Plastics Europe Germany warns of “disaster” if national plastic tax plans are not overturned before elections

01 Mar 2024 --- Germany’s plastics industry is making renewed calls for a revision of government plans to introduce a national plastics tax next year, stressing that if the issue goes unresolved before the federal elections in 2025, it will be a “disaster” as the industry is unable to plan investments given current legislative uncertainty.

Antonia Cartmill, senior sales director for Packaging & Specialty Plastics at Dow and board member of Plastics Europe Germany, tells us the national tax plans, which were already delayed by a year until January 1 2025, should be scrapped entirely.  

“We advocate for three key incentives: promoting circular design, incentivizing the use of recyclates and encouraging the adoption of non-fossil circular raw materials, such as biomass and CO2. Rather than introducing new taxes, policymakers should focus on enhancing existing incentive mechanisms, such as the German Packaging Act, to support a circular economy across all materials,” she says. 

Under the German Packaging Act, all retailers using over 30 tons of plastic annually must make a declaration of quantity, origin and other details to the government each year. 

Supporters of the tax say businesses and consumers will be incentivized to move toward options like reuse.Supporters of the tax hope a “steering effect” that incentivizes change in customer and consumer choices by altering prices will help reduce non-recycled plastic packaging waste. However, the efficacy of this effect is disputed. 

However, at Zero Waste Europe (ZWE), campaigners tell us they stand by their support of a taxation system, saying the impact has been proven in other countries. Instead, German policymakers should tighten stipulations and ensure no room for evasion remains by the year’s end.

Plastic levy 
The plastic levy on non-recycled plastic packaging was originally introduced by the EU and has been mandatory for all member states since 2021. However, member states decide whether they cover the tax from their national budgets or pass it on to the industry and consumers. 

“Up to now, the German government, like most European countries, has paid the plastic tax from its state budget. Amid the dispute over the federal budget for 2024, the government has announced its intention to introduce the plastic packaging tax in Germany. These measures are intended to help offset the current €60 billion (US$64 billion) budget deficit,” explains Cartmill. 

With the plastic tax, the German federal government hopes to generate an additional €1.4 billion (US$1.5 billion) in annual revenue. But Cartmill says the idea will likely have unintended consequences, with companies turning toward more environmentally damaging materials. 

“Demonizing plastic and imposing higher taxes may lead to socio-economic and environmental unintended consequences, such as a shift to less recyclable materials, or heavier materials resulting in higher carbon footprint, without addressing the underlying issue of waste management,” she emphasizes. 

“For example, there’s a trend toward plastic-coated paper fiber composites in packaging, which are less recyclable and heavier than mono-plastic alternatives. Simply shifting away from plastic could exacerbate resource consumption and environmental impact.” 

Tackling German waste 
Debates over whether plastic reduces or increases environmental footprints are ongoing.ZWE argues that waste generation, which is estimated to be 238 kg per capita in Germany, requires a steering effect for reduction. 

“Waste management is indeed a critical issue, regardless of the material involved. Plastic waste constitutes only a fraction of total waste, around 40 kg per capita. The focus should be on waste reduction and enhancing recycling rates. However, moving away from plastic might not be the solution,” Cartmill continues. 

“Regulation that only affects one single packaging material has always been a poor approach to promoting circularity. The German government’s decision to postpone the plastic tax is, therefore, a good sign. It means that the authorities are actually interested in increasing the steering effect.” 

With the additional time now granted by the delay, Cartmilll says she can envision the German government potentially endorsing a material-neutral packaging tax that applies to all materials equally or modifying the license fees for separate collection and sorting to incentivize reduced material consumption and increased use of recycled materials. 

“The industry needs to be able to plan long-term investments. It would be a disaster if the debate on the plastic tax drags on past the next election. Let’s hope the government can agree on the details within the next few months.” 

By Louis Gore-Langton