The Displacement Risk

Four disposal routes. Four costs.

Incineration: £121 per tonne.¹ Landfill: £157 per tonne.² Export: approximately £100-120 per tonne.³ Fly-tipping: £0.

The waste system is a price map. Fifty per cent of local authority waste in England goes to incineration because incineration is the cheapest legal route.⁴ Not because councils prefer it. Not because it is the best environmental option. Because it is the cheapest. The map works. Waste flows to the lowest price, as reliably as water flows downhill.

In 2028, one of those four numbers changes. Only one.

£121

This is the median gate fee for energy-from-waste incineration in England, according to the WRAP Gate Fees Report for 2024-25.¹ It is the price a council pays a private operator to take one tonne of residual waste and burn it.

The number matters because it exists in relation to the other three routes. Each route has a different cost structure, a different regulatory exposure, and a different community that bears the consequence. The current map looks like this.

Incineration costs £121 per tonne in gate fees alone. No carbon price is currently applied. Sixty-three operational facilities across the UK processed 16.82 million tonnes in 2024, producing 7.63 million tonnes of fossil CO2.⁵ The majority of that waste — 74.4% — comes from local authorities. Incineration's share of local authority waste has grown from a minor route to the majority route in under three decades, and the reason is price.

In October 1996, John Major's government introduced the Landfill Tax at £7 per tonne.⁶ The purpose was explicit: make landfill more expensive than incineration, and waste will move. It did. In 1990, approximately 90% of household waste went to landfill.⁷ By 2023/24, incineration accounted for 50.2%.⁴ The landfill tax is arguably the most successful waste policy instrument in British history. It succeeded because it changed relative prices, and waste followed the price signal.

I want you to hold that precedent. The 1996 landfill tax proves a simple mechanism: change the relative cost of disposal routes and waste changes direction. That mechanism is about to operate again — but pointing a different way.

Landfill costs approximately £157 per tonne: a gate fee of £26 per tonne plus the landfill tax, which rises to £130.75 per tonne from April 2026.² The landfill tax was designed to make landfill more expensive than incineration. It worked. The margin between the two routes — roughly £36 per tonne in incineration's favour — is the reason waste flows to incinerators instead of holes in the ground.

Export costs approximately £100-120 per tonne, including transport to Northern European incinerators.³ English refuse-derived fuel (RDF) exports peaked at approximately 3.5 million tonnes in 2017, then fell as domestic incineration capacity grew and became cheaper than shipping waste abroad. The export route is dormant. It is not closed.

Fly-tipping costs the dumper nothing. It costs councils and landowners £19.3 million per year in clearance of large incidents alone, and there were 1.26 million incidents in England in 2024/25 — a 9% increase on the previous year.⁸

This is the map before carbon pricing arrives. Incineration is the cheapest legal route. Waste flows there. Everyone behaves rationally. The system is working as the prices dictate.

£48

This is the number that changes everything, and it changes only one column of the map.

The UK Emissions Trading Scheme is expanding to include waste incineration. A voluntary monitoring period began in January 2026. Mandatory compliance follows, with the government's most recent guidance removing any specified date for full inclusion but indicating 2028 as the earliest possible start.⁹ When it arrives, each tonne of waste incinerated will carry a carbon cost.

The Ceres/SUEZ analysis, drawing on fourteen years and thirty million records of waste composition data, projects that carbon pricing will add approximately £48 per tonne to incineration gate fees — a roughly 50% increase.¹⁰

The arithmetic, link by link. The UK ETS civil penalty carbon price for 2026 is £49.41 per tonne of CO2.¹¹ Each tonne of waste incinerated produces approximately 0.45 tonnes of fossil CO2.⁵ The base carbon cost is therefore approximately £22 per tonne of waste. With compliance, monitoring, verification, and administrative costs, the Ceres estimate reaches approximately £48 per tonne.¹⁰

Now look at the map again.

THE RECEIPT: WHAT CARBON PRICING DOES TO THE MAP

Route	Before UK ETS	After UK ETS
Incineration gate fee	£121	£169
Landfill total cost	£157	£157
Export cost	£100-120	£100-120
Fly-tipping cost	£0	£0
Routes re-priced		1 of 4

The landfill tax rises with inflation. It is a fixed tax, not a market price. It does not adjust in response to the carbon price. The margin between incineration and landfill — currently approximately £36 per tonne in incineration's favour — is consumed by the carbon cost. At the WRAP 2024-25 median gate fee of £121 per tonne, plus £48 in carbon costs, incineration reaches £169 per tonne. Landfill totals £157.

I will say that again, because the number is easy to hear and difficult to absorb. The policy designed to prevent waste going to landfill — the landfill tax, introduced in 1996, the most successful waste diversion instrument in British history — is being eroded by the policy designed to price carbon. Both policies are doing what they were designed to do. They were not designed to work together.

If carbon pricing adds £48 per tonne to incineration, and landfill costs £157 per tonne, and export costs £100-120 per tonne, and fly-tipping costs nothing — then the cheapest legal route is no longer incineration. The price map that has governed waste flows for a generation inverts. And every actor in the system — the council choosing the cheapest disposal, the waste broker finding the best rate, the operator managing costs — will follow the price signal. They are not being irresponsible. They are being obedient to the arithmetic.

But the arithmetic is pointing at the wrong destination.

The Displacement Cascade

This is the mechanism the piece is built around, and it requires a name because nobody has named it.

The Displacement Cascade is the predictable sequence by which waste moves from a priced disposal route to the cheapest un-priced alternative, with each step in the sequence shifting waste toward less measurement, less enforcement, and less political accountability.

The cascade, mapped by carbon price threshold:

Carbon Price (CO2/tonne)	EfW Gate Fee (est.)	What Happens
£0 (current)	£121	Waste flows to incineration. Status quo.
~£50 (near current UK Allowance price)	£146	Margins narrow. Export competitive for some waste.
~£60-80	£151-161	Incineration approaches landfill parity. Export clearly cheaper.
~£80-100+	£161-171+	Incineration exceeds landfill. Full displacement begins.

Each step down the cascade moves waste to a route with less measurement, less enforcement, and less visibility. That is not a coincidence. It is the structure. The cheapest route is always the one that has not been priced, and the route that has not been priced is always the one nobody is watching.

The first step: landfill. The margin is approximately £36 per tonne. Carbon pricing consumes it. At a carbon price of £60-80 per tonne of CO2, incineration gate fees reach landfill parity. Waste begins shifting to whichever is locally cheaper.

But landfill capacity is declining. The South West has lost 45.1% of its remaining non-hazardous landfill capacity since 2020. Bristol and Bath & North East Somerset have zero active capacity remaining. The West Midlands has lost 40.9%.¹² The alternative route is closing while the price signal pushes waste toward it.

The second step: export. English RDF exports fell from a peak of approximately 3.5 million tonnes in 2017 to a ten-year low in 2022, because domestic incineration was cheaper.¹³ Carbon pricing reverses the economics. Northern European incineration overcapacity is projected at 13.6 million tonnes per year by 2030, according to a 2016 Eunomia analysis.¹⁴ European plants need waste to fill capacity and service debt. Copenhagen's Amager Bakke — a facility designed for 560,000 tonnes per year — has imported waste from the UK to stay viable.¹⁵

The critical detail: the EU ETS does not currently cover municipal waste incineration in most member states. MRV became mandatory from January 2024, and a Commission report on full inclusion is due by July 2026, with member state opt-outs possible until December 2030.¹⁶ UK waste exported to a Dutch or Swedish incinerator that has not yet been brought into the EU ETS faces no carbon price. The emissions still happen. They happen in Rotterdam instead of Runcorn.

This is not carbon reduction. This is carbon geography. The UK's emissions inventory improves. The atmosphere does not.

The government's position deserves a fair hearing. Carbon pricing is designed to incentivise waste reduction and recycling. The landfill tax already deters landfill. Export regulations are tightening. The waste hierarchy says the response to higher incineration costs should be to move waste up — to recycling and prevention. The government is also deploying complementary policies: packaging Extended Producer Responsibility payments will include ETS carbon costs from 2028, Simpler Recycling is being rolled out, and £1.1 billion in EPR-funded recycling infrastructure improvements were announced in July 2025.¹⁷

This is not unreasonable. But it faces three structural problems.

First, EPR covers only packaging waste. According to the County Councils Network analysis, EPR covers approximately 19% of incineration costs.¹⁸ The remaining 81% — synthetic textiles, absorbent hygiene products, electronic waste, composite materials — has no producer bearing the carbon cost.

Second, the Ceres/SUEZ analysis shows that councils can reduce their ETS exposure by 37-56% through proven interventions targeting high-fossil-carbon materials.¹⁰ This is important and should not be dismissed. But those interventions require investment of up to £102 per tonne for recycling improvements and up to £154 per tonne for waste prevention.¹⁰ An LGA survey of council directors of environment found that 93% expect to be unable to meet additional ETS costs within their waste and recycling budgets.¹⁹ The interventions exist. The funding to deploy them does not exist in the timeframe carbon pricing requires.

Third, and this is the structural point that connects the series: PFI deliver-or-pay contracts, documented in the second article of this series, penalise councils for diverting waste from incinerators to recycling.²⁰ The path up the hierarchy requires waste to move away from incinerators. The contracts penalise councils for moving it. The alternatives were not measured (042 documented this). They were not funded. They do not exist at the required scale.

The waste hierarchy assumes the cleaner alternatives can absorb displaced waste. They cannot. Recycling infrastructure has been structurally suppressed by decades of incineration lock-in. Waste prevention requires producer action, not council action. The path of least resistance is not up the hierarchy. It is sideways — to whatever disposal route has not been priced. And each sideways step moves waste toward less visibility.

5.5%

This is where the cascade terminates.

In 2024/25, England recorded 1.26 million fly-tipping incidents — a 9% increase on the previous year.⁸ Large-scale incidents, defined as tipper lorry loads or larger, numbered 52,000, up 11%.⁸ Councils issued 69,000 fixed penalty notices.⁸

Sixty-nine thousand penalties against 1.26 million incidents. That is a fixed penalty notice rate of 5.5%.

Councils took 572,000 total enforcement actions, including investigations, warning letters, and duty of care inspections.⁸ But the financially consequential enforcement — the actions that cost the offender money — comprised 69,000 fixed penalty notices and 1,250 court fines.⁸ The deterrence calculation depends on what it costs to be caught, not on how many letters are sent.

The economics of the terminus: if legal disposal costs rise by £48 per tonne, and illegal disposal costs nothing, and the current system catches 5.5% of incidents with a financial penalty, then two variables move in opposite directions. The incentive to dump rises with every pound added to legal disposal costs. The capacity to enforce falls with every pound of budget pressure. And the budgets that fund enforcement are the same budgets absorbing the carbon cost: 79% of councils anticipate negative impacts on waste services from UK ETS costs, according to the LGA survey.¹⁹

The incentive to dump rises. The capacity to enforce falls. Each increase in the carbon price widens the gap.

Sweden offers the closest available evidence of what happens when this mechanism operates. Both energy companies and the Swedish Police Authority — the Polismyndigheten — have warned of "increased risk of illegal trade with waste due to the increased costs by policy measures (such as taxes and emission certificates)," according to a 2024 Nordic Council of Ministers report.²¹ Not an environmental campaigner. Not an academic. A police authority, in a country that introduced a waste incineration tax in 2020 and scrapped it by January 2023.²¹

If each £10 per tonne increase in legal disposal costs makes illegal dumping proportionally more attractive, and if enforcement is funded from the same budgets absorbing the carbon cost, and if fly-tipping is already at record levels before carbon pricing begins — then the cascade has a calculable terminus. It terminates where measurement stops, enforcement stops, and the cost is borne by the person whose land the waste arrives on.

The fly-tipping rate in London is 53 incidents per 1,000 people. The national average is 21.⁸ The distribution is not random. It follows the geography of enforcement capacity and political power — exactly as the cascade predicts.

1.71 Million Tonnes

The cascade has been mapped as a forecast. Movements one through four show what the arithmetic predicts. This section shows what has already happened.

England's RDF exports rose to 1.71 million tonnes in 2024, an 8% increase on the previous year and a five-year high, according to Environment Agency data reported by EUWID Recycling.¹³ Sweden received a record 906,000 tonnes, an increase of 185,000 tonnes from 2023. The waste export route, dormant since 2019 when domestic incineration undercut it on price, reactivated.

The timeline is worth noting. In July 2023, the government announced the expansion of the UK ETS to include waste incineration.⁹ In 2023, RDF exports increased for the first time since 2019. In 2024, they increased again, reaching a five-year high. H1 2025 saw a moderation — exports fell approximately 10% from the exceptional H1 2024 — but remained above the levels of 2021-2023.¹³

I want to be precise about what this does and does not show. This timeline is consistent with anticipatory market behaviour — operators and brokers adjusting waste routing in advance of future cost changes. Multiple factors may contribute to the 2024 increase: post-COVID waste volume recovery, favourable exchange rates, and Nordic incineration overcapacity creating buyer demand.¹³ The data does not prove a causal link to UK ETS anticipation. EUWID, the source reporting the data, does not attribute the increase to carbon pricing.

But the government's own analytical annex does. The Department for Energy Security and Net Zero acknowledges the displacement mechanism in plain language: "if the price of processing waste to RDF and SRF and exporting this for energy recovery overseas became lower than that of incineration in the UK then we may see substitution of waste incineration for RDF or SRF export."²²

The government saw the cascade. It named the trigger. It acknowledged the destination. And the waste is moving in the direction the government's own analysis predicted, on the timeline the government's own announcement set in motion.

Whether the 2024 export increase is driven by UK ETS anticipation or by a constellation of market factors, the structural point holds. The export route exists. It has capacity — 13.6 million tonnes of Northern European overcapacity by 2030.¹⁴ It has no UK carbon price applied. And it has already reactivated after years of dormancy, coinciding with the UK ETS waste inclusion announcement.

The cascade is not a model awaiting confirmation. It is a data trail.

The Levers

This article does not argue against carbon pricing. It argues against carbon pricing applied to one disposal route in a four-route system where the other three routes are un-priced, under-enforced, or under-measured.

The distinction matters. Carbon pricing is the correct principle: make pollution expensive and rational actors will reduce it. The 1996 landfill tax proves the mechanism works. The problem is not the price signal. The problem is where the price signal points.

In 1996, the landfill tax succeeded because the next-cheapest alternative — incineration — was legal, measured, and had available capacity. The price signal pointed uphill. In 2028, the carbon price faces a different system architecture. The next-cheapest alternatives are landfill with declining capacity, export with no carbon price, and fly-tipping with a 5.5% financial penalty rate. The price signal points sideways and down. Same mechanism. Different system. Different outcome.

Four levers would change where the signal points.

Price all routes, not one. A system-wide carbon price that applies to landfill methane emissions, waste export carbon costs, and the full social cost of illegal dumping — so that no route is artificially cheaper. The landfill tax partially achieves this for landfill but does not include a carbon price on landfill methane, which is twenty-eight times more potent than CO2 over a hundred-year period.²³ Export has no carbon mechanism at all.

Build the alternatives before pricing the current route. Recycling infrastructure investment — the Ceres analysis estimates £102-154 per tonne to make recycling improvements cost-neutral against carbon costs¹⁰ — must arrive before or alongside the pricing pressure, not years after. The gap between the carbon price timeline (2028) and the alternatives timeline is a gap measured in years and billions of pounds.

Ring-fence the revenue. The UK ETS has raised £17.8 billion in total auction revenue since 2021.²⁴ None of it is hypothecated to decarbonisation in the sectors that pay it. If carbon pricing on waste generates approximately £377 million per year in revenue (7.63 million tonnes of fossil CO2 at £49.41 per tonne),^5,11 directing that revenue toward recycling infrastructure, enforcement capacity, and waste prevention would close the very gaps the cascade exploits.

Close the enforcement gap. If carbon pricing creates a £48 per tonne incentive for waste crime, enforcement must be resourced to match. A fixed penalty notice rate of 5.5% against 1.26 million incidents, funded from budgets absorbing the same carbon costs, is not a deterrence system. It is arithmetic that every rational actor can read.

The Landing

Return to the map.

THE RECEIPT: WHERE THE WASTE GOES

Route	Cost (2028)	Measurement	Enforcement	Capacity
Incineration	£169	UK ETS MRV	EA regulated	Fixed
Landfill	£157	Landfill tax	EA regulated	Declining
Export	£100-120	None (UK side)	Basel Convention (international waste shipment controls)	13.6Mt overcapacity
Fly-tipping	£0	None	5.5% FPN rate	Unlimited

Direction of flow: toward the bottom of the table. Direction of visibility: also toward the bottom of the table.

Not the operators. Not the councils. Not the fly-tippers. Each is behaving rationally. The council chooses the cheapest disposal route — that is fiscal responsibility. The waste broker exports to the cheapest jurisdiction — that is market efficiency. The enforcement system catches 5.5% of fly-tipping incidents — that is capacity, not negligence. Everybody follows the rules. The rules produce displacement. And displacement terminates at the point of zero measurement.

The structural villain is the price architecture itself. Carbon pricing on one route in a four-route system, where three routes are un-priced, under-enforced, or under-measured, produces displacement as predictably as water flows through a pipe network with one valve tightened and three left open. The waste does not evaporate. It finds a new channel.

It is working as designed. Which means it can be redesigned.

This is the third and final article in the "Counting Smoke" series.

The first article showed who counts and who does not. The voluntary MRV has no register — so the counting happens in the dark.

The second article showed who pays when counting becomes a bill. The PFI clause was drafted before the policy — so the bill was pre-addressed to the council.

This article shows where the waste goes when the bill arrives. The displacement cascade terminates at fly-tipping — where nobody measures anything at all.

Three articles. Three mechanisms. One argument: the UK built a waste system that resists being seen. Carbon pricing, applied partially, does not overcome that resistance. It amplifies it. The waste goes to wherever the counting stops.

I cannot tell you what to do with this. But now you have seen the map. All four routes. All four costs. You know where the waste goes. You know why.