JANUARY 2, 2007 - COVANTA ANNOUNCES START OF DESIGN AND CONSTRUCTION OF HILLSBOROUGH COUNTY, FLORIDA WASTE-TO-ENERGY FACILITY EXPANSION

Expansion will increase the facility's capacity to provide the citizens with a climate-friendly alternative for their waste and energy needs

FAIRFIELD, NJ, January 2, 2007 - Covanta Energy Corporation, a subsidiary of Covanta Holding Corporation (NYSE: CVA), announced it has received authorization from Hillsborough County to commence design and construction of a 50 percent capacity expansion of the Hillsborough County, FL Solid Waste-to-Energy Facility located near Brandon, FL.  The 600 ton per day (TPD) capacity expansion to the existing County-owned 1,200 TPD waste-to-energy facility will be built and operated by Covanta Hillsborough, Inc., an operating subsidiary of Covanta Energy Corporation.

Covanta will oversee the design, construction and start-up of the expansion.  Under the terms of the extension operations and management agreement, Covanta will operate both the expansion and the original facility, which Covanta has been successfully operating since 1987, for another 20 years.  The facility serves as an integral component of the comprehensive solid waste management plan of Hillsborough Country.  As outlined in the terms of the extension agreement, Covanta will operate and maintain the expanded facility though 2027 to deliver County residents with environmentally-sound waste disposal and clean, renewable energy.
 
"We look forward to continuing our long-standing partnership with Hillsborough County as we work to complete the expansion of this facility.  The County's decision to expand reinforces the strategic role waste-to-energy plays in recovering energy and materials from the waste stream to further reduce reliance on landfilling.  Covanta recognizes that climate change is a real and growing challenge, and data has shown that modern waste-to-energy facilities such as this one reduce green house gas emissions by preventing methane production from waste landfills and offsetting the use of fossil fuels for energy production," said Anthony J. Orlando, President and Chief Executive Officer of Covanta. 

About Covanta Holding Corporation:
Covanta Holding Corporation is a New York Stock Exchange listed company engaging in waste disposal, energy services and specialty insurance through its subsidiaries.  Covanta's subsidiary, Covanta Energy Corporation, is an internationally recognized owner and operator of waste-to-energy and power generation projects.  Covanta Energy's waste-to-energy facilities convert municipal solid waste into renewable energy for numerous communities, predominantly in the United States.

CAUTIONARY NOTE REGARDING FORWARD LOOKING STATEMENTS
Certain statements in this press release may constitute "forward-looking" statements as defined in Section 27A of the Securities Act of 1933 (the "Securities Act"), Section 21E of the Securities Exchange Act of 1934 (the "Exchange Act"), the Private Securities Litigation Reform Act of 1995 (the "PSLRA") or in releases made by the Securities and Exchange Commission, all as may be amended from time to time.  Such forward looking statements involve known and unknown risks, uncertainties and other important factors that could cause the actual results, performance or achievements of Covanta and its subsidiaries, or industry results, to differ materially from any future results, performance or achievements expressed or implied by such forward-looking statements.  Statements that are not historical fact are forward-looking statements.  Forward looking statements can be identified by, among other things, the use of forward-looking language, such as the words "plan", "believe", "expect", "anticipate", "intend", "estimate", "project", "may", "will", "would", "could", "should", "seeks", or "scheduled to", "proposed", or other similar words, or the negative of these terms or other variations of these terms or comparable language, or by discussion of strategy or intentions.  These cautionary statements are being made pursuant to the Securities Act, the Exchange Act and the PSLRA with the intention of obtaining the benefits of the "safe harbor" provisions of such laws.  Covanta cautions investors that any forward-looking statements made by Covanta are not guarantees or indicative of future performance.  Important assumptions and other important factors that could cause actual results to differ materially from those forward-looking statements with respect to Covanta, include, but are not limited to, those factors, risks and uncertainties that are described in Item 1 of its Annual Report on Form 10-K for the year ended December 31, 2004, as amended, and in other securities filings by Covanta or its subsidiaries.

Although Covanta believes that its plans, intentions and expectations reflected in or suggested by such forward-looking statements are reasonable, actual results could differ materially from a projection or assumption in any forward-looking statements.  Covanta's future financial condition and results of operations, as well as any forward-looking statements, are subject to change and inherent risks and uncertainties. The forward-looking statements contained in this press release are made only as of the date hereof and Covanta does not have or undertake any obligation to update or revise any forward-looking statements whether as a result of new information, subsequent events or otherwise, unless otherwise required by law.

For more information generally, please contact:
Derek A. Porter
703-370-7722

FOR Covanta Holding Corporation
Gavin Bell
973-882-7107