Investor Relations Presentation September 2008

Cautionary Statement Regarding Forward-Looking Statements This presentation includes forward-looking statements within the meaning of Section 27-A of the Securities Act of 1933, and Section 21-E of the Securities Exchange Act of Such statements include declarations regarding the intent, belief, or current expectations of the company and its management. Prospective investors are cautioned that any such forward-looking statements are not guarantees of future performance, and involve a number of risks and uncertainties that can materially affect actual results as identified from time to time in the company’s reports and registration statements filed with the Securities and Exchange Commission. Forward-looking statements provided herein as of a specified date are not hereby reaffirmed or updated.

Introduction to Covanta World’s largest owner/operator of Energy-from-Waste (EfW) facilities Business serves two key markets & addresses two key issues: –Waste Disposal Superior sustainable alternative to landfills; cleaner & preserves open spaces –Generation of Clean, Renewable Power Entire process results in net GhG reductions Complementary businesses include –Biomass and other renewable energy generation –Waste procurement and transfer stations

Key Investment Considerations Largest player in a growing niche (EfW) with high barriers to entry Contracted revenues provide predictable base business Increasing exposure to electricity pricing provides upside when fossil fuel prices rise Strong balance sheet and free cash flow generation support growth initiatives Stability and Growth: consistent operating performance coupled with increasing expansion and greenfield opportunities

How does EfW Work? Municipalities and others pay us to dispose of waste Technologically advanced facilities combust waste, our fuel, at high temperatures Resulting steam is either sold directly or used to make electricity for sale Metals are retrieved and recycled Ash residue is buried or recycled for use in construction and road building applications

Benefits of EfW Environmentally sustainable waste disposal –Most attractive solution after recycling –Waste volume reduced by 90% –Reduces landfill usage and long-haul transport Generates clean, reliable energy from renewable fuels –U.S. EPA states EfW: “produces electricity with less environmental impact than almost any other source” –Baseload power 24/7 Reduces greenhouse gas emissions; combats global warming –1:1 CO2 offset for each ton of waste processed Fewer fossil fuels burned: 1 ton of waste ≈ ¼ ton of coal –Methane from landfills: global warming capacity 20+ times CO2

Global Drivers for EfW Increasing waste generation – population growth & urbanization Landfill capacity constraints; legislative directives to reduce landfill usage Climbing fossil fuel prices; reserves being depleted Demand for renewable power generation Focus on energy security and diversity Growing attention to climate change; desire to reduce greenhouse gas emissions

Global Waste Management Recycling 0.5 Billion tons EfW 0.2 Billion tons Recycling 0.5 Billion tons Landfill 1.2 Billion tons U.S. ≈90 EfW facilities Western Europe ≈400 EfW facilities Asia ≈300 EfW facilities Landfill Recycling/ Composting EfW

Substantial Growth Potential Waste generation increasing with population and income growth Landfilling still the predominant disposal method –China: approximately 280 million tons –U.S.: approximately 250 million tons –UK and Ireland: approximately 50 million tons Reduce. Reuse. Recycle. Then recover waste to watts!

Covanta’s Competitive Advantages Operational Expertise –> 20 years experience; design, construction, operations & maintenance –Operate every commercially viable EfW technology –Since 1992, EfW boiler availability generally exceeds 90% –Senior & facility management: 17+ years average experience –Recipient of numerous environmental and safety awards Global presence; local experts and relationships Willingness and ability to commit capital Strong track record of successful public/private partnerships

Growth Strategy Maximize long-term value of existing portfolio –Extend contracts for operation and waste delivery –Implement productivity enhancements –Facility expansions Acquisition and greenfield development : –North America – EfW, renewable energy & complementary businesses –Europe – primarily EfW; focus on UK and Ireland –Asia – primarily EfW; focus on China R&D – Invest in new technologies

U.S. – ≈85% of CVA Revenues Handle over half of U.S. EfW volume (16 of 30 million tons) or 5% of post- recycled MSW Produce almost 10% of America’s non-hydro renewable electricity – enough to power over a million homes Operate in 18 states (assumes ME acquistion closes), concentrated in the densely populated Northeast 35 EfW; 8 biomass (assumes ME acq. closes), 4 landfill gas facilities & 2 hydro Covanta EfW Facility Locations by StateAnnual Tons Processed by State

U.S. - Strong Fundamentals Waste Disposal –Recession resistant, non-cyclical business ; historical long-term growth rate of ≈3% –Rising prices due to capacity constraints & barriers to entry –Higher diesel costs and state landfill tax make long-haul disposal less attractive Power Production –Rising prices due to higher demand & higher fossil fuel prices; –Energy security concerns Energy-from-Waste - Opportunities for new capacity re-appearing –Growing interest in integrated waste management and renewable energy –Concern with global warming and reducing carbon footprint Source: EPA Average PJM Electricity Price Trends Source: EPA Note: PJM (Pennsylvania, New Jersey, Maryland grid) – East Zone (LMP) Source: PJM Day-Ahead Spot Market Price YTD data through August.

Typical U.S. EfW Contract Structures Waste disposal contracts are structured as either “tip fee” or “service fee” –Service fee facilities can be owned and operated by Covanta or just operated –Prefer longer term contracts to ensure “fuel” supply Energy revenue traditionally under long-term contract; portfolio shifting to shorter term EfW projects generally financed with municipal bonds –Project debt usually paid over term of waste disposal contract (≈ 20 years) –Service fee contracts include debt service payments –Debt free facilities after initial contract period Facilities by Contract Type

North American Initiatives Contract roll-overs; potential energy revenue upside –Indianapolis and Hempstead Expansions of existing facilities –Florida and Hawaii Pursuing greenfield projects –Vancouver –Toronto –Maryland M&A Activities –Tulsa –Maine biomass facilities –Transfer stations

U.S. Energy Policy Federal and numerous state laws considers EfW a renewable energy source Still no comprehensive U.S. renewable energy or climate change policy –Potential upside if EfW included in Federal renewable energy portfolio standards –Exemption from carbon caps would provide business advantage over fossil fuels –Recognition of GhG offsets would offer substantial upside

Growth Drivers - Europe Widespread acceptance of EfW is creating opportunities EU Landfill Directive: supports EfW, disincentives for landfilling –Reduce landfilling of biodegradable MSW by 65% from 1995 disposal levels by 2020 U.K. and Ireland – Significant efforts needed to meet EU regulations –U.K. environmental agency (DEFRA) estimates EfW will need to increase from 9% of waste disposal to 27% by 2020 –U.K. market – expect 10 million tons of new EfW capacity to be required –High market tip fees (>$100 per ton of MSW) and electricity rates Additional opportunities in continental Europe

UK/Ireland Initiatives Dublin: 1,700 tpd facility – construction expected to begin near end of 2008 UK – Large number of municipalities considering projects –Currently, short listed on several –Additional opportunities are unfolding each year Covanta Infrastructure Preparedness –Office in Birmingham being expanded to meet heightened level of activity –Employing locals with local expertise and valuable relationships Artist’s Rendering - Dublin

Growth Drivers – Asia/Pacific China: significant opportunity – cities with population of 1 million + –Annually generating 280 million tons of waste (similar to U.S. market) –Approximately 2.0% of waste was converted to energy in 2005 –National Plan: 30% of waste to be channeled to EfW by 2030 –Estimates predict 50 million tons of new EfW capacity to be built by 2020

China Initiatives Pursue bid opportunities with strong local partners –JV’s with Chongqing Iron & Steel and Guangzhou Development Group –Currently own stakes in two 1,200 tonnes per day EfW facilities via JV’s –Recent contract award for new 1,800 tonne per day facility in Chengdu SanFeng – Covanta Tongxing EfW Plant – Chongqing, China

Attractive Economics Stable business model –Long-term contracted revenue stream –Credit-worthy clients – municipalities and utilities High margins and low capital expenditure requirements –Annual maintenance capex: ≈ $60 million (4% of revenue) Strong operating cash flow to fund growth (1) –2008 operating cash flow guidance: $380 to $420 million –2008 scheduled project debt amortization of $167 million (with approximately $20 million funded from restricted cash) Strong balance sheet –Borrowing power increasing as facilities become debt-free (1) As of July 29, This information is not being reaffirmed or updated as of the current date.

Financial Summary 2007 YTD YTD Revenues $1.43 billion$685 million $812 million Adjusted EBITDA (1) $549 million$245 million$268 million Operating Cash Flow$358 million$146 million$160 million Net Income $131 million$19.8 million$59.6 million Diluted EPS $0.85$0.13$0.39 (1) Non-GAAP financial measure – Please see second quarter press release for discussion of use of Non-GAAP financial measures and calculation of Adjusted EBITDA.

Consistent Financial Performance and Growth Revenues

Consistent Financial Performance and Growth Operating Cash Flow (1) (1)Operating Cash Flow is defined as the GAAP measure cash flow provided by operating activities. (2)Includes the results for Covanta ARC Holdings from June 25, 2005 through December 31, (3)As of July 29, This information is not being reaffirmed or updated as of the current date Guidance: $380-$420 million (3)

Consistent Financial Performance and Growth Adjusted EBITDA (1) 2008 Guidance: $550-$575 million (3) (1)Please see second quarter press release for discussion of use of Non-GAAP financial measures and calculation of Adjusted EBITDA. (2)Calculated for Covanta Energy Corporation. (3)As of July 29, This information is not being reaffirmed or updated as of the current date.

Computation of Adjusted EBITDA (In millions) Full Year 2007YTD Estimated 2008 Net Income$131$60 $140 - $155 Depreciation and amortization expense Debt service Income tax expense EBITDA470$244$519 - $538 Adjustments for non-cash items – 30 Loss on extinguishment of debt3200 Minority interests94 7 Adjusted EBITDA (1) $549$268 $550 - $575 (1) As of July 29, This information is not being reaffirmed or updated as of the current date. Please see second quarter press release for discussion of use of Non-GAAP financial measures and calculation of Adjusted EBITDA.

Reconciliation - Cash Flow: Adjusted EBITDA (In millions) Full Year 2007 YTD Full Year Estimated 2008 Cash Flow Provided by Operating Activities$358$160$380 - $420 Debt service – 92 Amortization of debt premium and deferred financing costs1147 Other Adjusted EBITDA (1) $549$268$550 - $575 (1) As of July 29, This information is not being reaffirmed or updated as of the current date. Please see second quarter press release for discussion of use of Non-GAAP financial measures and calculation of Adjusted EBITDA.

Key Investment Considerations Largest player in a growing niche (EfW) with high barriers to entry Contracted revenues provide predictable base business Increasing exposure to market electricity pricing provides upside when fossil fuel prices rise Strong free cash flow generation and balance sheet support growth initiatives Stability and Growth: consistent operating performance coupled with increasing expansion and greenfield opportunities