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Business Regulation

Expert view: Mixed market reaction to EU €800/tonne plastics charge as implementation details emerge

By Mark Victory, Senior Editor, Recycling, ICIS

The EU’s €800/tonne plastic packaging waste charge, passed by the EU Council on July 21st and which takes effect from January, sent shockwaves through the market because of both its size and narrow timeframe to implementation.

Reaction has so far been mixed, with immediate questions on how it will be calculated, how it will be passed through the supply chain, and whether it will lead to greater regulatory divergence on plastics.

The new charge of €800/tonne for all non-recycled packaging waste will be paid by EU nations from 1 January 2021.  National contributions will be calculated by the European Commission using existing reporting obligations under the Packaging Waste Directive (Directive 94/62/ECC) and its implementing Decision (Decision (EU) 2019/665.

Under that directive member states provide data on plastic packaging and recycling. The data are published on the Eurostat website.

The charge will be used to fund the coronavirus recovery package and charged at nation state level.

The charge is not a tax, although commonly referred to as one, because it is payable at state level rather than by individuals or corporations.  Nation states could, however, seek to recover the cost of the charge through taxation.

The methods used to meet the cost of the charge will be up to individual countries, and the EU Council has not proposed any regulatory stipulations around this. Individual countries are free adopt different approaches and could seek to recoup the cost of meeting the charge from differing parts of the supply chain, leading to potential regulatory divergence.

How nation states will incorporate this into national legislation remains the key uncertainty for plastic and recycling markets.

Some players have welcomed the move because it could encourage higher recycling rates in the future, and for devolving how this is implemented across the supply chain to individual national governments.

If you were interested in this story, you may also be interested in the ones below.

Read: EU plastic tax plans slammed by European plastics industry

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Read:  European Commission urges industry to do more to boost recycled plastics market.

Read: European Commission launches ‘Circular Plastics Alliance’ to help create ‘well-functioning market’ for recycled plastics.

Read: Quantafuel inks waste plastic contract with Grønt Punkt Norge to boost chemical recycling project

Read: Conventional plastic industry is using ‘Coronavirus as an excuse’ to revive old habits

Read: Ineos to produce bio-based PVC from pulp production by-product.

Read: Neste and Remondis link up to develop chemical recycling of plastic waste.

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