The report examined taxation across 38 countries and warned that differing national approaches risk distorting waste flows and discouraging recovery.
It argued that applying carbon costs to EfW without reforming existing national taxes could weaken the financial incentive to divert residual waste from landfill.
Tax differences
The report found that 24 of the 38 countries reviewed have an identified landfill tax, while 14 have no identified national landfill tax.
Landfill tax rates vary widely, from around €11 to €154 per tonne. The UK has the highest standard rate in the comparison, at £130.75 per tonne, equivalent to approximately €154 per tonne.
Meanwhile, 13 countries apply some form of incineration tax. These vary in design, including charges based on the tonnage of waste treated, carbon emissions or energy output. Eight countries apply a tonnage-based tax and six have a carbon-based tax, with some countries using more than one approach.
RDFIG said the resulting patchwork of taxes can influence commercial decisions, encouraging waste-derived fuel (WDF) to move between countries in response to tax differences rather than operational efficiency or environmental performance.
Andy Jones, Chair of the RDF Industry Group, said: “Europe has spent decades building a waste hierarchy designed to deliver better environmental outcomes.
“As carbon pricing expands and fiscal frameworks evolve, we must ensure that taxation supports that hierarchy rather than undermines it.”
Impact of emissions trading
The report also considered how the expansion of emissions trading schemes (ETS) to EfW could affect the balance between landfill and recovery.
The European Commission has proposed bringing non-hazardous waste incineration and co-incineration into the EU ETS, with surrender obligations due to phase in from 2031 and reach 100% in 2034.
The UK plans to introduce its own ETS for EfW, although no implementation date has been yet confirmed.
To assess the potential impact, RDFIG modelled a scenario applying an assumed carbon price of €110 per tonne of CO2 alongside expected changes to national taxes by 2030.
Under the scenario, Italy’s existing €20 per tonne tax advantage for landfill over incineration changes to a €32.25 per tonne disadvantage, meaning the modelled tax burden on incineration becomes higher than that on landfill. Romania also sees its differential reverse, from €30.52 per tonne in favour of landfill being more expensive to a €21.18 per tonne disadvantage. In Portugal and Greece, the gap narrows to near parity.
RDFIG warned that these changes could weaken the incentive to recover waste, particularly in countries where landfill remains widely available.
Implications for UK operators
The UK retains a comparatively strong tax incentive to divert waste from landfill in the report’s scenario. Its modelled difference between landfill and incineration taxation fell from €153.66 per tonne in 2026 to €123.06 per tonne in 2030 under the ETS stress test, remaining in favour of recovery.
However, RDFIG argued that differences between national tax regimes could continue to affect the competitiveness of cross-border WDF movements and the use of recovery capacity across Europe.
Changes to tax burdens in destination countries could influence the relative attractiveness of export markets.
The group also warned that higher costs for treating recycling residues could affect the competitiveness of recycled materials.
Recommendations
RDFIG made six recommendations for policymakers:
- Keep landfill less attractive than EfW: where landfill is not effectively prohibited, taxes should ensure disposal remains more expensive than recovery.
- Harmonise residual waste taxes: align national frameworks so treatment decisions reflect capacity, efficiency and environmental performance rather than tax differences.
- Use ETS as the default EfW carbon-tax mechanism: phase out or redesign additional national taxes specifically applied to EfW as ETS expands.
- Standardise ETS cost pass-through: improve transparency and consistency in how carbon costs are calculated and passed to waste suppliers.
- Protect recycled-material competitiveness: avoid over-taxing the treatment of recycling residues and ensure recycled materials can compete with primary materials.
- Support a managed transition: provide operators, municipalities and waste suppliers with greater certainty to invest in sorting, fossil-carbon reduction, heat recovery and carbon capture.
Robert Corijn, Chair of the RDF Industry Group’s Policy Working Group, added: “Waste should move because a facility offers suitable capacity, efficient energy recovery or access to decarbonisation infrastructure.
“National tax differences should not determine which facilities can compete.”
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