Implementation of plastics taxes across Europe

While 77 countries around the world have passed a full or partial ban on plastic bags, according to the UN report ‘Legal Limits on Single-Use Plastics & Microplastics: A global review of national laws and guidelines’, many others – approximately 32 according to Statista – have introduced taxes to limit plastic bag use.

Such fees demonstrate plastic taxes operating at the most fundamental level. More extensive taxes are less common.

On January 1, 2021, the EU introduced a plastic packaging levy on member states at a rate of €800/tonne, based on the amount of non-recycled plastic packaging waste produced in each state. It is likely that the levy will encourage member states to accelerate the introduction of their own plastic taxes to fund their liability to the EU. It may also prompt existing proposals to be reviewed.

Currently each member state is funding payments either by paying the contribution from their own budget, regardless of whether they have set up a national system to collect the tax (e.g., Austria and Belgium, which intend to pay the contribution from their national budget, at least initially) or by designing their own tax legislation and setting up a national system to collect the plastics tax by way of a tax on specific taxpayers.

Country specific updates

Our Global EPR team is abreast of which European countries are farthest along in the legislative process towards introducing more comprehensive plastic taxes. Here’s the latest update from the team:

UK

It’s just seven weeks until the UK Government is expected to introduce the new tax on plastic packaging from April 1, 2022. Whether you manufacture or import plastic packaging, the UK’s proposed Plastic Packaging Tax could impact your business. Affected businesses need to be aware of and start preparing to meet their compliance obligations in advance of April.

What is the UK plastic packaging tax (PPT) and who is liable?

A brand-new tax on plastic packaging with the aim of incentivising the use of recycled material in the production of plastic packaging.

The draft primary legislation provides that the tax will apply at a rate of £200/tonne on plastic packaging with less than 30% recycled plastic manufactured or imported into the UK. Any business that imports plastic packaging or products contained in plastic packaging into the UK or manufacturers plastic packaging in the UK will be liable to register for PTT and pay if they exceed the threshold of 10 tonnes of plastic packaging per annum. Credits will be available for exported packaging.

The tax will affect a wide spread of businesses due to its broad scope, including the majority of companies in the following sectors, amongst others:

  • Packaging manufacturing
  • Industrial manufacturing
  • Consumer goods
  • Online retail
  • Pharmaceutical
  • Cosmetic
  • Chemicals
  • Food & drink

Crucially, registration for the tax WILL be required even if a business meets the 30% recycled content threshold and does not need to pay any tax. In addition, businesses that purchase plastic packaging may become jointly and severally liable for any tax due that has not been accounted for by their suppliers.

Read our FAQs blog on the UK Plastic Tax here to find out more information: https://www.ecoveritas.com/uk-plastic-packaging-tax-faqs/

Italy

Italy is introducing a plastic tax on the consumption of manufactured single-use items, which have or will have the function of containing, protecting, handling, or delivering goods or food products. Semi-finished plastic products used in the production of single-use plastic packaging, as well as plastic devices used for the closure, marketing, or presentation of single-use plastic packaging, are also in scope of the tax. In Italy, the taxable persons obliged to pay the plastic tax include the following:

  • Manufacturer
  • Seller
  • Purchaser – if the items are bought from other EU countries and sold for business activity
  • EU supplier – if the items are bought from other EU countries and sold to a private consumer
  • Importer

The party that first places the product on the market in Italy is the one that pays the tax. While all of the above may be liable, only one party will need to pay the tax at any one time. The tax applies to these items:

  • Single-use plastics in food packaging
  • Semi-finished plastic used in the production of food packaging
  • Plastic items used for the marketing or presentation of single-use plastic packaging

Originally supposed to come into force in January 2022, this has been delayed until 2023. The rate of the tax has been set at EUR 0.45 per kilogram of plastic.

Spain

The Spanish government is set to introduce a plastic tax as part of wider legislation. The objective of the new law is to contribute to the fight against climate change and to protect the environment. It includes an excise tax on non-reusable plastic packaging.

The excise tax is to be levied on the use of packaging, in Spain, that contains plastic and cannot be reused. Generally speaking, for the purposes of this tax, packaging is taken to mean any product designed for the containment, protection, handling, distribution and presentation of goods.

Packaging is deemed non-reusable when it is not intended, designed or marketed with a view to accomplishing multiple trips or rotations throughout its life cycle, or to be refilled or reused for the same purpose for which it was originally conceived.

Exemptions are available for packaging of certain medical products.

In the case of manufacture, the tax will become chargeable on the date on which the packaging is first delivered or made available to the acquirer in the tax territory. In the case of imports, the tax will become chargeable when the import duties become chargeable. We expect the Spanish excise tax on non-reusable plastic packaging will come into force in 2023, facing similar delays to the Italian tax. The rate of tax will also be EUR 0.45 per kilogram.

What do plastics taxes mean for business?

The attention to plastics is growing at a European and national level and plastics tax introductions are taking place swiftly. The interaction between new and old taxes is complex, more so when Extended Producer Responsibility is factored in.

What is clear is that countries are looking to their peers in Europe to help determine the way forward. Whilst Italy, Spain and the UK are leading the way, others may follow soon. For example, the Dutch parliament commissioned a report exploring possible ways a tax could be developed. Meanwhile, Poland intends to introduce a fee on single-use plastics through the draft ‘Product Fee Act’, and Sweden intends to introduce its own legislation.

It is important to remain informed about European developments and those in the countries your business operates as you could face significant additional costs if plastics taxes are implemented. Businesses should be compliant with new global plastic regulations. This is especially pertinent given stringent penalty regimes.

How can we help?

The ecoveritas team can help you to understand both existing and proposed new global packaging regulations, how they will affect your business and collect the relevant data points for compliance. ecoveritas has a detailed knowledge of international regulations and, with our new international Packaging EPR Matrix, we can help you avoid being caught out.

Speak to us today to find out more about our exclusive EPR matrix which covers more than 60 countries worldwide.

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