/>iOn April 14, 2025, the European Commission launched a 12-week public consultation, inviting stakeholders to provide input on potential revisions to the Directive 2003/87/EC (EU ETS Directive). This consultation is a key step towards a comprehensive overhaul of the EU ETS framework, which is scheduled for revision in the third quarter of 2026.
The Commission has set a deadline of July 8, 2025, for stakeholders to submit their feedback.
This consultation is part of a broader impact assessment, which will evaluate the effectiveness, efficiency, relevance, and coherence of the EU ETS, as well as its EU added value in reducing greenhouse gas emissions. It also addresses the functioning of the Market Stability Reserve, which plays a crucial role in managing the supply-demand balance within the ETS.
The Commission’s consultation focuses on several key areas under review, including aviation and maritime emissions, carbon leakage, carbon removals, and, notably, the potential inclusion of municipal waste incineration within the ETS. These topics represent significant potential changes for industries subject to ETS regulations.
Municipal Waste Incineration
One of the most significant and contentious elements of the consultation is the potential inclusion of municipal waste incineration within the ETS. Under Article 30 of the EU ETS Directive, the Commission is required to present a report by July 31, 2026, assessing the feasibility of including waste incineration plants in the ETS starting from 2028. In this context, the Commission will also evaluate the potential inclusion of additional waste management processes within the scope of the EU ETS, specifically focusing on landfilling, which contributes to methane and nitrous oxide emissions. Such an assessment will consider the alignment with the established waste hierarchy.
This proposal has raised concerns within the waste industry, particularly in France, where several national federations, including Fnade, have voiced opposition. These stakeholders argue that the ETS is not suited for waste-to-energy facilities and other waste treatment operations, which they believe serve a public sanitation function. Unlike traditional energy producers, incineration plants cannot choose the waste they process, making it difficult to reduce direct greenhouse gas emissions. These concerns underscore the potential challenges of incorporating waste incineration into the ETS framework.
Implications for Industry Stakeholders
Since the forthcoming proposed changes could have far-reaching implications for various industries, it is critical for stakeholders, particularly those in the waste and energy sectors, to actively participate in the consultation. The potential inclusion of waste incineration in the EU ETS, in particular, is a matter of significant concern for companies operating in the waste-to-energy and waste treatment sectors. For businesses involved in these industries, it is essential to consider how these changes might impact their operations, compliance obligations, and overall environmental strategy.
At this stage, the consultation offers an opportunity to shape the future of the EU ETS framework before any final decisions are made. Stakeholders should assess the potential impact of these changes on their business and provide constructive feedback to the Commission. Furthermore, those wishing to propose amendments or seek representation during the public consultation phase should consider engaging counsel with expertise in these matters. We can provide this assistance and help ensure that your interests are effectively represented.
