Under proposals published as part of the European Commission’s review of the EU ETS, municipal waste incineration will be phased into the scheme between 2031 and 2034.
Operators will be required to surrender allowances for:
- 25% of verified emissions reported for 2031
- 50% of verified emissions reported for 2032
- 75% of verified emissions reported for 2033
- 100% of verified emissions reported for 2034 and every year thereafter
The proposal confirmed that waste co-incineration installations in the EU’s outermost regions may qualify for exemptions.
Member states will also have the option to delay implementation until 2035 if they meet at least two of the three conditions relating to national carbon pricing, recycling performance and landfill targets.
The Commission said that the phased approach is intended to give the sector greater planning certainty while supporting the EU’s climate and waste reduction objectives.
The UK government previously announced plans to establish a link between the UK ETS and the EU ETS, with the aim of creating a more integrated carbon market.
The UK ETS is currently due to include Energy from Waste and waste incineration facilities from 2028, three years before the EU begins its phased introduction.
Executive Director of the ESA Jacob Hayler said: “The ESA believes that the application of the ETS to waste is a critical tool to help meet our ambition to decarbonise the sector by 2040, but we have also maintained that it should be carefully applied alongside other complementary measures to ensure that waste does not tumble down the waste hierarchy into landfill or journey abroad for other nations to deal with.
“This places the EU’s implementation timeline out of step with UK ETS plans, which risks leakage of waste material from Britain into the EU.
“Clearly there is a need for the UK ETS Authority to reflect on the domestic implications of the EU Commission’s plans and we remain committed to working with Government to ensure that the UK scheme delivers its intended outcomes without creating unintended consequences for British industry or the environment.”
Emissions Trading Scheme for incinerators
Under the EU ETS, sectors covered by the scheme must purchase emissions allowances for the carbon dioxide they emit.
The cap on available allowances reduces over time, increasing the financial incentives for businesses to cut emissions.
The European Commission said that bringing waste incineration into the carbon market will create stronger incentives to reduce emissions and drive investment in technologies such as carbon capture.
However, proposals to include waste incineration have faced opposition from parts of the industry, with operators arguing that the policy risks placing the financial burden on incinerator owners rather than manufacturers of non-recyclable products.
Janek Vähk, Zero Pollution Policy Manager at Zero Waste Europe, added: “The Commission has taken an important first step by recognising that waste incineration must be part of Europe’s climate policy.
“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.”
The Emissions Trading Scheme will be discussed in the sessions and roundtables at the Waste Leadership Summit on 15 October 2026 in London. Find out more and buy tickets here.
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