Household waste and heating bills could soon carry a carbon price tag. Brussels is weighing whether to bring municipal incinerators into the EU carbon market from 2028, backed by an unusual coalition of green groups, plastics makers and IKEA. Waste operators warn of billions in extra costs.
The push comes ahead of the Commission’s assessment on whether to bring waste incinerators into the EU carbon market from 2028. Municipalities and waste operators warn the move would raise heating bills and household waste costs. Supporters counter that this overlooks the wider economic and environmental benefits of pricing incineration emissions.
Zero Waste Europe is among the organisations leading the campaign. Janek Vähk, the NGO’s zero pollution policy manager, says support for the proposal reaches well beyond environmental groups.
“The loudest voices are the incineration companies,” Mr Vähk told EU Perspectives. “But behind the scenes there is a much broader coalition supporting the measure.”
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Mr Vähk says that coalition includes plastics producers, chemical manufacturers, cement companies and aluminium producers. Retailers such as IKEA have also joined, each with its own reasons for backing the proposal.
A question of incentives
At the heart of the debate is a fundamental disagreement over what carbon pricing would actually achieve. Waste operators argue that incinerators differ fundamentally from sectors already covered by the ETS, because they cannot choose the waste they process. “The municipalities have to receive the waste and they cannot decide to change the input,” said Constance Maillard, policy officer for circular economy and waste at Veolia, during a recent Brussels briefing.
More than 70 per cent of fossil emissions from waste incineration come from non-recyclable plastics, according to Veolia. Rather than pricing emissions at the end of the chain, the company argues Brussels should tackle the problem upstream. It points to stronger eco-design rules, recycled-content obligations and measures that reduce plastic production in the first place.
Mr Vähk argues that view ignores how waste systems respond to economic incentives, and disputes the premise that what’s incinerated is simply non-recyclable. “What enters an incinerator is not fixed,” he said. “The composition of residual waste depends on the incentives municipalities and waste companies have to sort materials before they are burned.”
He points to peer-reviewed research that the Commission’s Joint Research Centre co-authored, showing that sorting facilities already operating in Norway, Spain and Italy recover 22 per cent to 55 per cent of the plastic in residual waste, depending on plant design. Mixed waste sorting, he argues, is already established practice, not a future prospect.
Pricing emissions from incineration, Mr Vähk says, would encourage investment in separate collection and mixed-waste sorting facilities that recover plastics and other recyclable materials before they reach the furnace.
Chemical recycling companies, he argues, are already struggling to secure enough recyclable plastic because large quantities continue to be incinerated. “If you don’t have feedstock, you can’t have a business,” he said.
Cement producers also support the proposal because their sector already pays for its emissions under the ETS. Aluminium producers argue valuable materials continue to be lost when products are incinerated rather than recycled.
Political support grows
The proposal is also gaining support in the European Parliament. Letters shared with EU Perspectives show MEPs from both the Greens/EFA and Renew Europe groups have urged Climate Commissioner Wopke Hoekstra to include municipal waste incineration in the ETS as part of the upcoming revision.
The letters argue that leaving incineration outside the carbon market exempts one of the waste sector’s largest sources of fossil emissions from the EU’s flagship climate policy. This, they say, weakens incentives for waste prevention and recycling.
Mr Vähk says support tends to be strongest in countries that already price emissions from waste incineration through national systems, including Sweden, Denmark, Germany and the Netherlands. Italy and France, by contrast, remain among the most sceptical member states. Divisions also exist within the European People’s Party.
Costs versus climate
The waste industry’s biggest concern remains the financial impact. Veolia estimates that bringing municipal waste incineration into the ETS would cost European municipalities around €3.8bn a year. Much of that, the company says, would ultimately be passed on through higher waste collection charges and district heating bills.
The company also argues the proposal could discourage investment in new waste-to-energy plants in countries that still rely heavily on landfill. In Poland, for example, waste-to-energy is viewed as an important source of district heating that can cut dependence on imported fossil fuels. Italy, meanwhile, is expected to keep generating millions of tonnes of non-recyclable waste well into the next decade.
Weighing the trade-offs
Environmental organisations see the opposite risk. Incinerators typically operate for 30 to 40 years and need a continuous supply of residual waste to stay economically viable. Europe already has significant excess incineration capacity, Mr Vähk says. Building new facilities today, he argues, risks locking Europe into decades of waste incineration. This comes just as the EU is trying to cut waste generation and boost recycling.
If Europe succeeds in becoming more circular, you don’t want to be locked into infrastructure that depends on burning materials that should be prevented or recycled.
— Janek Vähk, Janek Vähk, zero pollution policy manager, Zero Waste Europe
“Incinerators need waste,” he said. “If Europe succeeds in becoming more circular, you don’t want to be locked into infrastructure that depends on burning materials that should be prevented or recycled.”
Supporters argue that policymakers need to weigh the costs of ETS inclusion against wider environmental and economic gains. Consultancy CE Delft carried out a June 2025 study for Zero Waste Europe and Reloop that backs their case. It estimates that including waste incineration in the ETS could cut emissions within the carbon market. The cut would amount to four to seven million tonnes of CO₂ by 2030. That could rise to 18 to 32 million tonnes by 2040. These reductions would come from a mix of increased recycling, waste prevention, improved sorting, carbon capture and reductions elsewhere within the ETS.
The same study estimates that increased recycling activity could create between 8,700 and 16,400 additional jobs by 2030, rising to as many as 21,700 by 2040, because recycling is considerably more labour-intensive than incineration. It acknowledges that waste management costs would rise, but argues governments could channel ETS revenues back to households and businesses. Governments could pair this with stronger extended producer responsibility schemes, mandatory recycled-content requirements and pay-as-you-throw systems.
Mr Vähk also disputes industry claims that the proposal would substantially increase household costs. He points to research that Zero Waste Europe cites. It suggests the average impact in countries that already price waste incineration amounts to roughly €5 per household a year. He acknowledges, though, that the effect varies between countries, depending on how they organise their local waste systems.
