The world population maintains a growing trend and in turn, the amount of municipal waste is also increasing. Rising municipal waste quantity poses a challenge for human beings and the environment, therefore recycling becomes important for environmental sustainability and circular economy. This study explores the effects of municipal waste recycling and renewable energy on the environment sustainability proxied by CO2 emissions in EU member states over the period from 2004 to 2017 through panel cointegration and causality analyses. Recycling is considered an efficient way to reduce CO2 emission, but surprisingly our results indicate mixed findings. The causality analysis revealed no significant interaction among recycling rate, renewable energy and CO2 emissions. However, in the long run, the negative impact of recycling and renewable energy use on CO2 emissions were revealed but varied among the countries. Results indicate that increasing renewable energy consumption will play a significant role in reducing greenhouse gas emissions. These findings must raise awareness among policymakers that should focus on the adoption and implementation of different types of sustainable energy policies that can affect directly or indirectly renewable energy sector development.