waste is a regulatory construct to determine when an item, substance or material becomes waste. and is currently defined under Section 75 of the Environmental Protection Act (EPA) 1990, as amended by the insertion of Section 75A . It essentially follows the 2008 EU Waste Framework Directive (WFD) definition as set out in Article 3(1) – ‘any substance or object which the holder discards or intends or is required to discard’, but this definition needs to be read in conjunction with Article 2 [of the directive] exclusions from the scope.

End of Waste (EoW) is a regulatory construct to determine when a material is no longer subject to waste controls and it is an essential link to ensure the continued use of resources and the circular economy.  The criteria that determine when material reaches EoW are defined in Article 6 of the Waste Framework Directive, as amended in the UK by Section 75A of the EPA 1990.

There are currently no government plans to amend these definitions but the UK’s exit from the EU could allow future divergence.

The issues

There are numerous issues around the definition of waste and the status of end of waste.  From waste crime to misclassification, as well as a reluctance to fully embrace circularity, due to getting it wrong.

Materials left over from manufacture, can and are used in other processes but with the stigma of a waste label.  For those that produce these ‘waste’ materials there seems an avoidable barrier for reuse – to not call it waste in the first place.  This is easy to say but harder to regulate, ensuring that substances are not misclassified and mismanaged.  There needs to be a defined line between doing the right thing, protecting the environment and waste crime.

The criteria set out in Article 6 of the Waste Framework Directive attempts to aid the decision, but it is not easy and causes numerous cases to go to court to argue the point or seek clarification.  Decisions made in the court may not be applicable for all and those paying for this route of determination are unlikely to share a favourable outcome, creating further unlevel playing fields.

Current Government policy is looking at prevention, circular economy and reuse.  CIWM is supportive of these.  So, how does the resources and waste sector show its support to move material into reuse and remanufacture whilst protecting the very environment it wishes to utilise.  A better understanding of what needs to change in the sector, from a ‘get rid of this’ to ‘need to better utilise this’ is needed, alongside understanding what the material is, where it has come from and where it can be employed for maximum benefit.

There has been work on codes of practice that look at the point waste becomes a non-waste; this is especially true for soil.  Definition of Waste – Code of Practice (DOW-COP) is one of the main guidance documents for use of soils off-site  and achieving end of waste status.  This has been updated but is still awaiting publication.  

Work also continues on Waste Frameworks and Quality Protocols which are being reviewed for several waste streams; such as organics, aggregates, flat glass, etc.

The background

There has always been a requirement for controlling waste, from the early days of contamination in the open streets of many cities in the late 18th Century to the more cultured practices of collecting separate streams of materials as happens now.

In practice the circular economy is not new, it has been going on for centuries, with waste picked up from the streets (horse dung) in the 1750s to use as material for land improvement .

The earliest definition of waste was set out in Section 30(1) of the Control of Pollution Act 1974 and was couched in terms of scrap, effluent or unwanted surplus and required disposal as being broken, worn out or contaminated.  This definition was originally transposed verbatim into Section 75 of the EPA 1990, before being replaced in 1995 by the then EU definition of waste by the Environment Act 1995.  

European Union Directive 1975/442 defined waste as “’waste’ means any substance or object which the holder disposes of or is required to dispose of pursuant to the provisions of national law in force.” 

This definition was amended in 1991 to “‘waste’ shall mean any substance or object in the categories set out in Annex I which the holder discards or intends or is required to discard.”  The EU Directive was codified and recast in 2006 but the definition remained unchanged.  The 2006 version has since been replaced by the 2008 Directive and the reference to Annex I has now been removed “’waste’ means any substance or object which the holder discards or intends or is required to discard.” 

Other changes over this period include Articles within the Directives for Exclusions from Scope, By-Products and End of Waste.

United Nations Statistics Division (UNSD) has also defined waste, in its 1997 Glossary of Environment Statistics, as “materials that are not prime products (that is, products produced for the market) for which the generator has no further use in terms of his/her own purposes of production, transformation or consumption, and of which he/she wants to dispose.  Wastes may be generated during the extraction of raw materials, the consumption of final products, and other human activities.  Residuals recycled or reused at the place of generation are excluded.” 

Non-Waste Framework Directive exemptions were developed to assist with areas that were considered the least polluting to the environment or health.  These exemptions are restricted to a few waste management activities and need to be under control of the waste producer.

CIWM Position Statements represent the Institution’s views at a particular point in time.  They remain under constant review, in the light of new experience and research.

Consistent Collections in England

Position Statement

Consistent Collections in England

CIWM view

CIWM supports the principle of a core set of materials being collected from all households and businesses. For dry recycling materials, this is already largely the case with the exception of plastic films and flexibles.

CIWM believes that there should be a degree of choice and flexibility with regard to the collection method and that a focus on the output of materials being recycled is more important than how they are collected.

CIWM has concerns about the viability of including films and flexibles into the core set of wastes collected from 2027 due to a lack of suitable collection and sorting solutions, and the limited end markets currently available.

CIWM supports the separate collection of food waste from all households and businesses, because this will increase recycling rates significantly and provide a step change reduction in carbon emissions. There may be circumstances where it is appropriate to collect food waste with garden/green waste although these are likely to be the exception. CIWM does not have a view as to the most appropriate treatment method for food or garden waste and believes there should be a choice based on local circumstances.

CIWM supports weekly collection of food waste and less frequent collections of residual waste streams. Evidence from several Welsh local authorities and some English ones, shows that three weekly residual collections promote recycling behaviours and increase capture of materials for recycling and decrease the amount of waste placed in the residual container. CIWM believes that local authorities should be given the option to levy a reasonable charge for the collection of garden waste if it chooses to do so.

What is it?

Consistent collection is a policy for collecting the same core set of materials from all households and businesses in England. It is not about all local authorities and waste management companies using the exact same collection method. The core set would be designated by government and be reviewed on a regular basis, so that new materials could be added to the core set in future. Alongside this is the requirement to collect food waste separately on a weekly basis from households.

The dry recycling element of consistent collections supports targets for packaging producers that the policy of Packaging Extended Producer Responsibility (p-EPR) has introduced. p-EPR also channels funding from producers to local authorities and waste collectors for the collection of packaging. Funding is linked to collections being undertaken in an “efficient and effective” manner.

The government has also indicated that to help with the quality of materials that are collected paper and card should be collected completely separately from any other materials.

As part of the proposals on consistent collections there have been hints that the frequency of residual collections will be specified, perhaps to no more than fortnightly collections.

The government intend to publish statutory guidance that will outline how consistent collections need to be undertaken and what the responsibilities of local authorities and waste collectors are.

The Environment Act 2021 sets out the requirement for local authorities to collect recycling materials separately from other materials, and each other, unless where it is not technically or economically practicable or where there is no significant environmental benefit from sperate collection.

The issues

For a number of materials, such as paper and card, cans, plastic bottles and glass, collections are already very consistent for householders, with nearly all households having these materials collected from the kerbside. Around 75% also have pots, tubs and trays collected from the kerbside, with a small number collecting film and flexibles.

In England, approximately 50% of local authorities collect household food waste, whilst there is 100% coverage in Wales and Scotland.

Even though many businesses recycle some materials there is less consistency in the way it is collected, and many of them have to contract with two or more companies to receive a comprehensive recycling service.

The drive for the collection of a consistent set of materials was originally driven by a need to meet the EU municipal waste recycling target of 65% by 2035; although this target has been retained post EU exit. Previously this target was for household waste, which is a sub-set of the more broader municipal waste category, and is why a core set of materials was proposed for household and business waste as well, or “household like” as it is also referred to. Business waste recycling levels are generally believed to be below household recycling rates and so there is the opportunity to boost English recycling rates by including business waste. 

Even for local authorities that already collect the core set they are likely to have make changes to their collection, bulking and sorting operations. However, for those local authorities who do not, it will likely mean a major service change and the possibility of a fresh procurement process. 

The 2021 consultation proposed a target date by which local authorities should all be collecting the core set of materials of October 2023 with plastic film collected by the latest March 2027. 

If lots of local authorities try to make service changes at the same time there is some concern about whether the market can cope, be that waste management companies, vehicle suppliers, bin suppliers and others.

The background

The concept of having a core set of materials collected from every household and business was introduced in the Our Waste Our Resources: A Strategy for England that was published in December 2018. The Strategy claimed that recycling arrangements could be confusing for residents and that “a good quality collection service, properly explained, is the answer”.

There was a commitment in the Strategy to “legislate to allow government to specify a core set of materials to be collected by all local authorities and waste operators”. This was to be subject to consultation, along with consulting on which materials should be in the core set. The intention was that a minimum standard of recycling services would increase the quality and quantity of material recycled.

A potential core set of materials was outlined in the first consultation on consistency held in 2019 and they were:

• Glass
• Paper and cardboard
• Plastic bottles
• Plastic pots, tubs and trays
• Steel and aluminium cans
  
  

Views were also invited on whether food and drinks cartons and plastic bags and film should be part of the core set, and if so if they needed to be phased in.

The 2019 consultation also proposed that food waste should be a collected weekly and separately from other materials, including garden waste.

In a second consultation in 2021 the following items were proposed to be added to the core set:

• Aluminium foil
• Aluminium food trays
• Steel and aluminium aerosols
• Aluminium tubes, e.g. tomato puree tubes
• Metal jar/bottle lids
• Food and drink cartons, e.g. TetraPak
• Plastic films, e.g. bread bags, carrier bags (at a later date than other items)
  
  

The second consultation also gave an indication of the dates by which collections would need to be in place

• Oct 2023 – core set
• Mar 2025 – food waste (where a long term residual disposal contract is not in place)
• Mar 2027 – plastic film and flexibles
  
  

The government’s response to the feedback it received to the second consultation has been delayed several times and as of July 2023 had still not been published. This means it is uncertain what the final rules and implications of the consistent collection policy are, or what the timetable for implementation is.

It has been announced (July 2023) that p-EPR payments will be delayed until 2025 and these are for packaging elements of household and business waste. It would therefore be no surprise if the requirement to undertake consistent collections did not start until 2025 at the earliest. As part of their announcement on a deferral of p-EPR Defra stated "consistent recycling collections for households will come in after the implementation of the extended producer responsibility scheme. More details on this will be set out in due course."

In their response to the second p-EPR consultation government indicated that work on p-EPR payments for business waste had proved difficult to finalise and that they would allow at least two years to work through and design that payment system. That could mean that the requirements to undertake consistent collections may start at different times for household waste and business waste.

CIWM Position Statements represent the Institution’s views at a particular point in time.  They remain under constant review, in the light of new experience and research.

Carbon Off-Setting

Position Statement

Carbon Off-Setting

CIWM view

There is no doubt that reducing greenhouse gas emissions (GHG) to zero will be challenging for many reasons, including the cost of change, the upheaval associated with changing our lifestyles and scepticism about climate change and global warming. It is therefore more probable than possible that some residual GHG emissions will remain after a decarbonisation strategy is implemented. 

In short, CIWM believes that to achieve Net Zero, with current knowledge and technology, some residual GHG emissions will need to be off-set as a positive mechanism to support wider global emissions-reduction strategies, but that this is only acceptable after the total emissions across all scopes has been reduced by at least 90% as per a long-term Science Based Target. 

When considering an off-setting strategy CIWM believes that the Oxford Principles should be adopted as part of an overall Net Zero plan or decarbonisation strategy.

What is it?

Carbon off-setting, through ‘carbon-trading’ is a broad term used to describe a range of mitigation measures that either compensate/reduce or neutralise/remove GHG emissions and which are either mandatory or voluntary. 

Voluntary off-setting programmes, which are outside of the Kyoto protocol, are being established (including schemes that meet the Gold Standard) and allow corporations and individuals to mitigate their own operational emissions. However, it is these voluntary schemes that have come in for criticism, with concern over whether they are creating additional savings. 

A carbon off-set is a reduction or removal of emissions of carbon dioxide (CO2) or other GHGs made in order to compensate for emissions made elsewhere. It is a transferrable instrument certified by governments or independent certification bodies to represent an emission reduction of one tonne of CO2 or an equivalent amount of other GHGs (CO2e). 

Carbon in-setting is essentially about doing more good than harm in your own supply chain, they are usually nature-based and often have social benefits as a result (e.g. reforestation, agroforestry and regenerative agriculture). 

Nature-based solutions are defined by the European Commission as: “Solutions that are inspired and supported by nature, which are cost-effective, simultaneously provide environmental, social and economic benefits and help build resilience”. Such solutions bring more diverse, nature and natural features and processes into cities, landscapes and seascapes, through locally adapted, resource-efficient and systemic interventions.

The issues

Some of off-setting’s critics have been particularly vocal, describing the practice as paying lip service to action, because the process allows industrialised countries to benefit whilst giving nothing up in return. Some have even called into question the UN Clean Development Mechanism saying that the majority of projects covered by the Certified Emissions Reduction scheme have a low likelihood that emission reductions are additional and are not over-estimated.

Despite this, carbon off-setting is likely to play a role as part of wider global emissions-reduction strategies. However, ensuring it works will call for smart solutions to make off-setting projects more transparent and effective, while still encouraging people and organisations in the developed world to tread lightly and reduce their carbon footprints.

The background

The concept of carbon trading (or off-setting) was first introduced under the Kyoto Protocol, and in a world where very little was being done at the time to address climate change, provided a means for countries and organisations to develop low-cost measures to mitigate or off-set their GHG emissions. The Kyoto Protocol provided three cost-effective and flexible mechanisms; one of these was the Clean Development Mechanism (CDM), under which countries or operators in industrialised nations could acquire carbon credits to reduce their GHG emissions.

The mechanism most closely associated with carbon off-setting was the mandatory CDM, defined under Art.12 of the Kyoto Protocol. This was a UN run carbon off-set scheme, which allowed countries to fund GHG emissions reducing projects in other countries and claim the saved emissions as part of their own efforts to meet international emissions targets. 

The CDM had two objectives to assist: 

1. developing countries to achieve sustainable development and reduce their carbon footprints, and 
2. industrialised countries in achieving compliance with their emissions reduction commitments. 

It achieved these two objectives by allowing industrialised countries to buy approved Certified Emission Reduction (CER) units from CDM emission reduction projects in developing countries in order to meet part of their emission reduction commitments.

Both the projects and the issue of CER units were subject to approval by the CDM Executive Board (supervised by the UN Framework Convention on Climate Change), to ensure the emission reductions were real and additional. 

However, the flaw under the Kyoto Protocol was that it allowed industrialised countries to benefit from such an exchange, because they faced no obligations themselves and gave nothing up in return, the emission reductions were just transferred. 

Under the Paris Agreement the role of off-setting changed, because nearly every country in the world was obligated to identify explicit actions (known as defined national contributions) they agreed to make to reduce GHG emissions, and adapt to climate change. This was a major departure from the approach adopted under the Kyoto Protocol, where only industrialised countries committed to reducing emissions and where off-setting was an explicit and prominent strategy.

However, this does not mean the end of carbon off-setting. In fact, Article 6 of the Paris Agreement explicitly recognises the possibility for international cooperation, through the transfer of emission reductions. If a country allows an emission reduction to be claimed by another, it will no longer be able to count the reduction towards its own GHG target. Through robust accounting methods, any double-counting issues should therefore be averted, and any transfers will need to be balanced using a form of GHG emissions double-entry bookkeeping.

After COP21 in Paris, there was still much to be settled by international negotiations and at COP26 in Glasgow, it was agreed to define off-sets and credits issued under Article 6 of the Paris Agreement as mitigation contributions, as a means of discouraging carbon neutrality claims by buyers. 

Voluntary off-setting can be utilised in corporate Net Zero Strategies and can in principle offer an easy, cost-effective and practical way to compensate for an organisation’s remaining GHG emissions, in lieu of reducing those emissions directly and achieving Net Zero. This is because the total elimination of GHG emissions by internal measures alone is almost impossible for most organisations. However, off-setting should be used sparingly and for organisations who have signed up to the Pledge to Net Zero off-setting is only accepted once a signatory has reduced its total emissions across all scopes by at least 90% as per a long-term Science Based Target. 

Carbon off-setting is still a new and dynamic area. Any organisation intending to use it should aim to keep an eye on the latest science and go beyond the minimum requirements wherever possible, including adopting and following the Oxford Principles for Net Zero Aligned Carbon Off-setting, which in simple terms are:   

1. Cut emissions, use high quality offsets, and regularly revise offsetting strategies as best practice evolves. Key to this is prioritising the reduction in an organisations GHG emissions before considering off-setting. 
2. Shift to carbon removal off-setting. This mainly involves using off-sets that extract GHG directly from the atmosphere. 
3. Shift to long-lived storage. There are many ways of storing CO2 extracted from the atmosphere and consideration should be given to those that lock CO2 up over millennia, such as geological storage.
4. Support the development of Net Zero aligned off-setting. These are likely to be long-term agreements and those that support restoration of habitats and/ or ecosystems.

Nature Based Off-Setting

Off-sets that remove/ neutralise carbon from the atmosphere directly impact emissions within an organisation’s value chain. Examples include nature-based solutions removal (accredited or unaccredited) and man-made negative emission technologies (NETs). 

Nature-based solutions can make an important contribution to reaching Net Zero emissions, if combined with dramatic cuts in GHG emissions and companies that are serious about Net Zero should consider doing both off-setting and in-setting; examples of such schemes are: 

• The Woodland Carbon Code is a quality assurance standard for woodland creation projects in the UK and generates independently verified carbon units that can be purchased to help organisations plan for Net Zero pathways through biodiversity projects. 
• The Peatland Code is a voluntary standard for UK peatland projects wishing to market the climate benefit of restoration and provides assurance and clarity for business and other investors in peatland restoration projects through independent validation and verification. It works on the basis that during restoration, carbon savings are made through rapid emissions reductions.

CIWM Position Statements represent the Institution’s views at a particular point in time.  They remain under constant review, in the light of new experience and research.