A new EU-wide trading scheme for residual waste could be a game-changer for Europe’s struggling waste management systems, according to a new report published today by Zero Waste Europe and Reloop, authored by Equanimator.
The report, Marginalising Waste: A Trading Scheme to Reduce Residuals, proposes a cap-and-trade system for residual municipal waste – the waste that remains after prevention, reuse and recycling – to directly tackle the EU’s continued reliance on landfilling and incineration.
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Marginalising waste: A trading scheme to reduce residuals
Report proposing a cap-and-trade system for residual municipal waste to directly tackle the EU’s continued reliance on landfilling and incineration.
Large quantities of waste are still burned or buried
Despite extensive EU waste legislation, large quantities of waste are still burned or buried every year.
The study finds that existing tools such as landfill bans, disposal taxes and recycling targets have delivered uneven results across Member States and often encourage a shift between disposal routes rather than a genuine reduction in waste.
The analysis shows that most waste landfilled in the EU consists of major mineral waste and combustion waste, which are cheap to divert, unevenly distributed across Member States and deliver limited climate or circular economy benefits when targeted by disposal-focused policies. The report therefore recommends excluding these waste streams from the scheme.
By contrast, incineration in the EU is dominated by municipal-type waste, including household and similar waste, sorting residues, mixed and undifferentiated materials, and certain wood wastes. These streams are closely linked to consumption patterns, collection systems and waste system design, making them far more responsive to policies on prevention, reuse and high-quality recycling. This is why the report proposes focusing the scheme on residual municipal waste.
“Many Member States have already received early warning reports showing they are off track on EU waste targets,” said Janek Vahk, Zero Pollution Policy Manager at Zero Waste Europe. “This new scheme could finally turn around struggling waste management systems in many countries, by focusing on what really matters: reducing the amount of waste that is burned or buried in the first place.”
Setting a EU-wide cap on residual municipal waste
The proposed scheme would set an EU-wide cap on residual municipal waste, allocated on a per-capita basis, with trading of allowances to ensure reductions happen where they are cheapest and most effective, while guaranteeing that total residual waste falls across the EU.
Crucially, the report finds that targeting residual waste as a whole – rather than landfill or incineration separately – better aligns waste policy with circular economy and climate objectives.
“This approach directly addresses concerns that bringing incineration into the EU Emissions Trading System could simply push more waste into landfill,” said Clarissa Morawski, Chief Executive of Reloop. “By capping residual waste overall, this scheme complements the EU ETS and ensures that climate policy does not undermine waste prevention or circular economy objectives.”
The Marginalising Wastereport concludes that an EU-level trading scheme for residual municipal waste could become a cornerstone of EU waste policy—reducing pressure to build new incinerators, improving fairness between Member States, and accelerating the transition to a zero-waste, circular economy. By creating a predictable, EU-wide price signal for disposal, such a scheme would also lower investment risk and attract long-term capital into prevention, reuse, recycling, infrastructure across Europe.
Critical window of opportunity within the forthcoming Circular Economy Act
A critical window of opportunity now exists for the European Commission to embed an EU-level cap-and-trade system for residual waste disposal within the forthcoming Circular Economy Act. Decisions taken in this legislative cycle will shape Europe’s waste and resource markets for decades. At a moment when Europe’s recycling and circular industries are struggling to compete against structurally cheap disposal and volatile global material markets, inaction would lock in higher costs, stranded assets, and lost investment.
Acting now, through a harmonised, market-based limit on disposal, would provide the policy certainty and price signals needed to stabilise investment, support Europe’s recycling industry, and accelerate the transition to a resilient, zero-waste circular economy. This is not only the right moment to act; it is the moment when progressive environmental and financial policy can most effectively deliver economic and strategic value for Europe.
