Denmark to tax packaging by green impacts

Plan for environmentally weighted taxes favours glass, paper; penalises aluminium, PVC

In what it claims to be a world first, the Danish environmental protection agency (EPA) has proposed differentiating existing taxes on packaging materials by their environmental impacts. Based on a new life-cycle assessment, the agency said on Tuesday that relatively low taxes should apply to paper, cardboard and glass, and much higher ones to aluminium, expanded polystyrene and PVC (see table below).

The LCA and associated "political" interpretation of its results have been prepared in advance of an expected government proposal to revise Denmark's current packaging tax system. This is likely to emerge before the end of the year, with the EPA's proposal now out to consultation until 12 September.

Introduced in January 1999, the current system is weight-based. Tax rates per kilogram (kg) vary between materials, but in such a way that the rate for all materials averages about DKr0.31 (euros 0.04) per litre of goods delivered. Packaging used in 17 product groups is covered, ranging from wine to vinegar, edible oils, lubricants, pesticides, paints, milk, margarine, dog and cat foods and food sauces.

Neither the existing system nor the new proposal affects the existing volume-based tax system for carbonated drinks. An EPA spokesperson told ENDS Daily that recent Danish press reports that the government was planning to introduce new taxes on aluminium drinks cans (ENDS Daily 6 July) were incorrect.

The Danish government has already indicated that it wants in principle to differentiate packaging taxes depending on environmental impacts but has yet to endorse the EPA's plan. The agency stresses that its proposal would continue to favour lower overall use of packaging, but would also incentivise use of greener alternative packaging materials where feasible. The main surprise to have come out of the new LCA was quite how badly aluminium scored, a spokesperson said.

Danish EPA proposed packaging tax rate index
                      Per Kilo     Per litre
Aluminium               19            1.27
EPS, PVC                12            1.2
Plastics (HDPE, LDPE, PP, PS, PET)
  Primary                7            -
  Secondary              4.2          -
  Rigid                  -            0.7
  Flexible               -            0.17
Steel                    5            1
Glass                    1            1
Paper (primary)          0.5          0.02
Paper (secondary)        0.3          -
Wood                     0.3          -
Note:  All numbers are relative to glass = 1

Follow Up:
Danish EPA, tel: +45 32 66 01 00; Study 1: The LCA, and Study 2: The Interpretation.

Correction: 19/12/00 In this article, the first table column should be headed "environmental index" rather than "per kilo". Monetary taxes per kilogram are calculated from these index figures at a rate of DKr1.85 per index point.

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