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Is new plastic tax a danger to the EU common market and recovery?

Levy on non-recycled plastic packaging waste may not be good for recycling, according to EU Plastics Converters

Is new plastic tax a danger to the EU common market and recovery?

With its latest agreement on the new Multiannual Financial Framework (MFF) and coronavirus recovery fund, the European Council has approved the implementation of a plastic tax as of the 1st of January, 2021. The plan foresees a €0.80/kg levy on non-recycled plastic packaging waste to be paid by member states into the EU budget.

While the tax has been presented by the European Commission as "contribution to the EU budget designed to incentivise member states to increase recycling from plastic waste," the European plastics industry is warning that it might have the opposite effect. Further fiscal measures are not the most efficient tool to drive innovation and investments that are needed to meet the intended policy objectives of the Green Deal.

"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," said EuPC Managing Director Alexandre Dangis. "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."

Improving the recycling of plastics packaging requires considerable investment by the entire plastics value chain in innovation, new machinery, and the ecological design of plastic packaging. With expected revenues of around €6-8 billion per year flowing into the general budget of the EU, this money would not be available anymore to be invested in the transition towards a circular economy.

As a next step, further details on the tax will have to be worked out in a specific law and approved by the European Parliament and Council of the EU. While much of the details remain obscure up to now, member states will have large freedom in the implementation of the measures to collect the funds to be transferred to the EU. The implementation and complexity of different schemes from country to country will lead to a host of heterogeneous measures that will impact the single market.

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