Impact of carbon taxation on waste treatment activites in France

Sammanfattning

The European Union has adopted the inclusion of municipal waste incineration in the EU ETS (European Union Emissions Trade System) in 2028, under the condition of its efficiency is proven by a European Commission study to be published in 2026. Landfilling is also considered for inclusion. In France, the incineration sector is concerned about double taxation, as waste incineration is already taxed under the TGAP (General Tax on Polluting Activity). In response, they have developed a new tax, called TGAP Climat. To assess the impact of those developments, the cost for operators has been forecasted through 2040 across 5 scenarios. Three model incineration taxation: first, with both the TGAP and EU ETS; second, only with the EU ETS; and third, with TGAP Climat only. The other two include landfilling alongside incineration: first, with TGAP and EU ETS; second, only with the EU ETS. Results show that taxing incineration and landfilling with both TGAP and EU ETS creates significant additional cost for the inhabitant, whereas the scenario modelling the TGAP Climat scenario has the lowest impact. Overall, the plant operator could transfer the cost on the heat sale prices, but this would greatly reduce the competitiveness of waste heat networks compared to others, or eliminate it entirely if EU ETS carbon quota prices increase. Nevertheless, the tax would eventually be passed to the citizen, either directly through the waste management tax or indirectly through the energy prices. In the end, including waste incineration and landfilling in the EU ETS could support sustainability in the waste sector if revenue is correctly redirected to help operators reduce fossil emissions.