EU approves tax on nonrecycled plastic
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EU approves tax on nonrecycled plastic

The tax will go into effect Jan. 1, 2021.

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The European Union has approved a plastic tax on nonrecycled plastic waste, which will be implemented Jan. 1, 2021. The plan includes a 0.8 euros per kilogram levy on nonrecycled plastic packaging waste to be paid by member states into the EU budget.

The tax is part of a 750 billion euro (or about $861 billion) package combining the future Multinational Financial Framework and a specific recovery effort under Next Generation EU, which the European Council discussed and agreed during its meeting July 17-21. The tax has been presented by the European Commission as contribution to the EU budget designed to incentivize member states to increase recycling from plastic scrap. 

According to a news release from European Plastics Converters (EuPC), a trade association based in Brussels, some in the European plastics industry worry that the tax will have a negative effect. EuPC reports that fiscal measures are not the most efficient tool to drive innovation and investments that are needed to meet the policy objectives of EU’s 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,” says Alexandre Dangis, EuPC managing director. “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.”

EuPC’s news release states that 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 around 6-8 billion euros per year flowing into the general budget of the EU through this tax, EuPC reports that this money would not be available to be invested in the transition toward a circular economy.

However, others in the plastics industry are optimistic about the new tax. ML Polyolefins, Poland, released a corporate statement on the EU's plastics tax. 

"The decision of the European Council clearly indicates the direction of the EU's policy aimed at maximizing the recovery of plastics introduced into the economic circulation," says Tomasz Mikulski, president of ML Polyolefins. "In this way, processors will be forced to make more rational decisions regarding packaging designs, which will certainly contribute to the elimination of those that process nonrecyclable ones. This tax is to mobilize EU member states to take more decisive actions to implement the concept of the circular economy."

For some companies, ML Polyolefins states that the new tax could pose problems.

"Especially for large companies with a wide assortment, switching and minimizing the amount of unprocessed raw materials can be a big challenge," Mikulski says. "We conduct audits on an ongoing basis at the request of our contractors and verify for them the possibilities of rational resource management in the field of plastics."

Further details of the tax still need to be worked out in a specific law and approved by European Parliament and Council of the EU.