EU expands Emissions Trading System to transport and waste sectors

The European Union is expanding its Emissions Trading System (ETS), introducing changes that impact both the transport and waste management sectors.

For the transport sector, the ETS2 for fuels is expected to begin in 2028. This shift moves diesel carbon pricing from a predictable national fixed price in Germany to a market-based European system. Bus operators and public transport providers face increased calculation uncertainty, as they cannot easily influence fuel consumption or the market-driven price of CO2.

In the waste sector, the European Commission has proposed including municipal waste incineration plants in the EU-ETS 1 starting in 2031. This transition would involve annual increases of 25 percent until full certificate requirements are met in 2034. The industry association ITAD has warned that this could create a paradox: if carbon pricing makes thermal waste recovery more expensive than landfilling, it may undermine the European circular economy and the established waste hierarchy.