Recyclers greet EU plastic tax proposals with skepticism, confusion

London — The EU's proposed plastic tax has been met with skepticism and confusion by some participants in the recycling sector, who said investment decisions that need to be made straight away cannot be taken until there is more clarity on how the tax will operate.

The proposed plastic tax, announced July 21 as part of the EU's larger Eur750 billion ($870 billion) recovery fund, would look to levy Eur800/mt on non-recycled plastic packaging waste.

"At this stage, it is completely unmanageable because no one knows the details," one recycler said.

Ultimately, participants feared the levy would force the packaging sector away from plastic toward other forms of packaging such as glass, paper and aluminum, which they say can have a greater impact on the environment than plastic.

However, once it was clearer how the tax worked, recyclers did show some optimism that it would give a welcome boost to the recycled plastic market at a time when demand this summer had been low.

Three main areas of concern were put forward by market participants on the announcement of the tax.

The first was how the weight of non-recycled plastic packaging waste would be calculated, at which stage of the waste stream this would take place, and on whom the burden for reporting this information would fall.

"No one has good enough data on this. Will they count it at the recycler or finished product? They don't understand the differences between collection rates, recycling rates and yields," a PET recycler said.

This is a crucial aspect of the tax, which has yet to be clarified, since weight of waste input is different to the weight of usable output from a recycling plant. Additionally, some recyclers fear that if reporting this data falls solely on them, they will be responsible for the majority of investment, which would be difficult given the current economic climate.

The second area of concern is that individual EU member states would be responsible for reporting data and achieving the goals, but currently there is no harmonized approach toward effective recycling.

"There needs to be auditing of data provided to Eurostat," one polyolefin recycler said, suggesting this would be the source of data used to determine whether member states are liable for the tax. "Data reported to Eurostat varies from country to country and is inconsistent."

Currently, member states adopt different approaches to waste collection and sorting, to varying degrees of success. However, sources put forward that a one size fits all approach to taxation would only be effective if reporting standards and waste collection and sorting systems were harmonized across the EU.

The third area of concern is that effective recycling for many plastics used in packaging, such as polystyrene and polyvinyl chloride, are not advanced enough for participants in those markets to be able to adhere to the tax.

Recycling infrastructure in Europe has, for many years, focused on the PET market and, more recently, polyethylene. However, large sections of the PS and PVC industry are made up of packaging, and there is significantly less infrastructure in these markets to both effectively collect and to recycle these polymers.

"For PET it is manageable, but we need to figure out what to do with small flexibles and other polymers, that slip through the net. To meet this new EU target needs several million more tonnes [of all plastic] to be collected and recycled," another recycler said.

In order to boost recycling in these markets, participants suggested that countries had to move away from mixed curbside collection systems and into segregated waste streams, such as the deposit return schemes for PET bottles in many countries. This, however, requires significant investment at a government level.