FEAD position paper on the guidance for applying the ‘do no significant harm’ principle under the 2028-2034 multiannual financial framework

FEAD, the European Waste Management Association, appreciates the opportunity to comment on the application of the ‘do no significant harm’ (DNSH) principle in the next multiannual financial framework (MFF). FEAD welcomes that the call for evidence clarifies that the DNSH principle under the Taxonomy and the next MFF have different legal basis, objectives, scope and design features. However, as broad consistency should be sought where feasible, the forthcoming guidance under Article 5 of the Performance Regulation provides an important opportunity to clarify the application of the DNSH for non-hazardous waste incineration activities. Problematic interpretations have been previously made by the European Commission in what concerns Article 17(1)(d) of the Taxonomy Regulation (TR) in combination with Article 13(1)(j), for example in the Technical guidance on the application of ‘do no significant harm’ under the Recovery and Resilience Facility Regulation (Commission Notice C/2023/111). FEAD strongly objects to such misinterpretation and misapplication of the DNSH principle on the circular economy and calls for the following clarifications to ensure coherence of the MFF with the EU acquis and effectiveness in reaching EU objectives.

Need for guidance in the application of the DNSH principle

FEAD believes that the following clarifications are needed:

1. A distinction must be made between waste incineration as a recovery activity and waste incineration as a disposal activity. Following this, it must be ensured that, if the activity complies with the waste hierarchy, it does not contradict the environmental objectives of the EU Taxonomy, in particular the transition to a circular economy (see legal analysis by PWC).
2. Not any increase in waste incineration capacities (as a recovery activity) can be considered a ‘significant increase’. To assess if an increase in capacity is ‘significant’, quantitative information (what is the current capacity?) as well as information on the type of waste (non- recyclable waste, waste containing substances of concern, rejects from recycling, …)  is needed.
3. Particular attention must be drawn to Article 17(2) of the Taxonomy Regulation. An increase in waste incineration can never per se be regarded as significantly harmful to the transition to a circular economy. The assessment of the DNSH criteria must always be performed by means of a life cycle assessment, taking into account the activity itself, and other activities that are avoided.

The clarifications exposed above must be consistently applied across EU legislation when referring to the DNSH principle.

Background information and rationale

The Taxonomy Regulation provides that an activity qualifies as contributing substantially to the transition to a circular economy, including waste prevention, re-use and recycling, where that activity ‘minimises the incineration of waste and avoids the disposal of waste’ (art. 13.1(j)). The text also describes activities ‘significantly harming’ the circular economy (art. 17.1 (d)) as those leading to a ‘significant increase in the generation, incineration or disposal of waste, with the exception of non-recyclable hazardous waste’. The term waste incineration is not defined in the Taxonomy Regulation, and the Regulation does not distinguish between waste incineration for recovery and waste incineration for disposal. However, a clear difference exists between recovery (R1 waste-to-energy) and disposal (other incineration), and they fall under different sections of the waste hierarchy.

FEAD is fully aware of the interpretative challenges that these two provisions pose, particularly, in relation to:

1. What is to be understood under ‘waste incineration’ in the Taxonomy Regulation;
2. What is to be understood under a ‘significant increase’ in the Taxonomy Regulation.

Need to clarify what is ‘waste incineration’

Regarding the interpretation of ‘waste incineration’, FEAD already commissioned a legal analysis to the consultancy PricewaterhouseCoopers in 2020^[1]. The document says that ‘the different meaning of waste incineration suggests that it can also have different impacts on the circular economy and must therefore be assessed differently in terms of sustainability’. After interpreting the concept of ‘waste incineration’ from a grammatical, historical, systematical and teleological point of view in the Taxonomy Regulation, the analysis determines that a distinction must be made between waste incineration as a recovery activity – which is the preferred option for the treatment of residual, non-recyclable waste, and waste incineration as a disposal activity. If the activity complies with the waste hierarchy, it does not contradict the environmental objectives of the EU Taxonomy, in particular the circular economy.

Need to clarify what is ‘a significant increase’

Regarding the interpretation of a ‘significant increase’, FEAD is deeply concerned that the construction of any new WtE plant is considered a ‘significant increase’, thus creating a significant harm to the circular economy. Such an interpretation can be seen, for example, in the Technical guidance on the application of ‘do no significant harm’ under the Recovery and Resilience Facility Regulation (Commission Notice C/2023/111), where it says that ‘the construction of new waste incinerators to increase the existing incineration capacity in the country leads to a significant increase in the incineration of waste, which does not fall under the category of non-recyclable hazardous waste. Therefore, it is in direct breach of Article 17(1)d(ii)’. To assess if an increase in capacity is ‘significant’, quantitative information (what is the current capacity?) is needed. In addition, to determine that the ‘measure hampers the development and deployment of available low-impact alternatives with higher levels of environmental performance (e.g. reuse, recycling)’, information on the type of waste (non-recyclable waste, waste containing substances of concern, rejects from recycling, …) is essential. A definition of ‘non-recyclable’ is needed based on technical feasibility and economic viability of recycling.

Today, public and private investors (who are often also owners of recycling and other waste treatment facilities, as many FEAD member companies), have the right tools to make safe and sustainable investments and have solid information and predictability on what is and will be available as feedstock. Responsible capacity planning ensures that no ‘locked-in effects’ occur and that all waste streams are managed in the way that they provide the best environmental outcome, including for residual, non-recyclable waste. FEAD suggests several points to be assessed to determine the inclusion of waste-to-energy in the EU Taxonomy, which include the fact that new WtE facilities do not increase the total capacity of residual waste treatment. This means that new plans would either replace an existing landfill for non-hazardous waste, especially in MS that are not in line with the Landfill Directive, or replace or upgrade an existing WtE plant. Concrete proposals have been submitted via the EU taxonomy stakeholder request mechanism.

Need to guarantee investments in waste management

In average, the EU landfilled 30% of its waste in 2022.[2] This includes ca. 51 million tonnes/y of municipal waste (2023 data)[3]. Not all this waste can be diverted from landfill to recycling and the same recycling operations also generate non-recyclable residues. As an example, approximately 40–50% of the waste treated in Dutch Waste-to-Energy plants consists of residues from sorting and recycling activities.

Whereas the average landfilling rate for municipal waste in the EU stood at 22% in 2023, the waste early warning report[4] showed significant differences across the EU. In 2020, eight Member States still landfilled over 50% of municipal waste, with three of them reporting rates above 70%. In total, there are 13 MS still far from the current target of a maximum of 10% of landfilling of municipal waste to be reached by 2035. This data reflects many countries, in particular eastern and southern ones, having a lack of alternatives to landfilling to treat their residual and non-recyclable, non-hazardous waste with energy recovery. Member States that comply with the waste hierarchy and are fully aligned with the goals of the Landfill Directive are those who invested in their waste- to-material and waste-to-energy capacities. In fact, waste management is an integrated activity where different activities are required to treat the waste. WtE is part of such an integrated approach, as a complement to recycling, and has an important hygienic task for our society, treating waste that is not suitable for recycling and residues from recycling, ensuring that material cycles are clean from pollutants and contaminants and preventing landfilling of waste.

It is evident that some European countries still operate with a significantly weaker waste-management infrastructure, particularly in terms of recycling capacity, treatment technologies, and the availability of compliant waste-to-energy facilities. Closing this gap is essential and requires urgent action, especially because environmental permitting procedures in the region are often extremely slow — in some cases lasting up to 12 years — which severely delays investment cycles and undermines the ability to meet EU waste and circular economy targets.

Poland illustrates the scale of this structural problem. Due to insufficient treatment capacity, large volumes of waste — especially mixed, combustible and low-value streams — cannot be physically processed within the formal system. As a consequence, the grey market expands, illegal operators emerge, and uncontrolled dumping sites proliferate. Between 2017 and 2022, Poland recorded 754 fires at legal and illegal waste-storage locations, many of them linked to abandoned or illicit dumps. The environmental risk is immense: the combustion of a single illegal waste site can release pollutant loads comparable to up to eight years of emissions from all municipal waste-to-energy plants operating in Poland. This demonstrates that the absence of sufficient, regulated infrastructure not only weakens compliance with EU waste law but also results in far higher real-world environmental impacts than would occur under a properly permitted treatment system.

Need to align the DNSH principle with the EU acquis

The forthcoming guidelines on the application of the DNSH should better align DNSH for non-hazardous waste incineration activities with the EU acquis. In particular, Waste-to-Energy technologies contribute to increasing the share of energy produced through renewable sources. The incineration of biogenic waste, which accounts for up to 50% of mixed municipal waste, is a renewable energy source under the Renewable Energy Directive (EU) 2023/2413 (RED III). Hence, such an activity even contributes to the major environmental and climate objectives of the EU, with the overarching aim of climate neutrality by 2050. As foreseen by the current BAT, modern waste-to-energy plants ensure high energy efficiency performances. When it comes to plants generating electricity only, efficiency can reach more than 30%. When co-generation is applied, producing both electric and thermal energy for district heating and industrial facilities, efficiency can go beyond 80%. Furthermore, the most recent gas treatment technologies can ensure an efficiency close to 100%. The 2022 Guidelines on State Aid for climate, environmental protection and energy stress that efficient district heating and cooling systems using waste as input fuel positively contribute to environmental protection. Thus, these publications clearly outline the positive environmental and climate impacts of thermal recovery of waste, in contrast to the wording of the Taxonomy Regulation.

Conclusion and sector experience

The ‘do not significant harm’ principle is a powerful tool to drive investments towards the green transition and FEAD is committed to the EU climate goals. However, considering the huge impact that the DNSH principle will have in directing financial flows in the EU, its interpretation and application must be carefully assessed and justified. As an example, an investment in a new flue treatment facility at the WtE plant in Brescia (Italy) shows how the DNSH principle is hampering a more efficient use of energy and resources, the reduction of GHGs emissions and the achievement of better environmental performances. The new technology installed enables the generation of heat for 12,500 additional households for the same amount of waste treated, raising the plant’s efficiency rate from 84% to 98%. Nevertheless, due to the misinterpretation and misapplication of the DNSH for non-hazardous waste incineration activities, the investment is not yet aligned with the European Taxonomy because it is part of a WtE facility.

[1] https://fead.be/wp-content/uploads/2022/07/20200911_Legal_Analysis_Regulation_2020-852_final_EN.pdf

[2] https://ec.europa.eu/eurostat/statistics-explained/index.php?title=Waste_statistics&Waste_treatment#Waste_treatment

[3] https://ec.europa.eu/eurostat/statistics-explained/index.php?title=Municipal_waste_statistics&oldid=627217

[4] https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=COM%3A2023%3A304%3AFIN&amp%3Bqid=1686220362244er waste sources as well as Union recycling capacity;’

FEAD, the European Waste Management Association, represents the entire waste management value chain, from collection and sorting to recycling, energy recovery, and final disposal. It brings together the private waste and resource management industry across Europe through its 21 national member associations and associate members, which collectively represent over 3,000 companies. Together, the sector provides more than 500,000 local jobs and fuels €5 billion in investments into the economy every year. For more information, please contact: info@fead.be