Tax on packaging

Packaging Professional magazine
1 Nov 2007

The Netherlands’ Ministry of Finance is to introduce a carbon-based tax on packaging from January 2008. This will be the first of its kind in Europe. The European Organisation for Packaging and the Environment says the fee for packaging processors will likely be levied according to a calculation of CO2 emissions from the production of each kilogramme of packaging.

The measure will apply to all products that are made available to a third party in The Netherlands – a move that will also affect importers in the country who remove packaging from products they bring in and then transport.

Companies that place less than 15,000kg of packaging materials on the market each year are exempt, but 95% of the nation’s packaging will still be liable for taxation.

The revenue generated from the scheme is expected to reach 240 million euros in 2008. Some of this will go towards a waste fund to improve waste separation technologies and reduce litter.

‘It’s good that the Government is looking to influence the market to make a substantial reduction in waste, but I don’t think it’s fair to compare packaging materials by one standard, as each offers different benefits,’ says Steve Pye, Manager at Walki Ltd, a laminates and wrappings production company in Preston, UK.

Pye believes the levy may set a precedent for other EU governments. ‘People don’t want to pay tax for waste, so taxing the source of the waste is a better option for governments. I’m curious to see what will happen over the next year, if there will be similiar taxes introduced.’

The Netherlands’ Government has also reached an agreement with local authorities and packaging companies to introduce a separate collection system for plastic packaging. This will raise the recycling target for plastic packaging from 20% to 42% by 2012.

Meanwhile, in the UK, large manufacturers and recyclers of materials that are exempt from carbon trading could be forced to participate in a new cap and trade scheme for emissions, under the Government’s revised Climate Change Bill.