Environmental tax: The economic impact on the Ionian Islands Region
Ionian Islands Region
23 Feb 2022
/ 17:11
The tax burden from the annual generation of Municipal Solid Waste for the Ionian Islands Region is €518.2 million.
Mahi Tratsa, in an article published on 9 February 2022 on the website www.news.b2green.gr, mentioned some very interesting data regarding the production of plastic packaging in Greece:
Since January 2021, in the EU budget estimate, the same resource principle applies to the plastic waste that is not recycled. The resources come from charging the Member States €800 per ton of non-recycled plastics, while the total amount may increase further due to the change in the way the quantities of recycled plastics are being measured (at certified recyclers rather than at sorting centres).
According to a study by the Foundation for Economic and Industrial Research, which had been carried out on behalf of the Association of Hellenic Plastics Industry and presented at a recent conference, Greece will have to pay €127 million to the EU for the quantities of plastic packaging that were not recycled in 2020. Accordingly, for 2019, the amount was €111.2 million. Therefore, as is stated in the study, the improvement of the plastic recycling process also has financial benefits for the country by reducing the resources allocated to the Community budget through this charge.
Greece produces 242,300 tons of plastic packaging and imports another 81,500 tons. This means that, there is a total of 323,800 tons of plastic in the country. Of these, 269,700 tons are for domestic consumption and 54,100 tons are being exported. 141,400 tons of waste end up in landfills, 85,200 tons are destined for recycling, while another 25,200 tons are being exported for recycling, of which 1,300 tons are being exported outside the EU. It is particularly interest that 43,100 tons of plastic packaging are searched for every year, for which there is no data on where they end up. Some of them are probably being reused and the rest end up in the environment.
On the basis of the above numbers and given the country's European obligation to make landfill the most expensive option in relation to the recovery of recyclable materials, we believe that it is very useful and interesting, particularly in terms of decision-making, to let numbers speak.
Thus, an attempt is being made to estimate the Ionian Islands Region’s tax burden resulting from the introduction of a pan-European environmental tax of €800/ton for each ton of plastic packaging that Municipalities will not be able to recycle.
A good way to do this would be to use the annual quantities of Urban Solid Waste generated in the Region of Ionian Islands as weighting factors, in relation to the whole country. This is because it incorporates the impact of tourist flows on the total annual generation of Urban Solid Waste, which for the whole country is 5,200 tons, based on estimates reported in the European Convention on Human Rights 2020-2030.
The annual generation of Municipal Solid Waste in the Ionian Islands Region amounts to 125,000 tons (2.4%). According to the study by the Foundation for Economic and Industrial Research, Greece will have to pay €518.2 million within seven years. Therefore, the tax burden for the Ionian Islands Region is €518.2 million x 2.4% = €12.44 million.
Table 1 shows the distribution of the €12.44 million per Regional Unit of the Ionian Islands Region, also using the annual generation of Municipal Solid Waste as a weighting factor.
Table 2 shows the distribution of the €6,190 thousand per Municipality in Corfu with the annual quantities of Municipal Solid Waste generated per Municipality as a weighting factor.
The €12.44 million - plus the landfill tax set at €20/ton for 2021 increasing annually by €5/ton and reaching €55/ton in 2027 - could be saved. Provided, however, that Municipalities address the issue of waste management as a management and resource-saving problem and engage seriously and effectively in the recovery of recyclable materials. Which means that it is necessary to implement the Sorting at Source method as soon as possible, which can also be carried out door-to-door, as required by the European directives on circular economy, which are a serious legal obligation of our country and were recently incorporated in the new European Convention on Human Rights 2020-2030.
The Municipalities that will follow this option with dedication will benefit, because they will be able to achieve significant relief in their already burdened budgets by reducing their tax and fee burdens, unlike those who insist on the option of mixed waste and, therefore, large residues and landfill.
As can be seen, landfilling is by far the most expensive waste management method in Europe, especially in Corfu, since the mixed waste to be landfilled is being removed from Corfu at a cost (transport plus gate fee) of about 180€/ton, which can also be saved in the case of recycling.
The cost-benefit analysis must of course take into account the loss of revenue resulting from the sale of the recovered recyclables, which on weighted average is 400€/ton. Therefore, Municipalities and local communities, apart from the environmental reasons, also have very serious economic reasons to focus their efforts on Sorting at Source and recovery of recyclable materials, especially in such difficult times, when for reasons of survival we have to save every last cent.
Because costs are now a lot, it is necessary to publish quantitative data per Municipality on a monthly basis as well as cost data, so that citizens, who through municipal taxes are asked to pay a lot of money, can know why they are paying them. In this way, the necessity of recovering materials can be more easily understood, and eventually the citizens could voluntarily participate in this joint effort, recognising its benefits.
Let us bear in mind that it is definitely more likely for us to become more efficient and faster in achieving challenging goals if we invest in well-informed citizens. The case of Treviso in Italy is a good example of the adoption of good practices. Their whole waste management philosophy is built around people, investing in them, in their reliability and proper information, making them an ally, achieving 96.7% with Sorting at Source, turning the social problem of waste management into a resource management problem and, eventually, teaching us how crisis can become an opportunity. Why are we not doing the same? What is the point of insisting on throwing resources away? What is the point of insisting on the very expensive option of mixed waste?
Therefore, in order to save and use the limited resources available more efficiently, it would be appropriate for the planned projects to be oriented towards Sorting at Source and, in particular, the separate collection of bio-waste. This means that they should be designed to receive the pre-selected recyclable materials from the separate collection, for which there is an obligation to increase the quantities, rather than the environmentally, economically and socially unprofitable production and processing of mixed waste, the quantities of which must be gradually reduced over time, so that these projects can finally become compatible and serve the circular economy's objectives (55%-65% recycling and up to 10% residue for landfill), which, we are stressing once again, is a legal obligation.
By Theodoros Voros, Economist & MSc Statistician
Since January 2021, in the EU budget estimate, the same resource principle applies to the plastic waste that is not recycled. The resources come from charging the Member States €800 per ton of non-recycled plastics, while the total amount may increase further due to the change in the way the quantities of recycled plastics are being measured (at certified recyclers rather than at sorting centres).
According to a study by the Foundation for Economic and Industrial Research, which had been carried out on behalf of the Association of Hellenic Plastics Industry and presented at a recent conference, Greece will have to pay €127 million to the EU for the quantities of plastic packaging that were not recycled in 2020. Accordingly, for 2019, the amount was €111.2 million. Therefore, as is stated in the study, the improvement of the plastic recycling process also has financial benefits for the country by reducing the resources allocated to the Community budget through this charge.
Greece produces 242,300 tons of plastic packaging and imports another 81,500 tons. This means that, there is a total of 323,800 tons of plastic in the country. Of these, 269,700 tons are for domestic consumption and 54,100 tons are being exported. 141,400 tons of waste end up in landfills, 85,200 tons are destined for recycling, while another 25,200 tons are being exported for recycling, of which 1,300 tons are being exported outside the EU. It is particularly interest that 43,100 tons of plastic packaging are searched for every year, for which there is no data on where they end up. Some of them are probably being reused and the rest end up in the environment.
On the basis of the above numbers and given the country's European obligation to make landfill the most expensive option in relation to the recovery of recyclable materials, we believe that it is very useful and interesting, particularly in terms of decision-making, to let numbers speak.
Thus, an attempt is being made to estimate the Ionian Islands Region’s tax burden resulting from the introduction of a pan-European environmental tax of €800/ton for each ton of plastic packaging that Municipalities will not be able to recycle.
A good way to do this would be to use the annual quantities of Urban Solid Waste generated in the Region of Ionian Islands as weighting factors, in relation to the whole country. This is because it incorporates the impact of tourist flows on the total annual generation of Urban Solid Waste, which for the whole country is 5,200 tons, based on estimates reported in the European Convention on Human Rights 2020-2030.
The annual generation of Municipal Solid Waste in the Ionian Islands Region amounts to 125,000 tons (2.4%). According to the study by the Foundation for Economic and Industrial Research, Greece will have to pay €518.2 million within seven years. Therefore, the tax burden for the Ionian Islands Region is €518.2 million x 2.4% = €12.44 million.
Table 1 shows the distribution of the €12.44 million per Regional Unit of the Ionian Islands Region, also using the annual generation of Municipal Solid Waste as a weighting factor.
Table 2 shows the distribution of the €6,190 thousand per Municipality in Corfu with the annual quantities of Municipal Solid Waste generated per Municipality as a weighting factor.
The €12.44 million - plus the landfill tax set at €20/ton for 2021 increasing annually by €5/ton and reaching €55/ton in 2027 - could be saved. Provided, however, that Municipalities address the issue of waste management as a management and resource-saving problem and engage seriously and effectively in the recovery of recyclable materials. Which means that it is necessary to implement the Sorting at Source method as soon as possible, which can also be carried out door-to-door, as required by the European directives on circular economy, which are a serious legal obligation of our country and were recently incorporated in the new European Convention on Human Rights 2020-2030.
The Municipalities that will follow this option with dedication will benefit, because they will be able to achieve significant relief in their already burdened budgets by reducing their tax and fee burdens, unlike those who insist on the option of mixed waste and, therefore, large residues and landfill.
As can be seen, landfilling is by far the most expensive waste management method in Europe, especially in Corfu, since the mixed waste to be landfilled is being removed from Corfu at a cost (transport plus gate fee) of about 180€/ton, which can also be saved in the case of recycling.
The cost-benefit analysis must of course take into account the loss of revenue resulting from the sale of the recovered recyclables, which on weighted average is 400€/ton. Therefore, Municipalities and local communities, apart from the environmental reasons, also have very serious economic reasons to focus their efforts on Sorting at Source and recovery of recyclable materials, especially in such difficult times, when for reasons of survival we have to save every last cent.
Because costs are now a lot, it is necessary to publish quantitative data per Municipality on a monthly basis as well as cost data, so that citizens, who through municipal taxes are asked to pay a lot of money, can know why they are paying them. In this way, the necessity of recovering materials can be more easily understood, and eventually the citizens could voluntarily participate in this joint effort, recognising its benefits.
Let us bear in mind that it is definitely more likely for us to become more efficient and faster in achieving challenging goals if we invest in well-informed citizens. The case of Treviso in Italy is a good example of the adoption of good practices. Their whole waste management philosophy is built around people, investing in them, in their reliability and proper information, making them an ally, achieving 96.7% with Sorting at Source, turning the social problem of waste management into a resource management problem and, eventually, teaching us how crisis can become an opportunity. Why are we not doing the same? What is the point of insisting on throwing resources away? What is the point of insisting on the very expensive option of mixed waste?
Therefore, in order to save and use the limited resources available more efficiently, it would be appropriate for the planned projects to be oriented towards Sorting at Source and, in particular, the separate collection of bio-waste. This means that they should be designed to receive the pre-selected recyclable materials from the separate collection, for which there is an obligation to increase the quantities, rather than the environmentally, economically and socially unprofitable production and processing of mixed waste, the quantities of which must be gradually reduced over time, so that these projects can finally become compatible and serve the circular economy's objectives (55%-65% recycling and up to 10% residue for landfill), which, we are stressing once again, is a legal obligation.
By Theodoros Voros, Economist & MSc Statistician
