On 4 March 2025 I had the honour to attend the Energy from Waste 2025 conference in London at the invitation of the organiser Julie-Pugh Cogh. Together with Jakub Bátor, CEO of ZEVO Krakow and member of the board of directors at KHK S.A. from Poland, we spoke in the Market Insight - Central Europe session. We described the market and political structure of Poland and the Czech Republic today. It was very informative to see how similar the issues are across Europe and how the different timing of the start of WtE projects has a big impact.
For example, for us it is quite automatic that the basic mantra for the feasibility of a new WtE is not only the marketability of the waste, but also sufficient heat extraction. In the UK, this rule is only now being put into practice. Indeed, until now, the primary purpose has been to dispose of waste, and waste has also, until recently, flowed from the UK to the northern states, where it has been used specifically for heating purposes. However, a change in foreign policy with the transfer of waste across the European Union has changed the situation quite a bit in recent years and has now resulted in the re-establishment of WEEE across the UK. This is already taking place with different considerations than was once the case.
The complexity of emission allowances for ZEVO
Interestingly, even after Brexit, the UK is still dealing with issues close to the EU. For example, how to deal with the EU ETS2. I am sure it has already come to your attention that emission allowances will now be paid even below 20 MWt. Not everyone knows, however, that in ETS 2, the allowance will not be paid for when the fossil fuel is burned, but already when the fuel is put on the market. For waste-to-energy, the issue is even more complicated. In what way?
As you can guess, waste is logically made up of two components - the young biogenic component - wood, paper, bio-waste, etc. and the phosgenic - mostly plastics. According to the current development of EU legislation,CO2 monitoring of waste-to-energy is valid until 2027 and then it is to be decided whether WEEE will also be included in the EU ETS 2. Logically, the amount ofCO2 produced from the energy recovery part of the phosgene would then be paid for. The determination of this proportion has been addressed for quite a long time - either by sampling the input waste or, more often, by determining the proportion of radioisotopes in the flue gas, which are characteristic of both waste fractions. We are in the technical, relatively well-studied part of the problem.
The million dollar question: at what point is the waste marketed as fuel?
And now we come to the political level. Let's stop right at the basic definition of EU ETS 2 - paying for an allowance at the moment the fuel is placed on the market. When is this point in time for waste? This is a purely theoretical question, as there is no exact answer. Let's go through the whole trajectory. At the beginning, we have a customer-driven demand for a product that is subsequently marketed and, in principle, gives rise to the first reason for waste. The product lives its life, it can be reused or recycled, but in principle it will one day end up at the limits of its quality and usability and therefore end up in a WEEE. Over time, the product repeatedly becomes waste and then becomes another product again and is effectively condemned to end its journey in a WEEE at the very beginning. At what point in time and with what level of responsibility is waste as fuel placed on the market?
Let's build on technical and economic foundations
One option is for the operator to pay the permit at the gate of the ZEVO. This means an increase in operating costs for waste disposal, which is still a notch better than landfill. Paying in this way effectively improves the position of the landfill system and the EU ETS 2 system, therefore, may work quite counterproductively within the waste sector.
Another option is to impose an allowance on the producer of the product under extended producer responsibility. But if the product is to be recycled, when and how much of the allowance is applied to whom?
I would like to say that there is a clear conclusion on this subject. Unfortunately, it is a purely political question, like many others that have strongly shaped the shape and very difficult predictability of the energy sector in recent years.
Therefore, here too, it is necessary to build on certain technical and economic foundations and to anticipate rationally what the future will bring. This is the strength of the ORGREZ Group.
Jan Krišpín, CEO of ORGREZ, a.s.