German CO2-tax will soon change European waste streams

The national BEHG-taxation on CO2 emissions brings new costs to the German EfW-industry from early next year.
Manfred Rissmann, Gemimor

The tax will have consequences for the handling, treatment, and streams of German waste resources, explains account and development manager at Geminor in Germany, Manfred Rissmann.

The new, national CO2-tax announced for the German EfW market will come into force from the 1. January 2024. The emissions from waste incineration will be subject to a CO2 tax that amounts to €40/t in 2024, and will increase to €50/t in 2025. The CO2 tax, which is charged to the incinerator, is paid on top of the existing incineration fee.

The new tax will be charged depending on certain content factors. The most important are the calorific value and the percentage of biogenic content in the waste, which is defined by given waste code numbers.

The challenge of missing codes

As for biogenic content, the CO2 tax will vary greatly depending on how the fossil content in the waste is taxed. The final cost is calculated from a stipulated amount of the biogenic proportions in fractions such as sorting residues, commercial waste and waste wood.

As an example, commercial waste (EWC 15 01 06) has been given a fixed biogenic content of 48.9 percent, while fossil share is 51.1 percent. The sorting residues (EWC 19 12 12) will be taxed as having biogenic and fossil content of 50/50 percent, while waste wood (EWC 17 02 01) is taxed as 95 percent biogenic content and 5 percent fossil content. Undisclosed waste biogenic fractions will be taxed as having 100 percent fossil content.

The different associations of the waste management industry have already massively criticized this, pointing out that biogenic fractions without waste code numbers will be taxed as 100 percent fossil content. To avoid this, they are now calling for the completion of all relevant waste code numbers that will fall under the BEHG in the future.

Unstable market demands flexibility

It is yet unclear how the new taxation will affect the industry. Still, it is fair to say that the new levy will create challenges for the EfW industry in Germany. The most obvious is the significant price increase, which in turn needs to be passed on to waste companies, and finally to consumers. But the increased cost for incineration will also impact the waste market to some degree. We cannot rule out an increased export of secondary fuels from Germany in the coming year. We will probably also see volume movements towards Scandinavia in 2024, both in RDF/SRF and waste wood volumes for thermal and material recycling.

Another aspect is the increased cost of incinerating fossil fractions such as plastics, bringing higher demand on sorting and processing facilities. The new market situation will demand a high level of flexibility to find the most economical and sustainable solutions for waste management across Europe.

Good intentions – troubled market

The intention behind the CO2 tax is to enhance the sorting of waste, thus increasing the recycling rate in the German market. Such long-term effects are welcome. Still, all national taxes which do not comply with other EU countries are likely to stir the market and change the existing waste streams.

The recycling and waste industries need a predictable and stable market, which is best safeguarded through a common European regulatory framework where this is possible. And since Germany is a frontrunner in the implementation of the CO2 tax, the international market is best served by the EU pushing for the same tax in other European countries. When it comes to regulations, it would also be helpful to prevent all landfill of residual waste in Europe, once and for all.


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