High Court to hear ETS challenge

The cap on the volume of emissions permitted under the UK’s emissions trading scheme is too high and the scheme wrongly omits waste incineration, the High Court will hear this week.

The case is being pursued by environmental consultant, campaigner and UNESCO special envoy Georgia Elliott-Smith, supported by solicitors Leigh Day. A hearing will be convened online on Wednesday and Thursday, with lawyers for business secretary Kwasi Kwarteng and ministers of the devolved administrations due to respond.

The replacement to the EU Emissions Trading System (ETS) is slowly rolling out this year

Its initial cap was chosen for the “improper purpose” of making Brexit smoother, according to a statement from Elliott-Smith. Although the government says that the cap will align with net zero over time, the current one does not accord with short and medium-term obligations under the Paris Agreement to make substantial and immediate reductions in emissions, the lawyers will say.

The cap in the first year of the UK ETS will be 156 million tonnes of CO2 – far higher than the ‘business and usual’ projection of 126-131Mt for 2021. The extra headroom was intended to help it bed in.

The key argument is that while Part 3 of the Climate Change Act 2008 provides for the establishment of an ETS, it does not provide for making a smoother withdrawal from the EU. The government has therefore exceeded its powers.

Smith’s counsel, David Wolfe QC at Matrix chambers and Ben Mitchell of 11KBW chambers, will also argue that waste incineration should not be omitted from the ETS

Broadly speaking, incineration is exempted from the EU ETS, though the European Commission consulted last year on reversing this position. Incineration industry group ESWET said doing so would violate the scheme’s “overarching objective of reducing emissions. It is likely to trigger more landfilling of non-recyclable waste and more use of fossil fuels.”

NGO Zero Waste Europe reposted that the ETS already includes incineration, to some degree. If an installation is designated as a co-incinerator – such as burning biomass coal alongside waste – is included. The exclusion is also optional: both Denmark and Sweden have extended the scope of the ETS to their municipal energy from waste plants.

The group also pointed out including it in the ETS corrects unfair competition for wind and solar power, while effectively subsidising the release of greenhouse gases.

The amount of CO2 emitted by waste incineration in the UK is significant, around 5.4% of the volume of the entire UK ETS.

“The UK’s existing 48 municipal waste incinerators emit 6.6mt CO2 per year – more than Manchester and Birmingham put together. Their exclusion greatly impedes the UK’s efforts to achieve net zero carbon, especially since dozens more are currently under construction or awaiting planning consent.

“The government’s decision to omit municipal solid waste incinerators from the UK ETS because they are difficult to include is a nonsense. Incineration does not pay for the burden that its pollution places on society and there is currently no requirement for operators to reduce carbon emissions,” said Elliott-Smith.

The Climate Change Act already provides for the inclusion of waste incineration, mentioning “the disposal otherwise than for recycling of materials in whose production energy was consumed”. Given their emissions, their omission is irrational, the court will hear, alongside a challenge to the lawfulness of consultation on the scheme.

“In its current form, it could take nine years before the UK emissions trading scheme reduces carbon emissions by a single gram. In omitting major polluters and setting allowances well above business-as-usual levels, the government has failed to meet its Paris Agreement commitments. I look forward to challenging the secretary of state in court to demand he implement the sort of ambitious policies that the climate crisis demands,” said Elliot-Smith.

“Our client’s legal case is extremely timely, given all eyes are on the UK government to set an ambitious example at the COP26 climate change conference scheduled for the end of this year. Her arguments are clear: a scheme set up without proper consideration of either the need to apply downward pressure on emissions, or the nearer-term aspirations of the Paris Agreement, is unlawful and should be redesigned,” said Leigh Day solicitor Rowan Smith. 

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