From waste to resource: the transformative role of the environmental services sector

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In partnership with Equitix, we explore how the environmental services sector is playing an increasingly important role in reducing reliance on landfill and transforming waste into valuable resources, highlighting how organisations are delivering these outcomes in practice

What is the environmental services sector and what role does it play in the UK?

The environmental services sector is a critical pillar of the UK’s infrastructure, delivering essential waste management and resource recovery services to local communities nationwide. The sector plays a vital role in everyday life by managing waste streams that cannot be recycled, ensuring communities are kept clean and recovering useful resources in the process, such as energy and construction materials.

The sector encompasses a range of technologies, including Energy-from-Waste (EfW), anaerobic digestion (AD), and biomass. EfW facilities thermally treat residual waste (waste that can’t be reused or recycled) to generate electricity and heat; AD processes organic waste using a naturally occurring process to produce biomethane and nutrient-rich digestate; and biomass plants convert organic feedstocks such as wood and agricultural residues into electricity.

At its core, the sector provides an indispensable public service. Local authorities rely heavily on environmental services infrastructure to manage residual and organic waste, typically through long-term contracts that ensure safe, reliable treatment and compliance with stringent environmental standards.

As a result, the UK reduces reliance on landfill and waste export, while also benefiting from stable baseload energy supply and usable resources that can be returned to the economy, such as aggregates for the construction sector.

In the context of population growth, stagnating recycling rates, mandatory food collections and record high levels of waste crime, the sector is more relevant than ever.

Why is the sector investible?

The environmental services sector provides critical solutions to society, while also combining strong sustainability credentials with attractive investment characteristics.

Resilient and contracted revenues
The primary objective of assets operating in the environmental services sector is to provide a safe waste treatment solution. Consequently, revenue is predominantly derived from fees paid by customers for the disposal of waste under long-term contracts.

In addition, some facilities benefit from stable, policy-backed income streams, such as the Green Gas Support Scheme and revenues from biomethane production.

Together, these mechanisms underpin and support predictable cash flows, which are attractive to long-term infrastructure investors.

Energy generation
Environmental services assets typically generate additional revenue from the sale of electricity and heat, a material proportion of which can be considered renewable based on the underlying waste feedstock. Assets in the sector provide a beneficial role as reliable baseload generators – generating energy on a continuous basis – in an increasingly intermittent energy system. As a result, assets provide further societal benefit while also securing additional income.

High barriers to entry
Planning and permitting are lengthy and uncertain, regulatory requirements are stringent, and environmental assets require specialist technical expertise to operate. Together, these factors can make new developments difficult and slow, constraining the pace of new capacity. By comparison, existing assets hold a strong position with high utilisation, resilient revenue and long-term value.

Underpinned by structural tailwinds
The UK is also facing a capacity gap in waste treatment. Policies such as rising landfill taxes, mandatory food waste collection, and expanding emissions schemes are steadily diverting waste away from landfill and into solutions that are higher up the waste hierarchy. This is considered positive for the environment. UK policy and regulation also make landfill and waste export less attractive than alternative treatment solutions, not least due to tightening environmental regulation.

Growth opportunities
Cementing the sector’s criticality further are the opportunities to grow into new services and markets, while remaining a true waste treatment solution at the core:

Maximising the use of electricity and heat through local supply agreements with private and public sector partners. This creates a win–win dynamic: local stakeholders and businesses benefit from lower and more predictable energy costs, while the assets continue to generate stable revenues
Deployment of carbon capture and storage (CCS) and carbon capture, utilisation and storage (CCUS) on EfW assets, reducing exposure to future carbon-related costs from the UK emissions trading scheme (UK ETS), while unlocking potential opportunity to generate carbon credits for sale in the voluntary carbon market
Operational optimisation and platform scaling, improving efficiency and performance while using multi-site plants to drive resilience and guarantee service provision to clients.

What are the sustainability benefits?

The sector plays a central role in advancing multiple sustainability objectives.

Landfill avoidance and emissions reduction
By diverting waste away from landfill, environmental services assets significantly reduce greenhouse gas emissions.

Biodegradable waste in landfill breaks down and releases methane into the atmosphere, a greenhouse gas far more potent than CO2. In contrast, EfW, AD and Biomass assets manage these emissions in highly controlled and closely monitored environments, either converting waste into electricity and heat or capturing biogas for productive use.

Energy recovery and decarbonisation
Environmental services assets can also provide a lower-carbon source of reliable baseload energy, which is becoming increasingly important as the UK integrates more intermittent renewables such as solar and offshore wind.

In parallel, AD produces biomethane that can be injected into the gas grid, displacing imported natural gas and supporting the decarbonisation of hard-to-abate sectors.

Circular economy enablement
EfW facilities also recover metals as part of the treatment process. After combustion, the remaining bottom ash contains both ferrous metals, such as steel, and non-ferrous metals like aluminium and copper. Once metals have been separated out, anything left can be assessed for its quality and suitability as aggregate for road building and construction. This process helps reduce the need for virgin resource extraction, supporting circular economy principles.

AD also enables valuable resource recovery through the production of digestate. As organic waste is broken down, a nutrient-rich by-product is created, which can be used as a natural fertiliser in place of synthetic alternatives. When applied to land, digestate returns key nutrients such as nitrogen, phosphorus, and potassium to the soil, supporting agricultural productivity while reducing reliance on energy-intensive fertiliser production and contributing to a more circular, sustainable system.

Future decarbonisation opportunities
The integration of CCS represents a significant opportunity for the sector. EfW and AD assets can capture biogenic CO₂ emissions, creating the potential for negative emissions and contributing to the UK’s net zero targets and presenting significant opportunities in carbon markets.

Sustainable Communities:

Many assets go further, embedding sustainability into their operations through commitments to local employment, community engagement, and the delivery of social value:

Employment and skills: Supporting jobs during both construction and operation, often alongside training programmes, apprenticeships, and broader skills development initiatives
Community engagement: Offering educational programmes, site visits, helping to raise awareness of recycling, resource efficiency, and sustainability
Supply chain support: Local contractors and service providers can play a key role in construction, maintenance, and ongoing operations, strengthening regional economies.

Together, these characteristics position the sector as a compelling long-term investment aligned with both financial and sustainability-related objectives.

Case studies: delivering impact in practice

Viridor – a leading EfW platform:

Viridor operates the UK’s largest EfW portfolio, comprising 12 operational plants processing over 3.5 million tonnes of residual waste annually and generating enough electricity to supply approximately 750,000 homes.

The platform demonstrates how scale and integration underpin both environmental outcomes and asset resilience:

Material landfill diversion, reducing reliance on landfill for residual waste streams and lowering lifecycle emissions associated with waste management
Provision of baseload power, with EfW facilities delivering stable, non‑intermittent generation that complements renewable capacity and contributes to energy system stability
Strong positioning for tightening regulation, given the advanced characteristics of each plant, with progress made on CCS development and an active approach to policy engagement.

Viridor’s CCS project at the Runcorn plant has ambitions to capture up to around 900,000 tonnes of CO₂ per annum, including a significant biogenic share. This would lead to a material reduction in emissions intensity and potential negative emissions over the longer term.

In addition to its decarbonisation impact, the project could support c.300–400 roles during construction and around 60 permanent positions once operational. As part of the wider HyNet industrial carbon capture cluster, it also contributes to a broader employment base of c.2,800 direct skilled jobs across the region, with longer-term potential to support several thousand more as the cluster develops.

As part of core operations, Viridor has embedded a structured approach to stakeholder engagement and workforce management, with a continued focus on safety performance, skills development, and delivery of measurable social value in the communities in which it operates.

Bio Capital: unlocking value from food waste
Equitix’s investment in Bio Capital illustrates how infrastructure capital can scale solutions at the intersection of waste, energy and agriculture. Bio Capital has developed into a leading UK AD platform, with a national network of facilities processing around 500,000 tonnes of food waste annually.

Through this platform, food waste is converted into biomethane, renewable electricity and organic fertiliser, avoiding landfill disposal where organic material would otherwise emit harmful methane gases. As a result, Bio Capital’s operations are estimated to avoid around 300,000 tonnes of CO₂ each year, demonstrating the significant emissions reduction potential to be achieved through AD technology.

This impact is felt not only at a national level, but also within local communities. Bio Capital’s facilities are closely linked to regional waste collection needs, providing reliable, nearby processing capacity for food waste from households and businesses. This supports more efficient waste management and helps underpin mandatory food waste collections across England.

At the same time, the platform contributes to energy resilience by producing biomethane that can be injected into the gas grid, offering a lower-carbon, domestically generated alternative to natural gas. In the context of increased energy market volatility, this localised production helps reduce reliance on imported fuels and supports the decarbonisation of heat.

Bio Capital’s role also extends into the rural economy through its production of digestate. This nutrient-rich by-product is returned to farmland, where it can replace synthetic fertilisers, improve soil health and reduce dependence on energy-intensive imports. In doing so, the platform helps create a more circular system, linking urban waste streams with agricultural production in surrounding regions.

Taken together, Bio Capital demonstrates how platform-scale AD can deliver both system-wide and place-based benefits by reducing emissions, strengthening energy security and supporting more resilient local supply chains.

Tilbury Green Power: embedding social value
Tilbury Green Power is located at the Port of Tilbury in Essex and converts waste wood into renewable electricity. The facility generates renewable baseload power for the grid while diverting significant volumes of waste wood from landfill, supporting both resource efficiency and lower-carbon energy production.

While its core role is environmental, its impact extends beyond energy generation. The site supports local employment and plays an active role in the surrounding economy, demonstrating how infrastructure assets can deliver broader community value.

Central to this approach is a dedicated Social Value Strategy, providing a 15-year framework shaped by local needs analysis and stakeholder engagement. Built around three themes – quality employment, wellbeing and environmental sustainability – the strategy is designed to respond to evolving community priorities.

A key focus is creating opportunities for local people. Through partnerships with schools, charities and businesses, the site is supporting employment and skills initiatives such as mentoring, careers engagement, work placements and apprenticeships. Alongside this, a strong emphasis is placed on workforce wellbeing, with programmes shaped in collaboration with employees.

A workforce committee plays an active governance role, helping to prioritise initiatives and shape delivery, ensuring the strategy reflects both employee and community needs.

Together, these efforts demonstrate how infrastructure can deliver meaningful local benefits, support jobs and strengthening community value alongside environmental outcomes.

Addressing challenges in the sector…

While essential to society, the environmental services sector is not without its critics. It is a sector responsible for managing waste – which can be a divisive subject even within the UK’s robust regulatory and policy framework.

Assets operate under strict Environmental Permitting Regulations overseen by the Environment Agency, requiring operators to control emissions, meet defined limits and undertake continuous monitoring of key pollutants. This provides a high level of environmental oversight and transparency, supporting consistent operational performance.

At a policy level, the UK is increasingly recognising the sector’s role in the transition to net zero. The inclusion of EfW within the UK Emissions Trading Scheme, following a monitoring and reporting phase which started in 2026, reinforces its criticality to achieving UK decarbonisation targets.

It is also clear that the role of EfW assets is also evolving. CCS and CCUS installation and carbon removals credits are important aspects of the sector’s ongoing innovation and development.

There is also a growing focus on community engagement and local value. As demonstrated by assets such as Tilbury Green Power, embedding social value and aligning with local priorities can strengthen relationships and deliver meaningful benefits alongside core operations.

For Equitix, these factors are central to responsible investment. By aligning assets with UK policy direction, assessing the integration of emerging technologies such as CCS and delivering strong environmental and community performance, environmental services infrastructure can deliver both financial resilience and positive, local outcomes.

Conclusion: investing in essential, future-facing infrastructure

The environmental services sector delivers a critical service to society – providing the capacity needed to manage residual and organic waste safely and in line with tightening regulation. Underpinned by long-term contracts, structural demand and high barriers to entry, the sector offers resilient, visible cash flows.

As policy continues to divert waste from landfill and strengthen carbon pricing frameworks, the role of advanced treatment technologies will become increasingly important. The sector will continue to innovate and evolve in the context of decarbonisation, energy security and waste circularity.

Through its investments in platforms such as Viridor, Bio Capital and Tilbury Green Power, Equitix believes in the importance of this sector in delivering essential services, strengthening local infrastructure, and creating local value for communities served.