By Kjetil Vikingstad
In 2023, Geminor handled an all-time high waste volume of close to 2,5 million tonnes in Europe. By diverting the majority of the residual waste away from landfill and into efficient energy recovery facilities in the Nordics, the CO2e emissions were reduced by approx. 935,000 tonnes.
A big number, you might think, but just a tiny fraction compared to the total emissions from all EU generated waste last year. Approximately 200 million tonnes of waste legally end up in landfill every year, and according to the latest data from DEFRA and the IPCC, landfill results in approximately 25 times more GHG CO2e emissions than if waste is utilized in high R1 district heating and energy plants.
If there was political will, and practical circumstances were in place, much of this landfilled waste could be turned into much needed fuel for the production of heat and energy for EU citizens in the near future. A move like this may well be a prerequisite to reach net zero emissions by 2050.
Decarbonising Europe with the EfW Sector as part of the solution
The main mechanism for decarbonization in the EU has been to price carbon via the EU ETS, and therefore put a price on carbon emissions. This is arguably the most cost-effective tool to reduce carbon emissions across value chains. However, the inclusion of the EfW sector in the ETS is not standard in Europe, and instead, national carbon taxes are increasingly the preferred option.
Although these taxes can provide more certainty on prices, taxes do not explicitly reduce carbon emissions. While the ETS remains volatile, it has been successful in reducing emissions, with last year showing the most significant annual emissions reductions since the ETS was launched in 2005. This is primarily due to the implementation of caps and the gradual phase-out of free allocations as part of the latest reforms. Instead of an agreement on any reform of the European Tax Directive, the EU ETS remains perhaps the best carbon pricing mechanism we have to realistically reduce carbon emissions.
Changing markets – new approach
The landscape for waste management has changed radically in the past three years, affected by crises such as COVID and the ongoing war in Ukraine. Factors such as growing energy prices, lower waste volumes in many markets and a greater focus on source-segregation has led to overcapacity in the Nordic downstream EfW market.
Finding a path towards a net zero Europe is therefore challenging, but possible with three key recommendations:
- De-incentivising Landfill
The first rule is to implement EU-wide landfill bans or significantly increase the landfill taxes. The possibility to landfill waste is undermining the fight against emissions and brings imbalance to the waste market. As long as some of the biggest markets in Europe have not implemented a ban on landfill or higher landfill taxes, this will for many be the cheapest option. The efficiency of carbon pricing to truly decarbonise the EfW sector, depends upon the stability provided by such regulatory policies.
- A standard Carbon Pricing Framework for the EfW
EfW will always have a role to play in the waste hierarchy. Waste is not infinitely recyclable and there will always be residual which we can still recover for energy. In addition, the EfW sector is a vital part of energy security in Europe. A standard carbon pricing framework that is incentivising rather than punitive could potentially recognise the EfW sector as part of the solution to net-zero. Inclusion in the ETS would expose the industry to volatility but there is potential for a level playing field, if supported by regulations and standard rules to play by.
- A standard method for measuring “fuel”
When emissions from the EfW are taxed, this is done differently across Europe. For example, in Germany the carbon price is set based on the waste code, whilst in the Nordics it is based on the fossil carbon content for some plants, and taxes on others.
A standard method for measuring carbon emissions in the waste would even the playing field further. Standardisation has been successfully implemented in the transport sector, where the Global Logistics Emissions Council have set a method which guarantees a quality in emissions estimations. The same could be done in the EfW sector, helping offtakers to better predict on quality and fossil carbon costs.
As we stand at a crossroads, the path forward requires more than national efforts; it demands international cooperation across the EU. The disparity in regulations, taxation, and incentives across the EU not only complicates the landscape for waste management, but risks being regressive and jeopardizing our collective ability to achieve net zero emissions by 2050. EfW, while not a silver bullet, represents in today’s recovery and recycling market our most sustainable use of waste resources, capable of significantly reducing emissions if supported by a coherent, EU-wide regulatory framework.
