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EU Plastic Tax

The Paris Agreement’s signatories have been laying out their goals for reducing carbon emissions. Overall the globe, European Union seems to be the region to pave the way for achieving these environmental goals. The EU announced its plans to reduce its carbon emissions by %55 by 2030 with a comprehensive tax measure package; ‘’the Green Deal’’. One of the tax adjustments suggested as part of the Green Deal is the so-called ‘’plastic packaging tax’’. The issue of plastic packaging waste has dominated regional and national policy discussions throughout Europe. In light of this, the EU has implemented a “plastic tax” as a component of its $900 billion COVID-19 economic recovery plan. With implementing the plastic packaging tax, it is desired to reduce the use of raw materials and waste while promoting the transition to a circular economy. The plastic packaging levy has already received approval from all Member States. United Kingdom’s relevant authority HMRC seems to be the pioneer to implement EU’s plastic packaging tax at national level since the environmental tax was introduced on 1 April 2022. Italy, Spain, Portugal, the Netherlands and other Member States follows EU’s plastic packaging guidelines closely.

How does it work?

Starting on 1 January 2021, the plastic packaging tax is calculated by the weight of non-recycled plastic packaging waste with a rate of EUR 0.80 per kilogram. The amount of residual plastic packaging waste that each country produces is how the EU gauges each countries’ contribution to the use of plastics. The EU’s plastic packaging tax is calculated from Eurostat data, which the Member States currently gather and publish in accordance with established reporting requirements.

The Member States that have enacted some sort of plastic tax which have different plastic packaging tax legislations and structures. While some are more broad in their focus and only target single-use or non-reusable plastics, others are more focused on packaging (including plastic and non-plastic packaging). On domestic and imported plastic products, certain Member States are levying a tax. Other Member States, in contrast, only target plastic products with a foreign source by using an excise tax system. In addition, the excluded goods list varies from one Member State to another. Importantly, the tax rate varies between Member States, with some deciding to impose no tax at all. Or, to put it another way, the Member States are free to choose the best national-level policies to decrease plastic packaging waste. According to estimates, this new EU plastic levy might bring in an additional 6 to 8 billion euros for the EU each year.


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