For decades, municipal waste incineration has escaped Europe’s main climate policy. While power stations, steel mills and cement plants have paid for their carbon pollution, incinerators have continued burning millions of tonnes of waste without facing a carbon price. That is finally about to change, writes Janek Vahk.

The European Commission’s proposal to include municipal waste incineration in the EU Emissions Trading System (EU ETS) is therefore a historic milestone. It recognizes a simple reality: once coal is phased out, waste incinerators are among Europe’s most carbon-intensive energy sources because they burn fossil-based plastics. Applying the polluter-pays principle to this sector is long overdue and sends an important political signal that waste policy and climate policy can no longer operate in separate worlds.

The timing could not be more important.

Europe’s waste sector has undergone a remarkable transformation over the past twenty-five years. Thanks to the Landfill Directive, the amount of municipal waste sent to landfill has fallen by almost 60%, from around 121 million tonnes in 1995 to just 50 million tonnes today. During the same period, the amount sent to incineration doubled, from around 30 million to 60 million tonnes annually. Europe has successfully tackled methane emissions from landfill, but in doing so it has unintentionally shifted the climate challenge. As landfill emissions declined, fossil CO₂ emissions from burning plastics became increasingly significant, exposing a major gap in Europe’s climate policy.

Recognising this shift is a major achievement. For the first time, Europe’s flagship climate policy acknowledges that burning plastic waste should no longer be treated differently from burning coal, oil or gas. Unfortunately, recognising the problem is not the same as solving it.

The Commission’s proposal gives incinerators a carbon price on paper, but not necessarily in practice.

The Commission’s proposal puts a price on incineration, but not necessarily one high enough to change behaviour. Operators will only gradually pay for their emissions, starting with just 25% in 2031 and reaching full coverage only in 2034. At the same time, waste-to-energy plants supplying district heating will continue receiving free emission allowances. Together, these design choices mean that many combined heat and power incinerators, which account for around 60% of European capacity, will face only a fraction of the intended carbon price.

This matters because carbon pricing only works if polluters face a meaningful cost.

At today’s carbon prices, a fully exposed incinerator would pay roughly €44 per tonne of waste, enough to make investments such as residual waste sorting, plastics removal and improved recycling economically attractive. Under the Commission’s current design, however, many combined heat and power (CHP) incinerators are expected to face effective carbon costs far below that level, weakening the very investment signal the ETS is supposed to create.

This would be a missed opportunity. Europe already has an estimated 60 million tonnes of excess incineration capacity. A weak carbon price risks extending the life of facilities that should instead be gradually replaced by waste prevention, reuse, better recycling and material recovery.

Predictably, parts of the incineration industry argue that weakening the carbon price is necessary because incineration prevents methane emissions from landfill.

That argument is increasingly outdated.

The real alternative to incineration is not dumping untreated waste into landfill. Modern waste management already offers a better option: recovering recyclable materials while biologically stabilising the remaining organic fraction before landfill. Advanced Material Recovery and Biological Treatment (MRBT), combined with landfill gas capture, can reduce methane emissions by around 92% while recovering valuable materials that would otherwise be destroyed. It delivers climate benefits comparable to incineration with carbon capture, but at a fraction of the cost.

Just as importantly, these systems avoid locking Europe into decades of waste burning.

Incinerators typically require long-term contracts lasting twenty years or more to recover their investment costs. Once built, they create a financial incentive to keep feeding waste into furnaces rather than reducing waste generation or increasing recycling. Adding carbon capture and storage (CCS) does not solve this structural problem, it reinforces it by extending the economic lifetime of facilities that should ultimately become unnecessary.

The industry’s preferred long-term solution, retrofitting incinerators with CCS, also looks increasingly unrealistic. While carbon capture is technically feasible, deployment tells a different story. Of Europe’s roughly 500 waste-to-energy plants, full-scale CCS remains the exception rather than the rule. The Oslo Klemetsrud project is the first waste-incineration CCS project to reach a final investment decision, and it depends on substantial government support.

Europe deserves credit for finally acknowledging that incineration emissions belong within climate policy. That is a breakthrough. But climate policy should do more than generate revenue, it should change investment decisions.

The European Parliament and member states now have an opportunity to strengthen the proposal by ensuring incinerators face a genuine carbon price, phasing out free allowances for district heating, and using ETS revenues to support waste prevention, reuse, better separate collection, plastics recovery and modern biological treatment of residual waste.

The debate should no longer be framed as landfill versus incineration. Europe’s future waste system should minimise both.

The real choice is between locking ourselves into decades more of burning valuable materials, or investing in a circular economy that cuts emissions, recovers resources and steadily makes incineration itself obsolete.

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