Green light for Danish packaging tax changes

Materials to be taxed by environmental impacts from April; tax on disposable kitchenware to jump

Most packaging materials on the Danish market will be taxed relative to environmental impacts from April, following a parliamentary vote on Friday. Proposed this summer by the country's environmental protection agency (EPA) (ENDS Daily 17 August), the differentiated tax system is the first to be introduced anywhere, and is intended to ensure more targeted application of the polluter pays principle.

Following its successful passage through parliament, the new taxes are due to replace an existing weight-based tax system in April. Rates will fall significantly for materials deemed to be most environmentally friendly by the EPA - such as cardboard - and rise in absolute terms for some others - such as aluminium. However, the overall burden of taxation on packaging will remain broadly stable.

One change in the system since the EPA's proposal is that environmental impacts of product distribution are now included in the tax index. The only result, however, is minor reductions in tax rates for aluminium from DKr19 (euros 2.55) to DKr18 per kilogram, and for PVC from DKr12 to DKr 11 per kilogram. Another change is that the EPA is now to recalculate the relative environmental impacts of all packaging materials within three years.

Another part of the now-approved proposal will introduce a new tax calculation method for disposable kitchenware such as paper plates and plastic cutlery. Here, the parliament nearly doubled the rate to be payable from DKr11.5 per kilogram put forward by the EPA to DKr19.20. The EPA's proposal would have left the overall level of taxation relatively similar to an existing system under which tax is added as a percentage of sale price, according to an official.

Follow Up:
Danish parliament; Danish EPA, tel: +45 32 66 01 00.

Correction: 19/12/00 In this article we confused the "environmental index" (relative to 1 for glass) with monetary tax rates. The correct data is as follows: Aluminium's environmental index is 18, and the tax rate per kilogram DKr33.30 (euros 4.47) (based on a "price" per index point of DKr1.85). The environmental index for PVC (and EPS) is 11, and the tax rate per kilogram DKr20.35.

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