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Could a plastic tax be coming to Asia?

Recycling sector expert Antoine Grange says a tax on plastic — like one rolling out in the EU this month — would have an immediate effect in increasing the volume of recycled material used by brand owners.

Asia should implement a tax on non-recyclable plastic waste to manage its staggering ocean plastic leakage problem, said a recycling expert at one of the world’s largest waste management companies.

Antoine Grange, Asia chief executive of recycling and recovery at Paris-headquartered Suez, said that the continent could follow the European Union (EU) in implementing some form of penalty to ensure that more plastic is recycled. Currently, only 9 per cent of plastic is recycled globally while the rest is landfilled, incinerated or leaks into the environment.

In July, the EU agreed on a tax on plastic packaging waste as part of the regional bloc’s coronavirus recovery package that was slated to be introduced on 1 January 2021. Packaging producers are to fork out €0.80 for each kilogramme.

Grange, whose company recently opened its first recycling plant in Asia, said that such a tax would lead to an “immediate change in behaviour” among companies that produce and use plastic, obligating them to use more recycled material in their products and packaging.

Numerous brand owners — under pressure from consumers and green groups — have committed to increase the ratio of recycled content in their products, but these pledges have been hampered by the pandemic-induced fall in price of virgin plastic. In turn, recyclers in Asia, where most of the world’s materials are recycled, face severe financial stress.

Grange said that while some brands’ sustainability commitments showed a willingness to support the recycling value chain, there was a need for them to “move quicker” in procuring post-consumer material. Brands that have not committed to using more recycled content faced reputational risks, he said in an interview with Eco-Business.

While recycled plastic may be at a premium, Grange said that baked into the price of recycled plastic is another price consumer goods companies need to pay — contribution to the protection of the planet by avoiding plastic pollution.

He said that a tax on plastic may come in various forms, depending on the conditions of the local market. In California, a plastic tax is being considered that would place a one-cent levy on single-use plastics. Brands that sell these items must pay for each non-recyclable or non-compostable piece of packaging they sell.

At an event on how to reduce plastic pollution in Singapore in October, Zhaotan Xiao, Asia Pacific president of biodegradable plastic firm RWDC Industries, said that rampant plastic pollution was a “classic case of market failure” as there is no price on the externalities of plastic.

“Plastic is indestructible — and we need to put a price on that, with a global tax,” said Xiao.

A tax would make recycled materials more competitive with virgin plastic, which is now cheaper than ever to produce. Revenue from the tax could be used to aid pollution mitigation and clean-up efforts, and provide subsidies to prop up the struggling recycling industry.

However, such a tax would likely meet opposition from industry. Jacob Duer, president and CEO of Alliance to End Plastic Waste, a non-profit backed by the world’s biggest plastic producers and users, has said he was opposed to a tax on plastic, and consumer education was the best way to combat marine pollution.

His comments came as a white paper by Ellen MacArthur Foundation and World Wide Fund for Nature called for a global treaty on plastic pollution, arguing that corporate pledges to reduce plastic waste are failing to curb rising ocean plastic leakage. 

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