EU Plastics Levy – countries not passing costs onto producers

On 1 January 2021, the European Union introduced a levy on non-recycled plastic packaging waste. Maria Mupamombe, International Account Manager, explains what it is, which countries have decided not to pass costs onto producers and what impact it may have.

What is the plastic levy?

In case you missed the first instalment of the Plastic Tax Passport series, on the 21 July 2020 governmental heads within the European Union (EU) gathered and concluded implementations being made relating to the COVID-19 Pandemic Recovery Plan. The recovery plan also incorporated new measures for the environment, including a plastic packaging levy which came into effect on 1 January 2021.

The tax requires individual countries to make contributions to tackle problems caused by packaging waste. The tax is aimed at non-recyclable plastics to encourage the reuse and regeneration of packaging materials.

Europe Passport

What does this mean?

Each EU member state is required to make a financial contribution to the EU central budget as part of the coronavirus recovery strategy. Federal Governments can choose to pay the levy using their budget (possibly through general taxation) or distribute the levy between producers and plastic packaging users through the introduction of legislations and regulations regarding the matter. Nevertheless, each state is subjected to the levy at a rate of €0.80/kg (€800/tonne) for their individual markets.

State implementations

Understandably, for many EU member states the implementation of the policy is still in its infancy. The COVID pandemic has delayed several regulatory strategies as well as plans to update and reform current environmental laws. More information is expected to become available over the next few months.

The nations listed below have currently committed to paying the levy using state budgets, with no current plans or indications to pass on fees to any businesses. This is a possible strategic decision made to lessen the economic impact companies have endured due to the COVID-19 pandemic and cause no further financial burdens.

  • France
  • Germany
  • Ireland
  • Luxembourg
  • Slovakia

It is possible that countries may change their decision in the future and pass the levy on to business. Valpak’s International Compliance team will keep you up to date with any changes that develop.

What impact will the Plastic Levy have?

As the levy is still in its infancy it is difficult to judge its impact at this early stage. It will undoubtedly take time to see the long-term effects and needs the scope to be clearly defined to judge its lasting impact.

Many concerns have been raised as to how the levy will impact the waste and recycling industry, will it aid or obstruct recycling and reuse, the taxpayer, and the companies who continue on the road to recovery following the COVID 19 pandemic.

Valpak International Compliance Service

If your business is affected by environmental legislation overseas, we will remove the administrative and resource intensive burden of complying and have a range of services that can be tailored to suit your business’s needs.

To find out more about international environmental legislation and how we can help please call us on 03450 682 572 or complete our online enquiry form.