Can environmental taxes help to tackle the leakage of plastic pellets into the environment?
At end of September Joana Pedroso presented her paper “Could environmental tax help to tackle plastic pellets leakage” at the 19th Global Conference on Environmental Taxation in Madrid (Spain). The paper discusses the possibility of using environmental taxes to internalize the environmental externalities of plastic pellets spills such as the one that occurred at the in Stenungsund polyethylene facility in Sweden.
The paper examined the use of such an instrument to tax plastic products that follow a linear instead of a circular economy. Using a hypothetical scenario, the analysis focused on EU State aid law and the lessons learned from the case-law of the European Court of Justice on the subject. It took the environmental perspective (effects) when discussing the structure and design of the environmental tax law. The main objective was to spur the discussion on why and how negative environmental impacts, such as plastic pellets spills, should be addressed through taxation.
The paper concluded that the taxation of discharges, one approach analyzed in the paper, is unlikely to be implemented due to the complexity in uncovering and assessing spills, especially at industrial sites and during transport over water. Instead, the legislator should put more focus on the tax event (spills) and tax base (accountability of the damage) in order to avoid State aid consequences. Even though some tax imposition suggested in the paper are unlikely to be implemented, due to complex administrative reasons, it is nevertheless relevant to discuss ways forward, so that society as a whole does not have to cover the environmental costs of such spills.