Heating bills and waste collection fees could soon rise across Europe. Brussels is weighing whether to bring waste incinerators into the EU’s carbon market. Industry warns of billions in added costs, environmental groups say the sector has dodged climate rules for too long.
Municipal waste incinerators could soon become the latest sector to enter the EU’s carbon market. The waste industry warns that bringing waste-to-energy plants into the EU Emissions Trading System (ETS) would increase heating bills, raise household waste costs and burden municipalities. Environmental organisations, meanwhile, argue that excluding the sector has become one of the biggest remaining loopholes in Europe’s climate policy.
Waste-to-energy plants burn residual household waste that cannot be recycled, generating electricity and district heating in the process. Across Europe, 499 such facilities treat 101 million tonnes of waste each year, making them an important part of waste management in countries with limited landfill capacity. Burning that waste, particularly fossil-based plastics, produces significant carbon dioxide emissions.
Under Article 30 of the EU ETS Directive, the Commission must report to the Parliament and the Council by 31 July on whether it is feasible to bring waste incinerators into the ETS, the bloc’s flagship carbon pricing scheme, from 2028. The prospect has already sparked fierce debate over who should pay for decarbonising Europe’s waste sector.
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At a briefing in Brussels this week, utility company Veolia, together with municipal representatives and waste operators from France, Poland and Italy, urged the Commission to leave the sector outside the ETS. The appeal comes just weeks before the Commission’s assessment is due.
Who should pay?
Waste operators argue they are fundamentally different from industries such as steel or cement because they cannot choose the material they process. Veolia laid out this argument in detail during the briefing.
“The municipalities have to receive the waste and they cannot decide to change the input,” Constance Maillard, policy officer circular economy and waste at Veolia, argued during the briefing. More than 72 per cent of fossil emissions from waste incineration come from non-recyclable plastics, according to the company. Brussels should target plastic production upstream instead, Veolia says, through stronger recycling rules, eco-design requirements and recycled-content obligations.
Supporters of inclusion see it differently. Environmental organisations argue that municipal waste incineration is one of the few major sources of fossil carbon dioxide emissions still excluded from the ETS. Emissions from the sector have grown over recent decades, they say. Bringing the sector into the carbon market would restore the polluter-pays principle, they argue, while encouraging better sorting, more recycling and less reliance on burning waste.
Several countries already price emissions from waste incineration through national systems, including the Netherlands, Germany, Denmark and Sweden. The UK plans to include the sector in its own ETS from 2028.
Costs versus climate
Veolia’s central argument is economic. The company estimates that including waste incineration in the ETS would cost European municipalities around €3.8bn annually, with much of that passed on to households and businesses.
In Poland, Veolia estimates waste treatment costs could rise by around 60 per cent by 2035. Heating prices from waste-to-energy facilities could increase by roughly 50 per cent, the company says. French municipalities warned they would be forced to raise waste collection taxes or district heating prices because local authorities cannot legally run services at a deficit.
Operators also argue the plan could discourage investment in new waste-to-energy plants in countries that still rely heavily on landfill. In Poland, where district heating serves around half the population, Veolia estimates waste-to-energy could replace around 10 per cent of imported fossil fuels used for heating. Italy needs twice as many waste-to-energy plants as it currently has, according to the company. Even in the most optimistic scenario, the country is projected to have 9m tonnes of non-recyclable waste to deal with by 2035.
Environmental groups, however, argue that the opposite risk exists. Incinerators typically operate for 30 to 40 years and require a steady stream of residual waste. Expanding capacity now, they say, could undermine Europe’s ambitions to reduce waste generation and increase recycling over time.
Carbon capture
The Commission has suggested carbon capture and storage (CCS) could eventually reduce emissions from waste incineration. Veolia says the technology is not yet commercially viable.
We want no inclusion of WtE and the maintenance of the existing climate framework.
— Constance Maillard, policy officer for circular economy and waste, Veolia
Company representatives acknowledged they are testing CCS. But they argued it remains too expensive, consumes large amounts of energy, and is difficult to deploy at many urban waste facilities because of space constraints. “Carbon capture is part of the solution,” Ms Maillard argued. “But it is not a silver bullet.”
The Commission must present its conclusions by 31 July, under Article 30 of the EU ETS Directive. The decision is becoming another politically sensitive test of how Europe balances climate ambition, affordability and industrial competitiveness.
“Our position is clear,” Ms Maillard said. “We want no inclusion of WtE and the maintenance of the existing climate framework.”
