Slow EU Carbon Rules Leave Dutch WtE Plants at Disadvantage

CCS Seen as The Only Route For Waste-to-Energy Plants

Research by PwC shows that Dutch industry can barely meet its 2050 climate targets without large-scale carbon capture. By 2040, an estimated 21 million tonnes of CO2 could be captured and stored annually. For WtE plants, CCS is the only available decarbonisation route, since their processes cannot be electrified or replaced with hydrogen. Thermal treatment remains necessary as long as non-recyclable residual waste exists.

PwC describes CCS as the most cost-effective way to reduce remaining fossil emissions. According to its calculations, Dutch WtE plants could capture around 1.9 million tonnes of CO2 annually. That is equivalent to about 91 per cent of their current emissions. The operators need to invest large sums in CCS in the coming years. Even so, the necessary conditions are not yet fully in place, which is why investment certainty is considered essential.

Phased Introduction Criticised as Too Slow

The Dutch WtE sector has expressed disappointment with the Commission’s ETS proposal. Notably, waste incineration would only be brought fully under the ETS between 2031 and 2034. In 2031, 25 percent of emissions would fall under the system. This will rise to 50 percent in 2032 and 75 percent in 2033, before full coverage from 2034.

The Commission states that this transition period gives companies enough time to prepare. For Dutch Waste-to-Energy plants, however, it means several more years under a national cost package. Meanwhile, many competitors elsewhere in the EU face little or no comparable cost.

Different Treatment For Regular Industry

The Dutch government abolished the national carbon levy for industrial companies because they had insufficient means to reduce emissions quickly. Grid congestion limits electrification, and the necessary CCS infrastructure, including the Aramis project, is not yet available. As a result, industry remains subject to the EU ETS in the meantime.

The same conditions apply to Waste-to-Energy plants. Their processes cannot be electrified, since they process residual waste that cannot be recycled. In addition, CCS is also their only realistic route to further emission reductions, and they too are waiting for infrastructure such as Aramis, expected around 2031.

The national carbon levy for WtE plants remained in place because waste incineration was not yet covered by the EU ETS. However, with the Commission’s decision to phase in waste incineration under the ETS, that reasoning no longer applies. This makes it increasingly difficult to justify the levy until 2031.

Unequal Conditions Until 2031

The period from 2027 to 2031 creates a significant imbalance. Dutch WtE plants will pay the national carbon levy during these years. Meanwhile, many foreign waste processors will only gradually face ETS costs from 2031 onwards, according to the Dutch Waste-to-Energy plant operators. This makes it more attractive to process Dutch residual waste abroad. As a result, both the competitive position and the investment capacity of Dutch operators are affected.

The government expects EfW plants to invest hundreds of millions of euros in carbon capture and storage during this period. At the same time, uncertainty over future waste supply makes it harder to secure financing for CCS projects. This is because waste could shift to foreign processors with lower costs. According to the sector, the main challenge lies not in the ETS introduction itself but in the transition period until 2031.

Government Urged to Act

The Commission’s decision to phase in waste incineration under the ETS removes the main justification for a separate national carbon levy on EfW plants. The arguments that led the government to abolish the national levy for regular industry largely apply to EfW plants as well.

The sector is calling on the government to suspend the national carbon levy for WtE plants, as was previously done for regular industry, until waste incineration falls fully under the EU ETS or CCS infrastructure such as Aramis becomes available. According to the sector, this is the only way to create a more equal European playing field. Furthermore, it would provide the investment certainty needed to enable hundreds of millions of euros in CCS investment.

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