IK director general criticizes German plastic tax and calls for “packaging value chain protest”

02 Feb 2024 --- The IK Industrial Association for Plastic Packaging criticizes the German government for not withdrawing the proposal for a German plastic tax, as it prolongs market uncertainty, according to Dr. Martin Engelmann, the association’s director general.

The IK Industrial Association for Plastic Packaging (IK Industrievereinigung Kunststoffverpackungen) is the trade association for the German plastic packaging industry. The association has approximately 300 member companies. In addition to mostly medium-sized plastics processing companies, there are around 50 supporting members from different industrial sectors. 

Packaging Insights sits down with Engelmann to discuss the recent plastic tax delay and why he believes such a tax would be environmentally damaging. We also discuss future steps the association is expecting from the German government to improve the tax conditions. 

Can you elaborate on the German plastic tax and the details known so far?
Engelmann: Following the announcement in mid-December and then the postponement to 2025, it is still completely unclear how much is to be paid by whom and for what. Nevertheless, the German government is endeavoring to ensure that the levy has an ecologically sensible steering effect and counteracts the shift toward packaging that is difficult to recycle.

What is the association’s position on the tax and its delay?
Engelmann: We criticize that the German government did not immediately withdraw the proposal for a tax altogether, as this only prolongs the great uncertainty in the market. We believe that a plastic tax is unjustified. There is no reason why German companies in the packaging value chain should be liable for the Brexit hole in the EU budget. In addition, such a tax would create enormous new bureaucratic costs for both the state and companies.Engelmann believes a national plastic tax is unjustified, creating costs for the country and the industry.

In your opinion, would such a tax lead to any environmental benefits? 
Engelmann: On the contrary, as a current research project commissioned by the German Federal Environment Agency (UBA) shows, a one-sided increase in the price of plastic packaging is detrimental to the circular economy and climate protection. According to the study, there is a high likelihood of a negative ecological impact if the use of plastic in packaging were to become more expensive. For example, a plastic tax would massively fuel the trend toward plastic-coated paper packaging. Although such fiber-based composite packaging requires less plastic than pure plastic packaging, it can hardly be recycled due to the material mix and its higher weight drives up the volume of packaging waste.

What consequences would a German plastic tax have on the country’s circular economy?
Engelmann: The announcement of a plastic tax has largely brought investment in a circular economy for plastic packaging in Germany to a standstill — investment projects have been halted and plans to relocate production abroad have been accelerated instead. This is because, after the explosion in energy costs and amid an economic crisis, there is no way for the mostly medium-sized companies to compensate for further costs by making savings. 

How is the association expecting the German government to revise the tax?
Engelmann: Our hope is that the German government will listen to its experts, who say that there is simply no sensible place for a plastic tax in the already very dense regulatory framework for packaging. Added to this are the very demanding requirements of the EU packaging regulation PPWR, which decision-makers are still barely aware of. Finally, we would like to point out that companies in the plastic packaging value chain in Germany heard the wake-up call years ago and have focussed on the end-of-life of their products. With success — the recycling rate of plastic packaging was increased from 42% in 2018 to over 67% in 2022 (input). The recyclability and reusability of plastic household packaging is already at 81%.

We call on all associations in the plastic packaging value chain to join the protest against a plastic tax. A better alternative proposal for effective eco-modulation of EPR license fees is on the table and should be implemented as soon as possible.

By Natalie Schwertheim