Is taxing the plastics industry in Europe the push into a recession?

Press Release 7/10/2019 --- The European Commission is still proposing to EU Member States the introduction of a national contribution based on unrecycled plastics packaging for the period 2021 – 2027. Despite great and honourable intentions and without consultation with the main industry stakeholders, this proposal will lead to rather opposite economic and environmental results, negatively affecting the whole plastics industry in the European Union, which is composed of over 50.000 SMEs and employs more than 1.6 million people.

According to the proposal, this contribution can be paid by EU Member States into the common budget but each of them will be free to decide how and where to collect the due amount. This will, in turn, create significant fragmentation in Europe, that will almost certainly disrupt the Single Market with some countries potentially taxing production or consumption of plastics packaging, without working on the key issues. Moreover, such a contribution will not be exclusively linked to any expenditures or investment in existing national plastics waste management systems. Besides, it will discriminate plastics, disrupt free market choices and favour other materials for packaging applications with negative environmental consequences.

In this regard, Alexandre Dangis, EuPC Managing Director shares: “The EU Commission is making a huge mistake. In 5 years from now, we would be able to assess the damages of such short-sighted populistic measures. Especially SMEs, the backbone of the European economy would be heavily affected and it would mean the end of the EU single market. The financial hole of 7 billion euro left by the BREXIT cannot be paid by the plastics packaging industry alone to secure the funding of the overall EU budget. A restructuring of the EU expenses or an increase of the contributions to the EU budget via the GDP performances of the countries would be a much better alternative. In the following years, the EU institutions are forcing our companies in Europe to pay EPR fees and taxes and to invest in circularity, without concerns about the imports. It is very sad and discomforting to see that the tools available to EU policymakers are not used efficiently and that these additional taxes will accelerate the way to a recession in Europe. A good start in 2020 for the new Commission”.

For this reason, we call upon the EU Member States to reject the MFF own resources as presented by the EU Commission, to re-evaluate this budget proposal and create a long-term approach that truly reflects the actions and policy measures that must be adopted for the European Industry.