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  1. Analysis
July 22, 2020

EU introduces plastic waste tax as part of Covid-19 recovery plan

EU leaders have introduced a levy on plastic waste starting January 2021 which will contribute towards the EU’s €750bn Covid-19 recovery package and its overall €1tn 2021 to 2027 budget.

By Jessica Paige

The levy will see non-recycled plastic packaging waste calculated at a call rate of €0.80 per kilogram. The document announcing the plastic waste tax does not specify whether the income generated from the levy is categorised as a new tax.

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The document from the General Secretariat of the Council to Delegations said: “As a first step, a new resource will be introduced and apply as of 1 January 2021 composed of a share of revenues from a national contribution calculated on the weight of non-recycled plastic packaging waste with a call rate of EUR 0.80 per kilogram with a mechanism to avoid excessively regressive impact on national contributes.”

Response from governmental officials

German state secretary for the environment Jochen Flasbarth said: “The agreement contains clever new instruments that will help us to make Europe more environmentally friendly. The new plastic levy is a strong motivation for member states to massively expand their recycling systems. It will depend on a concrete design that it is as unbureaucratic as possible and leads to less plastic waste.”

German federal environment minister Svenja Schulze said: “With this agreement, the EU is demonstrating its ability to act. For climate protection, the agreement provides a good basis on which we can build on in further legislation. There has never been so much climate protection in an EU budget. Europe will emerge from [Covid-19] stronger and more climate-friendly than when it came in.”

Response from experts in the industry

Online environmental activist Planet Shine founder and sustainable business advisor Rachel McClelland told Packaging Gateway: “This is a positive move if it begins to shift the market but, above all, we urgently need to reduce plastic waste and move towards a global circular economy. I hope that the proposed tax drives behaviour change and encourages industries to analyse their supply chains and rethink their business models throughout Europe and in the UK.”

UK-based recycling expert Vanden Recycling MD David Wilson told Packaging Gateway: “This is an interesting twist on the usual approach of setting a recycling target with punishment for not meeting it. Instead, this is a penalty for the total amount left unrecycled. Questions, of course, remain at this early stage. This tax will be levied on nations and be payable to the EU. What impact that will actually have on recycling behaviours will depend on each nation’s implementation on clawing it back from their individual and business taxpayers.

“These are significant sums too. For example, if the UK was staying in the EU, and assuming it met this year’s recycling target, the cost of the tax on the remaining unrecycled content would be €368M. That’s significantly more than the likely total cost of plastics producer responsibility this year.”

The plastic waste tax is “way too timid”

German environmental group Environmental Action Germany (DUH) has welcomed the tax but says that it is still not enough and that the EU should be doing more to help the environment.

DUH federal manager Jürgen Resch said: “The EU is doing what the federal government should have done for years: it is finally taxing environmentally harmful plastic packaging. The only pity is that [the fee] is way too timid. We need a price that really causes a change in direction. And we need regulations that primarily end the littering of nature and cities with unnecessary disposable products, be it disposable plastic bottles, plastic bags or disposable coffee-to-go cups.

“The European Parliament and Chancellor Merkel have to ensure that the income is spent solely for the purpose of waste prevention and reusable funding. We also need a minimum quota for the use of recycled plastic to boost its use.”

Related Companies

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What is the impact of China’s Zero-COVID lockdowns on economic activity, consumer goods and the foodservice industry?

While wanting to protect the country from being overwhelmed by Omicron, China’s adherence to a Zero-COVID policy is resulting in a significant economic downturn. COVID outbreaks in Shanghai, Beijing and many other Chinese cities will impact 2022’s economic growth as consumers and businesses experience rolling lockdowns, leading to a slowdown in domestic and international supply chains. China’s Zero-COVID policy is having a demonstrable impact on consumer-facing industries. Access GlobalData’s new whitepaper, China in 2022: the impact of China’s Zero-COVID lockdowns on economic activity, consumer goods and the foodservice industry, to examine the current situation in Shanghai and other cities in China, to better understand the worst-affected industry sectors, foodservice in particular, and to explore potential growth opportunities as China recovers. The white paper covers:
  • Which multinational companies have been affected?
  • What is the effect of lockdowns on foodservice?
  • What is the effect of lockdowns on Chinese ports?
  • Spotlight on Shanghai: what is the situation there?
  • How have Chinese consumers reacted?
  • How might the Chinese government react?
  • What are the potential growth opportunities?
by GlobalData
Enter your details here to receive your free Whitepaper.

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