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★Mark us as a preferred sourceAccording to a recent proposal by the European Commission, municipal waste incineration plants would be included in the European Emissions Trading System (EU-ETS 1). Data and evaluations from ITAD (InteressenGemeinschaft der Thermischen Abfallbehandlungsanlagen in Deutschland / Interest Group of Thermal Waste Treatment Plants in Germany) highlight that while the draft incorporates several industry demands, it still raises serious concerns regarding the growing competitive advantage of landfilling and the lack of clarity in monitoring rules.
Gradual Introduction and Sector Emission Data
Under the European Commission’s draft published on July 17, 2026, amending the EU Emissions Trading System, municipal waste incinerators would be gradually included in the quota-based system starting in 2031. The obligation to purchase certificates would increase in annual increments of 25 percent from 2031 until reaching full, 100 percent inclusion by 2034. According to data from the EU body, total greenhouse gas emissions from the waste incineration sector amount to approximately 40 million tonnes of CO₂. Of this amount, facilities belonging to the German ITAD membership alone account for about one-quarter.
The Commission further notes that in most Member States, no targeted decarbonization measures have been implemented for this sector to date. Germany’s situation, however, is different: certain facilities have been subject to EU-ETS 1 for years, while the rest must purchase certificates in the national emissions trading system (BEHG) starting in 2024. Nevertheless, Germany owes its climate protection achievements in the waste sector primarily to strict landfill regulations and a highly developed waste management network, rather than solely to emissions trading.
The Risk of Competitive Advantage for Landfilling
One of the most significant unresolved issues and industry concerns is the problem of landfilling. As long as untreated municipal waste continues to be landfilled across large parts of the European Union, the CO₂ pricing of thermal waste treatment must not widen the already existing cost advantage of landfilling. Currently, direct pricing of emissions from landfills is not foreseeable. Although the Commission’s draft recognizes that a CO₂ price could distort the waste hierarchy and proposes including landfilling in Annex I of the EU-ETS Directive, this currently involves only monitoring, reporting, and verification obligations. In its present form, this continues to pose a severe competitive risk and market distortion at the expense of more sustainable waste incineration.
Waste as a Unique Fuel and Public Energy Supply
A fundamental fact is that waste cannot be compared to classic fossil fuels, and its treatment is not a traditional, market-based production process. Operators have minimal to no influence over the volume and composition of the delivered waste. Consequently, the possibilities for reducing emissions through operational and technological measures are extremely limited—a factor the current ETS proposal fails to adequately address.
The thermal treatment of waste—especially in Germany—is a strict environmental and public service obligation. On a positive note, the industry appreciates that heat supplied by thermal waste treatment plants to district heating networks could remain eligible for free certificate allocations after 2030, acknowledging the sector’s indispensable role in municipal heat supply.
Opt-out Option Until 2035 and Differing National Conditions
The proposal also includes an “opt-out” mechanism, allowing municipal waste incinerators to be exempt from the surrender obligation until 2035 if at least two of three specified conditions are met. These criteria are: the existence of a national CO₂ tax of a comparable level, the achievement of European recycling targets, and the successful fulfillment of landfilling targets.
With this step, the Commission acknowledges that waste management development across Europe progresses at vastly different speeds. Member States with advanced recycling infrastructure and very low landfill rates must not be treated the same as countries that still heavily rely on dumping untreated municipal waste. Germany could be a candidate for applying the opt-out, but numerous legal and economic questions must be clarified before its final implementation.
Monitoring Rules to Be Clarified for Effective Operation
Dr. Bastian Wens, Managing Director of ITAD, pointed out that the key to the system’s operability and credibility lies in the proper, specific design of the Monitoring Regulation (MVO). A valid and functional system can only be built by fully taking into account the specificities of waste management. Experiences from national emissions trading must be integrated into EU regulations. Of paramount importance are the pricing and tariff frameworks, ensuring that facilities have the legal certainty to pass the rising costs of certificates on to the original polluters. A uniform and professional methodology for quantifying carbon dioxide emissions is equally essential.
The Thermal Waste Treatment Sector in Numbers
To illustrate the scale and economic weight of the industry, it is important to note that ITAD represents over 90 thermal waste treatment facilities, covering approximately 95% of Germany’s treatment capacity. The sector employs more than 7,000 workers and recovers over 25 million tonnes of waste annually. The vast majority of the treated waste comes from households, environmental protection measures, as well as the industrial and commercial sectors.
Through this activity, incinerators guarantee waste disposal security for citizens and companies. By utilizing the waste heat generated during the process, they produce massive amounts of energy: annually generating around 10 million megawatt-hours (MWh) of electricity, along with 25 million MWh of process steam and district heating, successfully substituting fossil fuels. The recycling of metals recovered from combustion residues represents a substantial net contribution to climate protection, as this practice results in the saving of several additional million tonnes of CO₂.
Source and Reference Link:
The original press release serving as the basis for the data (ITAD): EU-Vorschlag: Abfallverbrennung soll in den europäischen Emissionshandel