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EU agrees tax on plastic packaging waste


On July 21, 2020, European Commission members agreed to impose a new EU tax on plastic packaging waste. According to reports, the new tax is part of the EU’s 750 billion euro economic recovery plan against the Covid-19 epidemic. The income will be used to repay the recovery plan. Part of the loan required.


The tax will be implemented on January 1, 2021. The tax amount will be calculated based on the weight of unrecycled plastic packaging waste. The tax standard is 0.80 Euro (equivalent to 6.4 yuan) per kilogram of waste plastic. .


As early as May 2018, the European Commission first proposed a plan to levy a tax of 0.80 euros per kilogram of non-recyclable plastic packaging waste to raise 4 billion to 8 billion euros. This plan can provide 4% of the EU budget. source.


Regarding this tax levy, various parties in the EU have different opinions. For example, the German environmental organization Deutsche Umwelthilfe (DUH) welcomed the tax, saying that the tax system should have been introduced long ago. DUH also believes that taxation is too low and may not be able to play a real role. DUH Director General Jurgen Resch said, “We need tax rates that can really bring about change.” He said that rules must also be formulated to prevent disposable plastic products such as plastic bottles, plastic bags and coffee cups from entering the natural environment. (Glass bottles, non-woven bags, paper cups and other more bio green packaging  can be used to replace the use of plastic products)


In addition, DUH also suggested that instead of imposing a tax on unrecycled plastic packaging waste, it would be more effective to impose a tax on new plastic in packaging.


However, there are also industry bodies that oppose this tax. For example, last week, the German Chemical Industry Association VCI warned against imposing an EU tax on unrecycled plastic packaging waste.


On the corporate side, a series of EU legislative measures have prompted the entire petrochemical and packaging industry to formulate ambitious sustainability goals, which have exceeded the minimum requirements set by the EU.


The sustainability goal of many plastic bottle manufacturers is to use at least 50% recycled materials by 2030, or to switch to other materials, such as bio-based or non-plastic alternatives. However, these materials generally have a greater environmental impact than plastics because of their higher energy consumption, carbon emissions, and weight.

The European Union is currently facing a shortage of recycled plastics. The shortage of recycled PET is the main manifestation, because recycled PET is currently the most used recycled material in Europe and has the most developed market and infrastructure. The shortage of recycled materials is related to the fact that the growth rate of recycling rate cannot keep up with demand. For example, the European PET recycling rate in 2018 was 63%, but the annual recycling rate was less than 3%.


In addition, packaging manufacturers that use materials such as polyethylene (PE), polypropylene (PP), polystyrene (PS) and polyvinyl chloride (PVC) are studying to switch to other materials (including PET), which has also further increased recycled PET Lack of materials. Because of the impact of the high recycling rate of PET, they generally believe that the supply of recycled PET materials, especially food-grade PET materials, is very sufficient. In fact, the food grade granule (FGP) capacity of the plastic bottle market is insufficient. The current European output is about 300,000 tons/year, accounting for about 9% of the total demand for PET plastic bottles. (Some eco-friendly tableware can be used instead of PET tableware. Bagasse tableware is a kind of eco-friendly tableware. Sugarcane bagasse pulp tableware can be completely degraded and can be composted.)


At the same time, to be approved by the European Food Safety Authority (EFSA), 95% of recycled materials must come from food contact-level applications, and complete and reliable traceability throughout the industry chain is required. For recycled PET, since its main raw material comes from plastic beverage bottles, it is not difficult to achieve a 95% ratio at present, but for other recycled materials collected by roadside garbage collection programs, due to complex sources, the 95% ratio is very high. Hard to achieve.


ICIS analysis shows that in order to achieve the goal of recycling single-use plastics, the annual growth rate of recycling needs to reach 9%, and this does not include the increase in pollution rates in the region. According to market estimates, cross-contamination with other plastics, coupled with the losses caused by mechanical processing, has increased the average waste rate of disposable plastics in Europe from 25% to 30-35%.


The shortage of material supply, coupled with technical restrictions such as the opacity of material sources and the loss of material performance, has caused many companies to seek other alternatives such as chemical recycling or bio-based materials to achieve sustainable development commitments.


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