"There is no legal requirement to participate."
That sentence is from a UK government document published on 1 January 2026.1 It describes the terms under which waste incineration operators are invited — not required, invited — to begin monitoring their carbon emissions under the UK Emissions Trading Scheme.
The document continues. There is "no fee payable to the regulator." There is "no penalty for non-participation." Operators are "encouraged" to have their annual emissions reports verified — encouraged, not required.1 There is no public register of who participates and who does not.
Five absences. No requirement. No fee. No penalty. No verification mandate. No register.
I want to show you what those absences cost.
£377 Million
The UK operates 63 waste incineration facilities.2 In 2024, they processed 16.82 million tonnes of waste and emitted approximately 7.63 million tonnes of fossil CO2 — carbon from plastic and other petroleum-derived materials in the waste stream.2
The UK Emissions Trading Scheme prices carbon. Since January 2021, power generators have bought allowances for every tonne of CO2 they emit. Industrial manufacturers have done the same. Airlines have done the same. In five years, the UK ETS has raised £17.8 billion in government revenue from these sectors.3
Waste incineration has been exempt for the entire period.
At the 2026 UK ETS civil penalty price of £49.41 per tonne of CO2,4 the waste incineration sector's annual un-priced emissions are worth £377 million.5
I want to say that differently. Every year since the UK Emissions Trading Scheme began, waste incinerators have emitted fossil carbon at the same scale as many of the sectors required to pay — and they have been charged nothing. Not a reduced rate. Not a transitional rate. Nothing. The exemption is not an oversight being corrected. It is a quantifiable policy choice, running since 2021, worth £377 million per year to the operators who benefit from it.
The question everyone asks about this policy is: how much will it cost when the carbon price arrives?
That is the wrong question. The right question is: how much has the absence of a carbon price already been worth — and to whom?
26.5%
Consider why an operator would volunteer to begin counting emissions that are currently free.
Viridor, the UK's largest energy-from-waste operator by capacity, reported revenue of £579.4 million for the year ending March 2024, with a reported pre-tax profit of £153.6 million — a margin of 26.5%.6 The company is owned by KKR, the private equity firm that announced its acquisition of Viridor from Pennon Group for £4.2 billion in March 2020, completing the deal that July.7 KKR is now reportedly exploring options that could value Viridor at approximately £7 billion — a 67% increase in enterprise value since acquisition, on an asset whose revenue comes almost entirely from long-term council waste disposal contracts.8
Veolia, the UK's largest waste management company by revenue, has published its position on the voluntary period. On its corporate website, it states: "we'll continue to engage with the government to stress the need to defer the full inclusion of waste into the UK ETS, and establish what a phased approach could practically entail."9 It estimates the total cost of MRV to the sector at over £8 million for 2026 — a cost with no commercial return during a voluntary period.9
The arithmetic is straightforward. The UK ETS Authority's own prediction: monitoring will cost the sector £8.5 million during the voluntary period — money, in its words, "borne by operators and for which there is no immediate or direct return."12 The annual value of the exemption from carbon pricing: £377 million. The cost of not participating: £0. If you are an operator earning 26.5% margins on council-backed contracts, and the largest operator in your sector is publicly lobbying for deferral — the rational action is to delay measurement as long as possible.
This is not negligence. It is not resistance. It is obedience to the logic of the incentive structure. A voluntary scheme with no penalty, no register, and no cost exposure is a system that rewards silence. The operators are doing what the system tells them to do.
A note of fairness. Viridor has announced a £1 billion investment programme in carbon capture technology, in partnership with Aker Carbon Capture, targeting five of its facilities.10 This is a genuine commitment — contingent, by Viridor's own chief executive's admission, on government policy support. Kevin Bradshaw has stated that government backing "will be vital for us to keep progressing our plans."10 The Runcorn project, intended as the UK's first negative-emissions waste facility, was restructured in 2025 — the original single-phase design set aside and split into two delivery phases.10 It covers five of 63 facilities. Viridor is investing in the carbon price that is coming. It is also benefiting from the carbon price that has not arrived. Both positions are rational.
Of course. Given those incentives, I would do the same.
96%
Now the argument shifts. Because the voluntary MRV period was not inevitable. It was not even the plan. It was a reversal.
In July 2023, the UK government announced its intention to expand the UK ETS to include waste incineration from 2028, preceded by a two-year monitoring period. The monitoring was framed as mandatory. "The obligation falls mandatorily on waste incinerator operators," reported MRW, the waste management trade journal, at the time.13
In May 2024, the government opened a public consultation. Over 250 responses were received. The respondents included local authorities (58% of submissions), waste and energy-from-waste operators (15%), healthcare and clinical waste providers (4%), and others.14
96% of respondents preferred mandatory MRV.14
Councils preferred mandatory monitoring. Campaign groups preferred mandatory monitoring. The Environmental Services Association — the trade body representing the operators themselves — preferred mandatory monitoring. The ESA acknowledged that a voluntary approach risks producing "insufficient data" for designing the mandatory scheme that would follow.12
Eleven months passed.
In July 2025, the government published its interim response. The MRV was now voluntary.16 Mandatory proposed. Mandatory endorsed. Voluntary delivered. No published rationale explains what happened in those eleven months — the decision that overrode 96% of consultation respondents was delivered without a published justification for the reversal.
Cathy Cook, Chair of the Local Authority Recycling Advisory Committee, described the result as "disappointingly voluntary."15
Viridor — the operator with 26.5% margins and a KKR exit reportedly in play — "welcomed the Government's announcement."11
That is not the scandal. The scandal is the structure.
If neither the councils, nor the operators' own trade body, nor 96% of the consultation respondents wanted a voluntary scheme — the question is no longer who benefits from a monitoring system that nobody asked for. It is sharper than that. Who changed the design — and when?
Not the operators who participate — they spend money monitoring emissions that currently cost them nothing. Not the councils — they gain no visibility into the emissions produced on their behalf. Not the government — it cannot rely on data from a scheme with optional participation.
The beneficiaries are the operators who do not participate. For them, the voluntary period is frictionless. No penalty. No register. No record of absence. And £377 million per year in un-priced emissions continues.
The government stated it chose voluntary MRV to "test different approaches to MRV before legislating" and to "support the finalisation of policy decisions, including in relation to MRV methodologies and how ETS costs pass through from waste incinerators to their customers."16
Every stated purpose — familiarising operators with requirements, testing methodologies, preparing for cost exposure — is achievable through mandatory monitoring with no pricing. The European Union demonstrated this. From 1 January 2024, the EU required mandatory MRV for waste incinerators under the revised ETS Directive — monitoring compulsory, trading obligations not yet begun.18 Twenty-seven member states achieved mandatory monitoring simultaneously. Northern Ireland, under the Windsor Framework, follows the EU's mandatory approach.17
England chose voluntary.
Same waste. Same incineration. One border, two enforcement models. The mandatory one counts the carbon. The voluntary one asks operators to consider counting it.
According to Veolia's own published analysis, "there is no specified end date for the voluntary MRV period."9 Full mandatory compliance is referenced as beginning in 2028, but there is no legislative commitment to that date.19 Each additional year of voluntary monitoring adds £377 million to the cumulative exemption.
31 Years
Stay with me. This next part matters.
The voluntary-before-mandatory pattern is not new to waste incineration. It is one of the most thoroughly documented delay mechanisms in modern industrial history.
In 1985, the chemical industry launched Responsible Care — a voluntary self-regulation programme, already in development before the Bhopal disaster of 1984, designed to demonstrate that the industry could manage its own environmental performance. In 2000, Andrew King and Michael Lenox published a study in the Academy of Management Journal examining whether the programme delivered. It did not. They found no evidence that the programme improved environmental performance and that the absence of sanctions allowed opportunistic behaviour to undermine the programme's stated purpose.20
In 1971, the UK tobacco industry agreed to a voluntary code on advertising — health warnings on packets, restrictions on certain media, self-policing of marketing. The code was explicitly negotiated to forestall legislative controls on tobacco advertising and promotion.21 It lasted 31 years. By 1988, 462 violations of the voluntary code had been recorded, rarely resulting in penalties.21 The comprehensive Tobacco Advertising and Promotion Act did not pass until 2002.22 Three decades of "voluntary" compliance delayed a ban that, once imposed, proved straightforwardly enforceable.
King and Lenox documented a six-step structure: evidence of harm, regulatory pressure, industry proposes a voluntary framework, the framework delays mandatory regulation, industry profits during the delay, and when mandatory regulation finally arrives, its terms have been shaped by the delay.
The waste incineration MRV now has documented evidence at every step.
Evidence of harm: 7.63 million tonnes of fossil CO2 per year. Regulatory pressure: EU mandatory MRV from 2024; UK announces expansion in 2023, framing monitoring as mandatory. Industry proposes framework: the Environmental Services Association set five pre-conditions for accepting mandatory ETS inclusion — a ban on refuse-derived fuel exports, effective waste crime regulation, delivery of packaging reforms, a landfill ban, and fiscal measures on RDF exports.12 Not one of these is within the ETS Authority's power to deliver. Each requires a separate government department to act. The ESA's stated position: "If these conditions have not been met by 2028, the application of carbon pricing to the industry should be delayed."12 The framework delays mandatory regulation: between August 2024 and July 2025, mandatory became voluntary in an eleven-month gap with no published rationale. Industry profits during the delay: £377 million per year in un-priced emissions. Viridor, 26.5% margins. KKR, a £4.2 billion asset reportedly approaching £7 billion. And individual operators publicly welcome the voluntary period that the industry's own trade body said it did not want.11
I should note — and this matters — that the waste MRV is a precursor to confirmed regulation, not an alternative to it. The UK government has announced mandatory compliance. In this, it differs from the tobacco codes, which were designed to prevent regulation entirely. But the comparison is not between industries. It is between structures. In both cases — chemicals and tobacco — voluntary compliance without sanctions produced delay, not preparation. The question for waste incineration is whether the UK has designed a version of "voluntary" that produces a different outcome. The evidence: no register, no penalty, no participation data, no firm end date, five pre-conditions requiring other departments to act, and an eleven-month gap between consultation consensus and policy reversal.
£15
Let me return to where this started. The document.
"There is no legal requirement to participate."1
You have now seen what that sentence costs.
Since January 2021, waste incineration has been exempt from carbon pricing while every comparable emitting sector has paid. The cumulative value of the exemption — from the start of the UK ETS through the voluntary MRV period — is approximately £2.3 to £2.9 billion, depending on the carbon price used for each year.23
THE RECEIPT: THE COST OF SILENCE
| UK ETS operational since | January 2021 |
| Revenue raised from other sectors3 | £17.8 billion |
| Revenue raised from waste incineration | £0 |
| Fossil CO2 emitted by waste incineration (2021-2027) | ~53 million tonnes |
| Estimated value of exemption (2021-2027)23 | ~£2.3–2.9 billion |
| Government monitoring proposal (2023)13 | Mandatory |
| Consultation preference (2024)14 | 96% mandatory |
| Monitoring delivered (2026)1 | Voluntary |
| Cost of MRV participation (2026, sector-wide)12 | £8.5 million |
| Cost of not participating | £0 |
There is one more number.
England has 24.9 million dwellings liable for council tax.24 Divide the annual exemption — £377 million — across those households.
£15 per household per year.25
That is the annual cost of living in a system where waste incineration emissions go un-priced — the climate damage each household's waste generates through a process that currently has no carbon cost attached to it. It does not appear on your council tax bill. It does not appear on any bill. It exists as an un-priced cost borne by the atmosphere, the climate, and the communities who live nearest to the 63 facilities producing it.
When the UK ETS eventually includes waste incineration — and it will — this cost will not disappear. It will move. It will travel from the atmosphere to the gate fee your council pays for waste disposal, and from the gate fee to your council tax bill. The operators' incentive to delay is that during the voluntary period, the cost exists but the invoice does not.
Once measurement becomes mandatory, someone has to open the envelope. That is the subject of the next article in this series.
The Levers
The MRV guidance document is public. It is available on GOV.UK, and its language tells you everything you need to know about the incentive structure it creates.1
Voluntary MRV participation data — how many of 63 facilities have registered — is not published. It could be requested from the Environment Agency (England), the Scottish Environment Protection Agency, Natural Resources Wales, or the Department of Agriculture, Environment and Rural Affairs in Northern Ireland.
The consultation responses that shaped the MRV guidance — including the 96% preference for mandatory monitoring that the government overrode — are summarised in the government's consultation response on GOV.UK.14
The eleven-month gap between consultation closure and policy reversal is not explained in any published document. The interim authority response is available as a PDF on GOV.UK.16 What went in — mandatory proposal, 96% endorsement — and what came out — voluntary — is a matter of public record. What happened between is not.
Your council's waste disposal contract will determine who bears the carbon costs when mandatory compliance begins. Those contract terms — including any change-in-law provisions that allocate new regulatory costs — are the mechanism by which a carbon price at the smokestack becomes a figure on your council tax bill. That mechanism is the subject of Article 2: The Council Bill.