Waste-to-energyAnalysis
EU ETS for municipal waste incineration plants: monitoring from 2024 and decisions after 2028
Since 2024, municipal waste incineration plants have reported emissions in the EU ETS, without an obligation to surrender allowances. The Commission is to assess whether to include them in the system from 2028. We explain the legal position and scenarios.
Other language versions: polski.
Under the legal position as of September 2025, municipal waste incineration plants in the EU do not have to surrender CO₂ emission allowances, but since 1 January 2024 they must monitor and report their emissions under the EU ETS. Directive (EU) 2023/959 obliged the European Commission to assess whether to include them in the full system, with a view to 2028, and to present the results in 2026. The decision on how it will be implemented would have serious consequences for waste management costs.
What applies today
As part of the 2023 revision of the system, municipal waste incineration plants became subject to an obligation of monitoring, reporting and verification (MRV) of greenhouse gas emissions from the beginning of 2024. This means that operators must calculate emissions and the share of the biogenic and fossil fractions and present verified reports, but they do not buy or surrender allowances. The MRV obligation is to gather reliable data for the further decision.
What the Directive announces
The Directive requires the Commission, on the basis of MRV data and an impact analysis, to assess whether it is justified to include municipal waste incineration plants in the system from 2028, and also to consider a possible extension to other waste-related processes, including landfills. Sources gave different dates for the report (mostly the middle of 2026), so the text of the Directive is key. The assessment was to cover the costs for municipalities, the impact on recycling and the risk of shifts of waste streams (e.g. to landfills or abroad).
Why this change matters
Municipal waste contains two kinds of carbon: biogenic (paper, wood, organic waste) and fossil (plastics, synthetic textiles). In an incineration plant both burn to CO₂, but only fossil emissions increase the net CO₂ content of the atmosphere. Without a carbon price, the installation has no cost signal to reduce the share of plastics in the waste stream. Inclusion in the ETS adds such a signal: the more plastics, the higher the cost of allowances.
An estimate of scale (illustrative example)
Suppose that the fossil emission per tonne of waste received is 0.4 t CO₂, and the allowance price is EUR 70/t CO₂. The cost would be approx. EUR 28 per tonne of waste, that is about PLN 120. This is a purely illustrative value: the actual cost depends on the composition of the waste, the rules for taking the biogenic fraction into account, the allowance price and any free allocations. Even so, such an order of magnitude is significant compared with gate fees and landfill fees.
Effects on market participants
| Entity | Possible effects |
|---|---|
| Municipalities and residents | an increase in gate fees and waste bills, if the cost is passed on |
| ITPOK | new costs, the need to hedge allowance prices, optimisation of the share of plastics |
| Sorting plants and recyclers | greater demand for separating plastics from residual waste |
| Cement plants and RDF | a change in the relation of alternative fuel prices, if co-incineration is covered |
| Landfills | risk of growing interest in landfilling if the gate fees of incineration plants rise significantly |
The main disputes
- What scope of emissions to count. The industry argues that allowances should cover only the fossil part, while environmental organisations demand that all emissions be counted.
- The risk of a shift to landfills. A higher cost of incineration may cause an increase in landfilling, which in turn generates methane.
- How to use revenues. There are calls for funds from auctions to be directed to the development of separate collection and recycling.
- Equal treatment. Doubt as to whether to cover only municipal incineration plants or also other installations.
What an operator or municipality can do now
- Familiarise themselves with the MRV reports and know the share of the fossil fraction in the stream.
- Model costs under different allowance prices and counting rules.
- Include clauses on changes in the law in contracts.
- Improve the separate collection of plastics and biowaste, because it reduces the share of plastics in residual waste.
- Follow the work of the Commission and the legislator, because the decision on timing and scope will be taken outside Poland.
Irrespective of the final shape of the rules, the direction is clear: the cost of CO₂ emissions from waste will become an element of the economic calculation of the installation.
How an operator can prepare technically
The most important thing is a reliable determination of the share of the biogenic fraction in the waste. Various approaches are used: laboratory analyses of samples, balances based on morphological composition, and estimates from balance data. Each of them has a different uncertainty and cost, and the choice of method affects the amount of reported fossil emissions. The operator should have a monitoring plan approved in accordance with the requirements of the system, verification by an accredited verifier and good-quality data on the quantity and calorific value of the waste. Data from the MRV period will be the basis if the legislator decides to subject incineration plants to the obligation to surrender allowances.
Free allowances and auction revenues
One of the topics of discussion is whether incineration plants would receive part of the allowances free of charge and how to use auction revenues. Supporters of inclusion call for the funds to be earmarked for separate collection and recycling, opponents — for mitigating the effects on residents. There is no resolution in the Directive in force; it will be part of future legislative proposals.
This text is for information purposes only and does not constitute legal advice; before an investment or formal decision, check the current wording of the legislation and consult a lawyer or the competent authority.
Sources
Questions and answers
Do waste incinerators already pay for allowances to emit CO₂?
Not under the current legal situation. Since 2024, municipal waste incinerators have been monitoring and reporting emissions under the EU ETS, but they do not have to surrender allowances. Bringing them under the full system requires a further decision by the legislator.
Why is including incineration plants in the ETS being considered?
Because emissions from burning waste containing fossil-based plastics are not covered by the carbon price, which weakens the incentive to recycle. Inclusion is meant to restore it, but it gives rise to disputes over costs and consequences for municipalities.
Related articles
