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Plastic tax ‘discriminatory’, likely to increase prices – PlasticsEurope

November 5, 2018
Chemical Value Chain

A tax on plastics proposed this week in the UK could increase final consumer prices and would be discriminatory against the industry, an executive at European trade group PlasticsEurope said on Thursday.

Kim Christiansen, north region director at the trade group, added, however, that plastics are “high on the political agenda” and argued that polymers producers are already taking steps to increase the circularity of their products.

This week, the UK announced that it aims to introduce a tax on plastics with less than 30% recycled material from 2022 onwards, a tax opposed by the industry’s trade group the British Plastics Federation (BPF), according to its director general in an interview with ICIS.

The CEO of Austria’s polymers major Borealis also told ICIS this week that a plastic tax would not be efficient to increase recycling rates, and said the EU should develop further schemes like the Extended Producer Responsibility (EPR).

PlasticsEurope’s Christiansen said on Thursday: “If you put a tax on a specific material, in this case plastics, it is in principle discriminatory as other materials would not be subject to taxes. We would asked governments for caution on this.

“We do share the concerns and objects behind the political agenda to solve the issue of plastic waste in the oceans, but also more in general to solve the wider issues. Plastics are a valuable material and it shouldn’t be wasted.”

Christiansen reiterated PlasticsEurope’s call to ban landfilling for plastics across the EU, in order to encourage more domestic recycling rates.

Currently, the EU recycles domestically around 53% of plastics it uses, he said, while 37% is recycled outside the 28-country bloc.

However, large disparities among EU countries still exist, with those in the north at the forefront of recycling rates, but those in the south or east lagging behind.

A ban on landfilling plastics would be more efficient that any tax, said the PlasticsEurope executive.

“For years, we have been calling for a ban on landfilling plastics … The point I want to make is that you couldn’t change the current situation only in a couple of years – you can force the market in a certain direction, but you need to be cautious,” he said.

Whether other counties could follow the UK on imposing taxes would be as of now only “speculation”, said Christiansen (pictured), although he conceded that “some governments” may be considering actions through taxes.

“Representing plastics, I would urge caution.”

Packaging across the EU is already subject to “some kind of taxes” under the Extended Producer Responsibility (EPR) schemes, the CEO of Borealis had said earlier, a point Christiansen supported.

“The value chain already pays for plastics to be collected and recycled [through the EPR schemes]. Moreover, with the latest revision of EU waste legislation, there is a possibility that we could take advantage of the ERP schemes and achieve what you could try achieve with taxes,” Christiansen said.

The executive said the EU should enforce legislation across all its member countries, hinting that is not the case currently, and accepted that industry has a role to play in supporting improved recycling systems, but also passed some responsibility to public bodies.

“Regulatory support has also a role to play. For instance, implementing the ban on landfilling of plastics. They also need to make sure that the waste legislation is implemented, with new funding from public bodies,” said Christiansen.

However, at the end of the day it may be consumers the ones taking on the bill for higher recycling rates.

“If you tax certain material or certain products, this would push down the value chain,” said Christiansen.

Seeing the glass half-full, he said that examples already about on how plastics producers can take voluntary steps to improve circularity, and specifically mentioned the polyvinyl chloride (PVC) sector, where “more than€100m” would have been spent over the years to improve recycling rates.

He also highlighted voluntary commitments from industry players like those in the styrenics sector.

“We are totally aware of the political agenda. There will be investments, and the industry in general is doing a lot of innovation [regarding recycling],” concluded the PlasticsEurope executive.

By Jonathan Lopez

Source: ICIS News

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