Waste incineration under EU ETS could cut CO2 emissions by 32M tonnes

A new study from environmental consultancy, CE Delft, has found that including waste incineration in the European Emissions Trading System (EU ETS) could deliver significant climate and employment benefits.

The research, commissioned by Zero Waste Europe and Reloop, assessed the impacts of bringing municipal waste incineration under the EU ETS from 2028 - the same year as UK implementation - when waste companies would need to purchase emission credits for each tonne of carbon dioxide (CO2) they emit.

Under the proposed system, waste operators treating household, company and industrial waste would face additional costs that would make recycling and waste prevention more competitive compared to incineration.

CO2 emissions cut by up to 32 million tonnes

The study found, should waste incineration be included in the ETS, that emissions could be reduced by four to seven million tonnes in 2030, rising to 18-32 million tonnes by 2040.

The research applied different price elasticities to household and commercial waste streams to see how price increases would drive waste reduction and recycling, basing estimates on forecasted EU ETS prices of €108 per tonne CO2 in 2030.

Commercial and industrial waste has potentially greater responsiveness to inclusion in ETS, with potential reductions of 15 per cent to 41 per cent, reflecting the direct price incentives companies would have to reduce emissions if incineration were placed under the ETS.

The impact of including waste incinerators in the EU ETS on recycling and prevention of household waste would depend on the extent to which municipalities pass on cost increases to households, and the extent to which new sorting technologies are implemented.

The report highlighted the significant potential for residual mixed waste sorting facilities, which can separate recyclable materials from unsorted waste after collection. Without investment, these sorting installations are not profitable yet, but experience in Sweden shows some waste companies have already invested in such facilities under EU ETS incentives.

Commenting on the environmental benefits, Anna Larsson, Direct, Circular Economy Development at Reloop, said: “Multiple lines of evidence from various countries reveal that waste destined for incineration contains over 30 per cent valuable packaging materials. ETS for waste incineration will rescue these resources from combustion, and it is an essential step toward strengthening Europe’s resilience and reducing its carbon footprint.”

Inclusion in the EU ETS would also increase the potential to reduce pollutant emissions from waste incinerators, with the report noting that although emissions of nitrogen oxides have remained stable, other pollutants have shown more variability since the continued construction of incineration facilities.

Zero Waste Europe has undertaken biomonitoring studies across EU Member States to analyse the environment surrounding incinerators, finding elevated levels of harmful chemicals and evidence of pollutants building up in living organisms over time.

Incineration costs passed on to households and businesses

The study also found that the transition from incineration to recycling would create new employment opportunities, with 8,700 to 16,400 jobs projected for 2030, and 11,600 to 21,700 by 2040.

According to CE Delft, these job gains reflect the labour-intensive nature of recycling compared to waste incineration, with great impacts possible if waste prevention activities like repair and reuse activities increase.

However, including incineration under EU ETS would significantly increase waste management costs. For household waste, costs would rise by 46 to 104 per cent, depending on the country by 2040.

The study notes that these cost increases could be mitigated if revenues from CO2 emissions credit are passed on to households and businesses.

To maximise the policy’s impact, the researchers recommend complementary measures, including mandatory recycled content for plastics, obligatory cost coverage from extended producer responsibility (EPR) schemes for recyclables extracted from mixed waste, and wider introduction of pay-as-you-throw systems across Europe.

Janek Vähk, Zero Pollution Policy Manager at Zero Waste Europe, added: “This is a clear win for climate and jobs. Pricing incineration will push Europe to reduce waste, recycle more, and cut emissions where it counts.”

A concern about costs has also been levied by councils in the UK, who have warned that bringing waste incineration under the UK ETS could force cuts of recycling services.