Plastic Tax Becomes a Monster Task

Since 2021, EU member states have had to pay a levy on non-recycled plastic waste to Brussels. This plastic levy amounts to 80 cents per kilogramme. As a result, Germany paid a total of around 1.4 billion euros to the European Union between 2021 and 2022. Although it is possible to transfer these costs to industry, this is not mandatory in Germany. Against this backdrop, the German government is endeavouring to introduce a national plastic tax in order to impose the costs previously borne by the general public directly on manufacturers. This new tax is to come into force from 1 January 2025, as the government announced in a press release on 4 January 2024. The introduction of the tax was originally planned earlier, but a government spokesperson explained that a postponement was necessary to ensure efficient implementation with as little bureaucracy as possible.

The implementation of the plastic tax planned for 2024 was previously sharply criticised by several associations. For the IK Industrievereinigung Kunststoffverpackungen, for example, the question arises as to who is actually meant by "manufacturer". "That hasn't even been answered yet - like so many things with this announced and then postponed plastic tax," says Mara Hancker, Managing Director of Communications at the IK. In principle, the association welcomes regulation that creates sensible guidelines for the transformation of the industry towards a circular economy and CO₂ reduction. "However, we believe that one-sided rules and bans only in favour of or against plastic are a dangerous mistake," says Hancker.

However, opinions on a plastic tax are very divided in the packaging industry. Naturally, manufacturers of fibre-based materials hope to increase their market share by increasing the cost of plastics. However, the aim of the plastic tax is to motivate companies to use less plastic and rely more heavily on recycled plastics in order to reduce their consumption and the associated environmental impact. In this context, Sven Sängerlaub, Chairman of the Board and Regional Group Manager South at the bdvi packaging network, warns: "When it comes to promoting more environmentally friendly packaging, there are doubts from various interested parties as to whether this is really coherent. On the one hand, plastic packaging is very efficient, and on the other, it provokes avoidance strategies that are not necessarily more sustainable."

Incentive for Better Recycling

With 1.7 million tonnes of packaging waste made from non-recycled plastic, Germany is the leader in the non-recycling of plastic. However, companies have heard the alarm bells and are now focussing on the end of life of their products. The recycling rate for plastic packaging was increased from 42 per cent in 2018 to over 67 per cent in 2022. The recyclability and reusability of plastic household packaging is 81 per cent. Many members of the bdvi believe that a plastic levy with simultaneous promotion of the use of recyclates can further promote this development. "From this perspective, a plastic levy would lead to a competitive advantage for plastic recyclates if they are a good substitute for virgin material," explains Sven Sängerlaub. There are also some critical voices in his association who criticise the fact that "the plastic tax will make a high-quality, still innovative material more expensive and this will then be passed on to consumer prices."

Fossil plastics are currently still much cheaper than their recycled counterparts. The BVSE recycling association has already called for government intervention due to this discrepancy. Jenny Walther-Thoss, Senior Consultant Sustainability at the consulting firm B+P, also concludes: "The price for fossil virgin material is simply far too low - and packaging would have to become significantly more expensive for consumers to start valuing it."

Does the Plastic Tax Work in Other Countries?

Passing on the costs of the EU plastic tax to the polluters, i.e. the plastic producers, is in line with a practice that is also being followed in some other EU member states. "So far, the UK and Spain have introduced a dedicated plastic tax, while Italy keeps postponing the introduction of the law – the current deadline is 1 July 2024," explains Jenny Walther-Thoss, adding: "The plastic tax in the UK and Spain has not had the desired effects, as the audit and sanction approaches are completely inadequate and the price of the tax is still not sufficient to make the use of recyclates economically viable."

In addition, the different regulations in each EU member state and in countries outside the EU make it complicated for companies to fulfil the requirements of the plastic tax. "Basically, it is a significant burden for all companies to deal with individual systems in different countries – even more so for small companies than for large ones. I think companies would accept a higher tax if there was only one system for the entire EU and there were clear control and sanction mechanisms," says Jenny Walther-Thoss. In her opinion, a clear preference for reusable or fully recyclable packaging without discriminating against plastics per se would make sense.

This latter view is shared by the plastics association IK, which wants to continue to campaign for a material-neutral regulation. "In contrast to a plastic tax, a material-neutral levy based on ecological criteria would have a much better steering effect," says Mara Hancker. This is also the conclusion of a recent study commissioned by the Federal Environment Agency. It assesses the probability of an ecological misdirection caused by a reduction in the use of plastic as high. In contrast, a material-neutral steering system to reduce the use of materials in packaging, to reduce CO₂ emissions or to increase recyclability would be more ecologically targeted.