Danish funding change threatens recyclers

Waste could be exported if government withdraws subsidies, says industry body

Danish recycling companies could be forced to export waste and cut jobs if the government goes through with a proposal to scrap subsidies for waste disposal, the country's main industry federation has warned.

Recycling companies currently receive "compensation" from the government to cover most of the cost of disposing of waste that they collect but which proves not to be recyclable. This lowers the cost of waste disposal for companies to an average DKr40 (Ecu5.3) per tonne of non-recyclable waste compared to the full cost of DKr335 per tonne. The subsidy is intended to maximise companies' rate of recycling.

But a study carried out by the environment, tax and industry ministries earlier this year concluded that the subsidy has had the opposite effect. According to Jens Balslev of the Danish Environmental Protection Agency who directed the study, companies were exploiting several loopholes to avoid recycling waste. Many were disposing of waste that could easily have been recycled.

The government now feels that a full tariff on non-recyclable materials is more likely to increase the recycling rate, Mr Balslev told ENDS Daily. Environment minister Svend Auken has proposed an amendment to waste legislation scrapping the compensation scheme. This is due to be debated by the Danish parliament over the next two weeks.

But in its weekly newsletter, the Confederation of Danish Industries (DI), describes the move as "drastic". The compensation was "the key to survival" for many recycling companies, it says. "The consequence is that [these companies] will cut workers to afford the higher cost and that this waste will begin to be transported to neighbouring countries." The DI also predicts an increase in illegal waste disposal.

However, the government is dismissive of the industry's predictions. Mr Balslev said its study indicated that recyclers would be able to pass on their costs by increasing prices to their clients and that the difference in costs to clients is likely to be minor in most cases.

The export of waste to neighbouring countries is also unlikely, Mr Balslev feels, pointing out that waste disposal costs are even higher in Germany and prices are also due to rise in Sweden and Norway.

Follow Up:
Danish Environment Ministry, tel: +45 33 92 76 00; Confederation of Danish Industries, tel: +45 33 77 33 77.

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