Industry critical as EU set to introduce plastics tax

An EU plastics tax has been announced by the European Council as part of its €750-billion coronavirus recovery fund agreement.

A tax of €0.80 per kilogramme, or €800 per tonne, will be placed on non-recycled plastic packaging waste and will come into effect from 1 January 2021. The tax will be paid by member states into the EU’s general budget.

While the tax has been described by the European Commission as a “contribution to the EU budget designed to incentivise member states to increase recycling from plastic waste”, it has faced criticism from European plastics converters for precisely this reason.

The trade association for European plastics converters, EuPC, has warned that the tax might have the opposite effect. Managing Director of EuPC, Alexandre Dangis, explained: “As the revenues of the EU plastic tax are not earmarked to be invested into the waste and recycling infrastructure, it will not increase the recycling of plastic waste in Europe.

”Instead, it will further increase the cost of plastic recycling and encourage the shift to other packaging materials with a bigger environmental impact. To truly increase recycling rates across Europe and protect the environment, taxation of the landfilling of plastic packaging waste would be more efficient.”

Unlike the UK’s Plastics Tax, which targets plastic packaging containing less than a minimum 30 per cent recycled content, the EU’s proposed plastics tax targets plastic packaging waste -- EU member states will be expected to make national tax contributions based on the weight of unrecycled plastic packaging in their country every year.

Regarding EuPC’s proposal of a tax on landfilling plastic packaging waste as an alternative to the EU’s plastics tax, Janek Vahk, Development and Policy Coordinator at Zero Waste Europe, expressed scepticism over the effectiveness of such a proposal, warning that it could instead incentivise incineration as an alternative to landfill, rather than boosting recycling investment.

“The experience shows that measures focused on limiting landfilling rather than limiting generation of residual waste often cause distorted effects that deviate from the circular economy agenda, in particular in those member states where infrastructural plans for the effective management of residual waste and related investments are still being defined,” said Vahk.

He added: “The requirement to tax plastic waste landfilled would likely compel planning and funding capacities aimed at burning plastics rather than reduction, redesign and recycling. To actually drive reduction in plastic production, use and pollution, and to support the redesign of products and systems, any taxation on plastic should focus upstream rather than downstream the value chain.

“For example, a tax on virgin plastic resins would allow recycled content to be more competitive. The proposed contribution on non-recycled plastic packaging waste will only contribute to change if it is implemented in a way that pushes producers to redesign their packaging to ensure their reusability and then recyclability.”

The plastics tax comes as part of the European Commission’s Recovery Plan for Europe, published in May, which reaffirmed the EU’s commitment to a circular economy transition after the Covid-19 pandemic.

Alongside the €750-billion coronavirus package, the recovery fund also reinforces the EU’s long-term budget for the period 2021-27. Other aspects of the fund involve decreasing Europe’s dependency on foreign materials by preventing waste, boosting recycling and increasing the use of secondary raw materials.

The EU intends to recover the revenues given to member states through a digital tax, a carbon border adjustment, a revised Emissions Trading System and a Financial Transaction Tax, among other policies.

The tax is the latest example of the EU’s drive to reduce plastic waste, with the EU’s Plastics Strategy aiming to create secondary markets for recycled plastic, the Single Use Plastics Directive banning certain problematic single-use plastic products, and the recent Circular Economy Action Plan proposes minimum recycled content requirements and a policy framework for the use of biodegradable plastics.