EDITORIAL
Is a proposed tax on plastics endangering Europe's feedstock industry?
 Sven Arnold (Photo: PIE) |
A plastics tax put up for discussion by EU commissioner Günther Oettinger (see Plasteurope.com of 19.01.2018 and 12.02.2018) has recently gained support from the federal chairman of Germany’s Green party, Robert Habeck – albeit a rather short-sighted one. “We need an EU-wide tax on disposable plastic products to generate a steering effect,” said Habeck when he called on the German government to support Oettinger’s proposal. This would be a first step towards solving “the monumental problem of our age – plastics.”
Did Habeck realise at which point his statement would try to – or rather, threaten to – tackle the problem? Did he also realise that Oettinger’s approach only seems to target plastics while actually being designed to plug the budgetary hole left by Brexit, which is a different problem altogether?
Habeck’s demands are based on a study commissioned by Alliance 90/The Greens and carried out by NGO Green Budget Germany (FÖS, Berlin / Germany; www.foes.de) last year. The aim of the survey was to reach an estimation of the “subsidy volumes of non-energetic uses of naphtha and possible reduction” – shortened to the name “Tax Subsidies for Plastics”. In this report is the rather striking “minimum of EUR 780m per year” in damages caused to the German state. However, plastics are only touched upon in the report. Instead, it focuses on an essential pillar in the feedstock chain of the German and European chemical industry – the refinery landscape.
Unfortunately, this is just the tip of an iceberg of highly complex industrial matters, a topic that can be called “systemic”, borrowing from the banking crisis terminology. It was for good reason that the previously existing crude oil tax was replaced, in 1953, by the petroleum tax. Since then, petrol and heating oil are taxed, while other petrochemical products are not. At the beginning of the 1990s, German environment minister Klaus Töpfer had tried – to no avail – to re-introduce the crude oil tax, with the same aim of forcing the industry to recycle plastics.
It remains hotly debated whether Germany’s recycling levy for the benefit of German recycling specialist Duales System Deutschland, as well as the mandatory deposit on disposable bottles have generated enough of a steering effect, or not. It also remains to be seen whether months of China’s strict waste import ban has generated more momentum for waste recycling than 28 years of Germany’s “Green Dot” packaging recycling label.
The discussion must be taken to a considerably broader level. One of the major open questions is whether a tax should really be applied to feedstock production or rather to plastic end products, as even EU commissioner Oettinger acknowledges in his blog.
In 1953, the crude oil tax was abolished because governments wanted to promote the establishment of refineries in order to secure the supply of both fuel and chemical feedstocks. The re-introduction of such a tax would thus impact a large range of industries and affect solvents, cosmetics, agricultural chemicals, paints and varnishes, aviation fuel, textiles and even furniture. Plastics, and especially the packaging waste that is really at the heart of the current debate, turn out to be only tiny cogs in a highly complex machine.
Without a doubt, the topic is in urgent need of discussion. Not least because Europe’s refineries and chemical industries might be awaiting similar fates as the continent’s derelict coal and steel industries. The late head of French oil, energy and plastics group Total, Christophe de Margerie, acknowledged in 2014 what had even then been clear for a long time. “We have no other choice.”
What he meant was a comprehensive restructuring of the (Total’s) refinery landscape to cope with declining demand for petrochemical products (see Plasteurope.com of 02.09.2014). The bottom line is with a rapidly growing number of refineries outside of Europe, our leaders will have to decide what should become of the local feedstock industry if Europe’s plastics processors are not to import every single plastic granule from abroad before long. Any approach that only discusses “disposable plastics products”, however, will fall far too short.
Sven Arnold
KI Group editor
Did Habeck realise at which point his statement would try to – or rather, threaten to – tackle the problem? Did he also realise that Oettinger’s approach only seems to target plastics while actually being designed to plug the budgetary hole left by Brexit, which is a different problem altogether?
Habeck’s demands are based on a study commissioned by Alliance 90/The Greens and carried out by NGO Green Budget Germany (FÖS, Berlin / Germany; www.foes.de) last year. The aim of the survey was to reach an estimation of the “subsidy volumes of non-energetic uses of naphtha and possible reduction” – shortened to the name “Tax Subsidies for Plastics”. In this report is the rather striking “minimum of EUR 780m per year” in damages caused to the German state. However, plastics are only touched upon in the report. Instead, it focuses on an essential pillar in the feedstock chain of the German and European chemical industry – the refinery landscape.
Unfortunately, this is just the tip of an iceberg of highly complex industrial matters, a topic that can be called “systemic”, borrowing from the banking crisis terminology. It was for good reason that the previously existing crude oil tax was replaced, in 1953, by the petroleum tax. Since then, petrol and heating oil are taxed, while other petrochemical products are not. At the beginning of the 1990s, German environment minister Klaus Töpfer had tried – to no avail – to re-introduce the crude oil tax, with the same aim of forcing the industry to recycle plastics.
It remains hotly debated whether Germany’s recycling levy for the benefit of German recycling specialist Duales System Deutschland, as well as the mandatory deposit on disposable bottles have generated enough of a steering effect, or not. It also remains to be seen whether months of China’s strict waste import ban has generated more momentum for waste recycling than 28 years of Germany’s “Green Dot” packaging recycling label.
The discussion must be taken to a considerably broader level. One of the major open questions is whether a tax should really be applied to feedstock production or rather to plastic end products, as even EU commissioner Oettinger acknowledges in his blog.
In 1953, the crude oil tax was abolished because governments wanted to promote the establishment of refineries in order to secure the supply of both fuel and chemical feedstocks. The re-introduction of such a tax would thus impact a large range of industries and affect solvents, cosmetics, agricultural chemicals, paints and varnishes, aviation fuel, textiles and even furniture. Plastics, and especially the packaging waste that is really at the heart of the current debate, turn out to be only tiny cogs in a highly complex machine.
Without a doubt, the topic is in urgent need of discussion. Not least because Europe’s refineries and chemical industries might be awaiting similar fates as the continent’s derelict coal and steel industries. The late head of French oil, energy and plastics group Total, Christophe de Margerie, acknowledged in 2014 what had even then been clear for a long time. “We have no other choice.”
What he meant was a comprehensive restructuring of the (Total’s) refinery landscape to cope with declining demand for petrochemical products (see Plasteurope.com of 02.09.2014). The bottom line is with a rapidly growing number of refineries outside of Europe, our leaders will have to decide what should become of the local feedstock industry if Europe’s plastics processors are not to import every single plastic granule from abroad before long. Any approach that only discusses “disposable plastics products”, however, will fall far too short.
Sven Arnold
KI Group editor
07.05.2018 Plasteurope.com [239634-0]
Published on 07.05.2018