The European Commission has proposed bringing municipal waste incineration into the EU Emissions Trading System from 2031, with operators required to buy carbon permits covering just 25 per cent of their emissions in the first year, rising to full coverage by 2034. The proposal, published today (17 July) as part of a broader EU ETS revision, covers non-hazardous waste incineration and co-incineration plants with a capacity exceeding three tonnes per hour - effectively every municipal-scale incinerator across the EU.

That share rises to 50 per cent in 2032 and 75 per cent in 2033. Member states can opt out until 2035 if they meet at least two of three conditions - they already apply an equivalent carbon tax, they are hitting EU recycling targets, or they are meeting EU landfill diversion targets. On top of that, waste-to-energy plants supplying district heating can still receive free permits, and plants in remote EU overseas territories such as the Canary Islands and French Guiana are exempt until 2035.

The 2031 start date is three years later than the 2028 timeline set out in the current ETS Directive, which required the Commission to assess feasibility by this month. Zero Waste Europe said the delay, combined with the national opt-outs and free permits for district heating, will take the teeth out of the carbon price.

"The Commission has taken an important first step by recognising that waste incineration must be part of Europe's climate policy," said Janek Vahk, 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."

The campaign group wants the European Parliament and Council to shorten the phase-in, tighten the exemptions and scrap free permits for waste-to-energy. It did welcome one part of the proposal - a provision letting member states spend ETS auction revenues on helping local authorities move waste up the hierarchy rather than burning it.

ESWET, the European Suppliers of Waste-to-Energy Technology, whose members have built more than 95 per cent of waste-to-energy plants in operation across Europe, took a more positive view but said the transition years must be spent preparing the sector, not just delaying the bill. It wants investment in carbon capture, utilisation and storage (CCUS) and CO2 transport infrastructure before full inclusion kicks in.

Dr Siegfried Scholz, ESWET president, said: "The proposed gradual transition, together with support for investment, carbon capture, support for district heating, and closer alignment with the Circular Economy Act, provides a strong basis for reducing emissions while continuing to deliver safe waste treatment with low emissions, energy recovery, and valuable secondary raw materials."

Waste-to-energy plants do not control what turns up in the waste they burn, ESWET noted - the fossil CO2 comes largely from non-recyclable plastics put on the market long before they reach an incinerator. The trade body argued that producers who place fossil-based products on the market should bear more of the cost, in line with the Polluter Pays Principle.

The later EU start date also has implications for the UK, where waste incineration is due to enter the UK ETS from January 2028 - three years ahead of the EU - following a voluntary monitoring period that began in 2026. Jacob Hayler, Executive Director of the Environmental Services Association (ESA), said the gap between the two schemes creates a risk of waste flowing across borders.

"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," Hayler commented. "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."

Hayler added that the ESA backs the ETS as a decarbonisation tool but warned it must sit alongside other measures to stop waste being pushed into landfill or shipped abroad. Separately, ESWET welcomed a new requirement in the proposal for monitoring methane emissions from landfills, and said the forthcoming Circular Economy Act should speed up landfill diversion across the bloc.

The waste incineration proposal is part of a wider overhaul of the EU carbon market. Under the same package, the Commission proposed slowing the pace at which the ETS emissions cap falls, extending free permits for heavy industry to 2038 and expanding coverage to flights leaving Europe for destinations within 5,000km. EU member states and the European Parliament will now propose amendments before negotiating the final rules - a process expected to take around a year.