EU finally puts a price on burning waste – but loopholes risk undermining its climate impact

Brussels, 17 July 2026 – For the first time, burning waste will carry a carbon price. The European Commission’s proposal to bring municipal waste incineration into the EU Emissions Trading System (EU ETS) is a long-overdue admission that incineration is now Europe’s biggest waste-sector climate problem, and it can no longer get a free pass.

The proposal covers non-hazardous waste incineration and co-incineration installations with a capacity exceeding 3 tonnes per hour, meaning it captures effectively all municipal-scale plants across the EU. However, the fine print reveals how much room operators have been given to keep polluting for free.

The obligation to surrender allowances (i.e., pay for their emissions) will only be phased in gradually between 2031 and 2034, meaning incinerators won’t have to cover 100% of their own emissions until 2034. This is four years later than the 2028 start date set out in the current ETS Directive, when it mandated this review. On top of that, Member States can claim a national opt-out if they can show they are applying “equivalent measures,” while installations in the EU’s outermost regions get a separate derogation until 2035, and waste-to-energy plants supplying district heating remain eligible for free allocation.

Taken together, this is a slow phase-in wrapped in a set of derogations – sold as protection for households and municipalities – that will blunt the investment signal the sector needs, letting operators keep burning valuable, recyclable material at little to no cost for years to come.

“The Commission has taken an important first step by recognising that waste incineration must be part of Europe’s climate policy,” said Janek Vähk, Zero Pollution Policy Manager at Zero Waste Europe. “But a carbon price phased in until 2034, and riddled with opt-outs for Member States and outermost regions, and still handing out free allowances for waste-to-energy heat, will not deliver the transformation this sector urgently needs.”

Zero Waste Europe is calling on the European Parliament and the Council to close the loopholes: shorten the phase-in, limit opt-outs and derogations, end free allocation for waste-to-energy, and bring landfilling fully into the scope of carbon pricing alongside incineration.

One welcome element is how the proposal extends the eligible uses of ETS auction revenues: under Article 10(3), Member States will be able to use these revenues to help local authorities implement measures in line with the higher steps of the waste hierarchy to reduce emissions from municipal waste incinerators. This is exactly the kind of funding channel municipalities need to actually shift away from incineration as costs rise, rather than simply absorbing them.

ENDS

Notes to the editor

• Fossil CO₂ from plastic combustion in incinerators is one of the largest and fastest-growing sources of emissions in Europe’s waste sector, and likely underestimated, since it’s counted under the energy sector, not waste, in official statistics. Europe already has around 65 million tonnes of surplus incineration capacity, competing for waste that should be prevented, reused or recycled (1).
• An analysis by CE Delft shows that full ETS coverage of municipal waste incineration could cut emissions by 4-7 million tonnes of CO2 by 203, rising to 18-32 million tonnes a year by 2040, making it cheaper to recycle than to burn (2).

Further reading

• (1) Equanimator (2023): Enough is enough: The case for a moratorium on incineration
• (2) CE Delft (2025): Waste Incineration under the EU ETS: Assessment of climate benefits – Update 2025

Press contacts

Ariane Osman, Communications Officer at Zero Waste Europe – [email protected] or [email protected] / +32 471 96 55 93

Janek Vähk, Zero Pollution Policy Manager at Zero Waste Europe – [email protected]

About Zero Waste Europe

Zero Waste Europe (ZWE) is the European network of communities, local leaders, experts, and change agents working towards a better use of resources and the elimination of waste in our society. We advocate for sustainable systems; for the redesign of our relationship with resources; and for a global shift towards environmental justice, accelerating a just transition towards zero waste for the benefit of people and the planet. www.zerowasteeurope.eu