PLASTICS TAX
EU summit agrees budget and coronavirus recovery fund / Plastics industry criticises levy on non-recyclable packaging
After nearly five days of often controversial debate, the EU financial summit held in the bloc’s capital of Brussels / Belgium from 17 to 22 July 2020 agreed on a EUR 750 bn coronavirus recovery fund, aimed in particular at helping member states that are staggering under the heaviest of economic burdens due to the unprecedented pandemic. According to the plan, the European Commission will borrow the money on financial markets and distribute EUR 390 bn to the hardest hit EU economies, with an additional EUR 360 bn to be available as loans. Original plans for EUR 500 bn in grants and EUR 250 bn loans were modified after four member states – Austria, Denmark, the Netherlands and Sweden – objected to the terms.

The meeting also approved a new EU budget of nearly EUR 1.1 tr for 2021-2027. From the budget and the fund, altogether 30% is earmarked to address climate concerns. Despite persistent objections voiced by the plastics industry, the agreement, which must still meet the critical eye of a not yet satisfied European Parliament, includes a EUR 800/t tax on single-use plastic (SUP) items and packaging. The idea harks back to a 2018 proposal by former EU budget commissioner Günther Oettinger (see Plasteurope.com of 15.10.2019). The levy, which is planned to flow into the general EU budget would kick in on 1 January 2021. According to estimates, this would burden the budgets of all member states by EUR 6-8 bn annually.

The EU summit’s budget discussion included an SUP tax that has been highly criticised by various plastics industry associations (Photo: PIE)
European chemical industry groupings, including the European Chemical Industry Council (Cefic, Brussels; www.cefic.org), said they welcomed the chance to apply their knowhow to kick-start the EU’s planned “Green Deal”. However, in a statement issued in advance of the talks, 48 plastics industry organisations criticised the packaging levy, saying they “strongly believe” that “further fiscal measures are not the most efficient tool to drive innovation and investment.” The stakeholders, including PlasticsEurope (Brussels; www.plasticseurope.org), European Plastics Converters (EuPC, Brussels; www.plasticsconverters.eu) and FoodDrinkEurope (Brussels; www.fooddrinkeurope.eu), said there was “no guarantee” that the money collected would be reinvested in better collection, sorting and recycling infrastructures.

Separately, two German groups representing plastics converters and packaging manufacturers – GKV (Berlin; www.gkv.de) and Industrievereinigung Kunststoffverpackungen (IK, Bad Homburg; www.kunststoffverpackungen.de) – also expressed their objections to the recycling levy. The EU plastics tax deprives member states lacking an adequate recycling infrastructure of valuable cash to establish such, said GKV’s managing director, Oliver Möllenstadt. What’s more, he said, the size of the proposed fee is out of proportion to the actual cost of recycling. Together, GKV and IK have suggested a dedicated tax tied to the volume of plastic packaging waste that each member state needs to dispose of.
22.07.2020 Plasteurope.com [245544-0]
Published on 22.07.2020

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