Europe at a Crossroads: Including Waste Incineration in the EU ETS to Unlock Recycling Potential

Europe’s waste management has reached a turning point: while the European Union has set ambitious recycling quotas, a significant portion of municipal waste continues to end up in incinerators. A new joint report by Zero Waste Europe and Reloop highlights that market mechanisms currently favor incineration over recycling. The solution lies in including municipal waste incinerators in the EU Emissions Trading System (EU ETS), which experts say could save up to 13 million tons of CO2 emissions annually while making waste sorting economically competitive.

The report’s central thesis is that incineration remains “artificially cheap” because it does not pay the real social costs of pollution and carbon emissions. This distorted pricing prevents member states from meeting the recycling targets set for 2030 and 2035.

The Power of Numbers: Recycling and Climate Protection Gains

Based on detailed modeling, extending the EU ETS would result in measurable improvements across the EU-27 member states. The study compares two main scenarios: a “Business-as-Usual” trend and the inclusion of Municipal Solid Waste Incineration (MSWI) in the ETS.

Key quantitative findings:

• Plastic Packaging: Taxing incineration would increase plastic packaging recycling rates by an average of 6 percentage points at the national level.

• Aluminum Packaging: A 2 percentage point improvement is expected in the material cycle for this segment.

• CO2 Savings: Curbing incineration and implementing more efficient sorting would result in an annual reduction of between 6.3 and 13.1 million tons of CO2 equivalent (CO2e) across the Union.

• Wasted Resources: The report estimates that more than 10 million tons of recyclable materials are currently lost in European incinerators every year.

Breaking Economic Barriers: €79–€161 Extra Cost Per Ton

The report sheds light on the gap between the waste hierarchy and market reality. Currently, incineration is often a more economical option than sorting and recycling mixed waste. However, the introduction of the EU ETS would fundamentally change this dynamic.

Due to the price of carbon allowances, the cost of incineration would rise significantly:

• Direct Cost Increase: Depending on carbon market prices, the cost per ton of incineration would increase by €79 to €161.

• Competitiveness: This price hike would allow Mixed Waste Sorting (MWS) systems to become economically viable. MWS technology could extract remaining plastics and metals from waste destined for incineration, but it is currently sidelined by cheap incineration due to high operating costs.

MWS: The Secret Weapon for Meeting Targets

The report pays special attention to Mixed Waste Sorting (MWS) as the “missing link” necessary to reach recycling targets. Modeling suggests that the introduction of the ETS would incentivize investment in MWS infrastructure, which is particularly vital for plastics.

Incinerating plastics generates the most fossil-based CO2 in the waste sector. If MWS systems can remove these plastics from mixed waste before incineration, it would not only reduce emissions but also provide valuable secondary raw materials to the economy, helping member states meet strict EU targets.

Policy Recommendations: No Time for Delay

Zero Waste Europe and Reloop urge EU policymakers not to wait for currently planned 2028 or 2030 deadlines for full regulatory implementation. Key recommendations include:

1. Early Integration: Including municipal waste incinerators in the EU ETS as soon as possible, without exceptions.

2. Enforcing the “Polluter Pays” Principle: Ending the status quo where waste incineration is exempt from carbon pricing while other industrial sectors must pay for their emissions.

3. Investment in Sorting: Member states should use a portion of ETS revenues to develop sorting technologies and separate collection at the source.

The report concludes that taxing incineration is not a punishment but an essential market correction. Without it, the European Union’s promises regarding a circular economy will remain only on paper, while millions of tons of valuable raw materials and climate goals alike go up in smoke.

Official Sources and References:

• Full Report (PDF): Zero Waste Europe / Reloop – EU Emissions Trading Scheme to Unlock Compliance with Waste Targets

• Publishing Organization: Zero Waste Europe (zerowasteeurope.eu)

• Professional Partner: Reloop Platform (reloopplatform.org)