The plastic tax: opportunities and problems of the plastic levy in Europe

Content:

• What's behind the plastic tax
• Definition of plastic: versatile materials for countless purposes
• Current status of implementation
• Implementation in Europe
• Plastic tax: a practical levy for greater environmental protection?

The plastic tax introduced by the European Parliament in 2021 aims to reduce the use of single-use plastics and thus lessen the environmental impact of plastic. The plastic tax requires individual EU countries to pay levies on their quantities of non-recyclable plastics in order to provide an incentive to stop using them. In the following article, we therefore take a look at how the financing of the levies is regulated in the various EU countries.

What's behind the plastic tax

The idea of a tax on plastics – the so-called ‘plastic tax’ – was already discussed by the European Commission in 2018. The plastic tax was conceived by former German EU Budget Commissioner Günther Oettinger. Member states such as Germany had clearly rejected the idea at the time and spoken out against the introduction of such a levy. Even then, the European Union administration appealed to member states not to reject the plastic tax. Commission Vice-President Jyrki Katainen emphasised at the time that the new tax should be seen as an incentive to reduce packaging waste. It should not be seen as a penalty for consumers and industry, but as an incentive to avoid plastic waste.

The levy was approved on 1 January 2021. Since then, non-recycled plastic packaging waste has been subject to a levy that goes directly to the European Union budget. Each EU Member State pays a fee of €0.80 for every kilogram of non-recycled plastic packaging waste. The plastic tax thus serves as a levy to prevent plastic waste, promote recycled materials and advance environmental protection.

Plastic tax vs. plastic levy: what is the difference?

The two terms are often used synonymously. However, the plastic levy is an EU-wide method of calculating the contributions to the EU budget that each EU member state must make. The term plastic tax, on the other hand, refers to the refinancing of the plastic levy at national level. This is not subject to any EU directives. Here, the individual member states have freedom of choice. Therefore, not every country levies a plastic tax.

Definition of plastic: versatile materials for countless purposes

Plastics – colloquially referred to as plastic – are materials consisting of macromolecules and are particularly versatile. They are so popular in industry because the technical properties of plastics are ideal for manufacturing many useful products. Attributes such as malleability, hardness, elasticity, breaking strength, temperature resistance, heat resistance and chemical resistance can be varied particularly well in plastics.

There are three main groups of plastics: thermoplastics, thermosets and elastomers. These different products are used to manufacture countless items, including packaging materials, fibres for the textile industry, pipes, floor coverings, housings, components for cars and technical products, and countless other items.

Current status of implementation

In order to be compliant when selling goods and packaging abroad, companies must keep abreast of the latest developments in their export countries. Whether a plastic tax applies to retailers or producers varies greatly from country to country. The structure of the tax also differs at national level, which can have implications for companies in terms of accounting and pricing. For example, it is necessary to consider which materials or products fall under the respective tax regulations and at which point in the supply chain they are taxed. All of this requires financial and human resources, which can be a hurdle, especially for small businesses.

To date, the United Kingdom, Spain and Portugal have introduced the plastic tax, thereby obliging companies to pay the levy. Other EU countries cover the costs from the national budget.
In Germany, the EU plastic levy has so far been financed from tax revenues. Since 2025, manufacturers and importers of single-use plastic packaging have been obliged by the Plastic Fund Act (EWKFondsG) to pay an annual levy into a central fund. This is administered by the Federal Environment Agency.

There are also some countries that want to promote environmentally conscious practices with additional ‘green taxes’ or ‘environmental taxes’.

Implementation in Europe

While some EU countries focus exclusively on packaging, i.e. both plastic and non-plastic packaging, others draw stricter boundaries and only tax single-use or non-reusable plastics. The origin of the plastics or packaging also plays a role in taxation, depending on the country. In some Member States, for example, a tax is levied on plastic products originating both domestically and abroad, while in others only foreign plastic products are taxed.

Here we take a closer look at what these regulations actually look like in some EU countries:

France

In France, there is currently no plastic tax for manufacturers or consumers. Here, the state itself pays the levies to the EU.

Ireland

Plastic taxes were already in place in Ireland before the introduction of the EU plastic levy. Under Irish regulations, packaging manufacturers are obliged to collect and recycle the packaging they produce. All companies that place packaging on the Irish market are subject to the provisions of the Packaging Act.

Italy

At the beginning of 2023, Italy planned to introduce a plastic tax on single-use products (manufatti con singolo impiego, MACSI), but this was initially postponed. From 2024, however, plastic manufacturers in Italy will be required to pay a tax on single-use products. If the single-use plastic products are not manufactured in Italy but imported into Italy from other EU member states, the foreign distributors are generally liable for tax.
The tax amounts to 45 cents per kilogram of plastic. Compostable plastic and recycled plastic material are exempt from the tax.

Netherlands

Spain

Since 2023, Spain has imposed a tax on non-reusable plastic packaging products. Among other things, this implements the EU Directive on Single-Use Plastics into Spanish law. The aim is to curb the production and use of plastic products. The tax of €0.45 per kilogram applies equally to the manufacture, import and intra-Community acquisition of non-reusable plastic packaging. This includes single-use plastic packaging, semi-finished plastic products for single-use plastic packaging and plastic-containing products that enable single-use packaging to be placed on the market.  Exempt from the tax are, among other things, recycled plastic, packaging used for the protection, handling, distribution and presentation of specific medical, agricultural and veterinary products, and plastic packaging exported directly by a manufacturer to another Member State or outside the EU. In addition, however, a tax is levied on the incineration and disposal of waste in landfills.

Further information on Spain can be found here.

Plastic tax: a practical levy for greater environmental protection?

With the EU recovery programme during the coronavirus crisis, it was decided to introduce a plastic tax from 2021. This was initially controversial and will certainly have numerous effects – both on the plastics industry and the recycling cycles of EU member states, as well as positive effects on the environment.

The plastic tax is intended to create an incentive to reduce the production and use of new plastics and thus has a major benefit for the environment. For manufacturers and retailers, however, the lack of uniform regulations poses an obstacle to ensuring their environmental compliance when shipping to other European countries.