Study Recommends Including WtE and Landfill sites in EU ETS

While this move could harmonise the market and reduce emissions, it also presents considerable risks. The analysis outlines how this change could reshape the industry and what complementary measures would be essential for its success.

A report by the Swedish Environmental Protection Agency concludes that a significant policy change is required for EU waste management. The study suggests that integrating waste incineration and landfills into the Emissions Trading System is a necessary measure to achieve climate objectives.

The inclusion of waste incineration plants and landfills in the EU Emissions Trading System (EU ETS) is necessary to reduce greenhouse gas emissions across the European Union, according to a study published in December 2025 by the Swedish Environmental Protection Agency. The report argues that this measure would align the sector more closely with the EU waste hierarchy. It is essential for the EU to meet its 2050 net-zero climate goals. The current system of national regulations is insufficient.

Emissions from waste management are substantial, with waste incineration contributing over 40 million tonnes of CO₂ equivalent per year and landfills approximately 75 million tonnes. The study highlights significant disparities between member states in their approach to waste. Some countries rely heavily on incineration, resulting in higher CO₂ but lower methane emissions. Others favour landfilling, which produces less CO₂ but more methane.

Harmonisation to Prevent Market Distortion

This inconsistency in regulation at the national level leads to market distortions and inefficient waste management practices. The report warns that without EU-wide harmonisation, there is a risk of cross-border waste shipments intended to circumvent emissions costs. There is also a risk of an increase in illegal disposal. A single market with uniform conditions for all facilities is presented as a requirement.

The primary source of emissions identified in the report is the incineration of fossil-based plastics. To mitigate these emissions effectively, the study calls for instruments that reflect the cost of emissions along the entire value chain, particularly for plastic products. This would create an economic incentive to reduce plastic waste at the source.

Risks and Strategic Recommendations

The Swedish experience is cited as an example where the inclusion of waste incineration in the EU Emissions Trading System has led to differentiated fees, investments in post-sorting technologies, and plans for Carbon Capture, Utilisation, and Storage (CCUS). Furthermore, a ban on the landfilling of organic and combustible waste has resulted in a significant reduction in emissions in Sweden.

However, the study also acknowledges potential risks associated with implementing these changes EU-wide. Rising costs for emissions could inadvertently lead to an increase in illegal waste disposal or the export of waste to countries outside the EU. Additionally, the measurement and verification of emissions from landfills are associated with high levels of uncertainty. This poses a challenge for regulation.

Policy Scenarios and Complementary Measures

The report analysed five different policy scenarios. The analysis concluded that the most effective outcomes are achieved in scenarios where both incineration and landfills are included in the ETS. This could be implemented by applying high default emission values for landfills. Alternatively, a comprehensive ban on the landfilling of organic and combustible waste could be introduced.

To support the integration into the ETS, the study recommends a series of complementary instruments. These include an EU-wide tax on plastics or an expansion of extended producer responsibility schemes. Such measures are deemed necessary to pass on the costs of emissions upstream to producers and to encourage investment in recycling and CCUS technologies. An initial free allocation of emission allowances for waste incineration plants could help to facilitate the transition.

In its conclusion, the report reiterates that the EU should incorporate both waste incineration and landfills into the ETS. It advises using high standard values for landfill emissions and/or implementing a ban on landfilling organic and flammable materials. The authors stress that additional policy instruments are essential to prevent illegal disposal and to internalise the cost of emissions throughout the value chain.

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