The little Basque village of Zubieta has an unlikely talent for a place its size: This community of 300 souls can make the trash of half a million people vanish into thin air.

Each year, as much as 200,000 metric tons of waste from across northwestern Spain is trucked to the Gipuzkoa treatment plant on the edge of the village. There it is sorted and fed into a giant incinerator, generating enough electricity to power 45,000 homes.

The Gipuzkoa plant was meant to be an eco-friendly alternative to landfill, but it’s backfiring. Locals have accused the plant’s owners and the regional government of violating European Union environmental laws and releasing hazardous levels of pollution into the surrounding water, air and soil. It’s even spurred a criminal court case.

“The court has to decide if the environmental permit [granted by the local government] is in accordance with [the] EU directive on pollution,” says Joseba Belaustegi Cuesta, a member of the grassroots GuraSOS movement that is campaigning against the incinerator.

Gipuzkoa is not a one-off. Across Europe, hundreds of waste-to-energy facilities have mushroomed over the years, built on the promise that burning trash to generate electricity is better for the environment than burying it in a landfill.

But studies increasingly find that the pollution generated by these facilities also harms the environment and people’s health. The EU, meanwhile, has massively reduced funding for such projects, while municipalities are still repaying the debt they accrued to fund them.

At best, critics say, waste-to-energy plants risk becoming unpopular relics of a misguided waste policy. At worst the existing debt-funded plants could become “stranded assets” that struggle to find enough trash to burn to ensure they remain commercially viable.

Gipuzkoa itself was financed with €80 million worth of bonds whose repayment date is 2047. The plant, in other words, needs to keep running for another two decades — regardless of the environmental cost.

Belaustegi Cuesta complains that the incinerator now imports “residues that [are] not even household residues” to feed itself.

French asset manager Meridiam, the biggest shareholder in the Gipuzkoa plant, did not respond to POLITICO’s request for comment.

Europe’s waste problem

Some 500 waste-to-energy plants operate on EU soil today and burn around a quarter of Europe’s everyday trash, according to waste-to-energy lobby CEWEP.  

Plant operators and their investors say these furnaces are essential if Europe wants to meet its goal of sending less than 10 percent of household waste to landfills by 2035.

In 2022 Europeans generated roughly 190 million metric tons of household waste, according to data from Eurostat, Brussels’ statistical office.

Despite recycling roughly 40 percent — more than any other region — the EU still buries a big chunk of its trash. More than 50 million metric tons of municipal waste were sent to landfills in the EU in 2023, enough to cover central Paris with a 20-meter pile of garbage. 

Waste-to-energy is considered a slightly cleaner alternative: About 58 million metric tons were incinerated in 2023, nearly all of which was used to make energy, EU data shows. EU laws on waste require companies to prioritize reuse and recycling over waste incineration and landfilling.

“The main objective of a waste-to-energy plant is not to produce energy; its primary purpose is to manage waste that cannot be recycled,” explained Patrick Dorvil, senior economist in the circular economy division of the European Investment Bank.

The power generation benefits are often what the waste-to-energy lobby advertises when promoting the technology, however. 

“With one week of your household’s residual waste, you have enough heat to warm your home for at least 8 hours,” CEWEP writes in its 2025 brochure. The lobby also claims that about 10 percent of district heating in Europe comes from energy made by burning waste, and that the technology contributes to renewable energy generation and landfill diversion. 

Pollution concerns

But green groups say it’s a mistake to think waste-to-energy is a cleaner source of energy than fossil fuels. Poorly sorted municipal waste often means that a lot of fossil fuel-based plastic gets burnt, releasing planet-warming CO₂ in the process. 

“The argument that burning waste is better than landfilling oversimplifies a complex issue. Both practices have serious environmental impacts and neither should be seen as a viable long-term solution,” said Janek Vahk, senior policy officer at Zero Waste Europe. The NGO estimates that each metric ton of municipal waste that is burned releases between 0.7 and 1.7 metric tons of CO₂.

Scientists, meanwhile, warn that insufficient research has been conducted on the dangers faced by people living near incinerators. Plant operators insist that technological solutions and proper sorting can keep that pollution under control. But these concerns have not gone unnoticed, and popular backlash against waste incinerators is growing.

In Rome, for example, tens of thousands of people signed a petition to stop the mayor from greenlighting a waste incineration project in Santa Palomba. And last March, French senators proposed to ban the construction of new waste incinerators in the country.

The pollution concerns have led the EU to reduce its financial support for waste-to-energy plants and to introduce policy obligations meant to steer EU countries toward recycling. 

Over the years, Brussels has introduced strict environmental conditions that projects must meet to receive EU funding. This has significantly reduced the amount of public funds allocated to waste incineration compared to larger sums earmarked for greener projects such as recycling plants. 

Back in 2020, the technology’s carbon footprint was ultimately what prompted Brussels to exclude waste-to-energy plants from its list of eligible green projects. The list, called the EU taxonomy, tells investors what counts as a sustainable investment. 

Meanwhile, local governments are stuck, environmental NGOs argue, with many still paying off the debt they accrued when agreeing to build the sites. “Many of these installation plans would turn out to be obsolete,” says Anelia Stefanova, energy transformation area leader for CEE Bankwatch, since EU countries are expected to meet waste reduction and recycling targets enforced by EU laws.

Stranded assets

As countries move toward greener waste management systems, the risk is that these large infrastructure projects could become useless.

Many waste-to-energy plants already require more trash than tends to be available in the surrounding area. In Copenhagen, for example, the city’s infamous ski slope incinerator — itself financed through a 30-year loan —  imports tens of thousands of tons of waste from abroad annually to feed its furnaces.  

Denmark has an “overcapacity in the incineration sector of up to 700,000” metric tons, according to its climate and energy ministry. The country is already budgeting to cover the costs of unnecessary waste incinerators.

In 2020, Denmark introduced a plan to green the waste sector, which included allocating 200 million Danish kroner (€26 million) to municipalities to cover “stranded costs.”

Lenders, including the EU’s official lending arm the European Investment Bank, are also acutely aware that the policy landscape has moved away from supporting the technology unconditionally.

“Everything financed by the EIB must comply with EU directives. We are not policymakers; we are policy takers,” said the EIB’s Dorvil, adding that there have been plenty of cases where the bank has refused funding for financial or environmental reasons.

Still, new waste-to-energy plants are in the works. 

“When there are no incineration facilities then there [are] bigger landfills,” insists Hanna Zdanowska, mayor of the Polish city of Łódź. The city will soon have a new waste-to-energy plant planned by French energy company Veolia and paid for with a €97 million loan from the European Bank for Reconstruction and Development. 

Zdanowska says the plant will increase the city’s “energy independence, which is also very important right now.”

The EU’s Modernisation Fund is one of the last funding programs that still pays for waste-to-energy; it aims to help lower-income EU member countries transition their energy sectors away from fossil fuels. The €19 billion cash pot has poured just shy of €2 billion into waste-to-energy projects since its inception in 2021, all of them in Czechia and Poland.

Asked if there’s a risk the new incinerator could become a stranded asset, Zdanowska said she “would love to have such a scenario that we really produce less waste in the future.”  

“When the amount of waste goes down in the future and recycling goes up, then probably only a couple of plants will be left in the area and they will not limit themselves to collecting waste only from the city but they will expand their area for the whole region.”