LANDFILL TAX

Taxes charged to private landfill operators to help drive waste away from landfill towards environmentally preferable disposal alternatives, such as reuse, recycling, and composting. 

TARGET USERS: Businesses, Industry, Government

KEY CONSIDERATIONS: While it is well documented that countries with high landfill taxes tend to have lower landfill rates, affordable landfill alternatives must be available in order to prevent open dumping into nature.

    MORE INFORMATION: https://www.politics.co.uk/reference/landfill-tax


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    THE PROBLEM

    Landfills fall at the bottom of the waste hierarchy, disposal only as a last resort. However, of the estimated 8.3 billion metric tons of plastic that has been produced to date, 6.3 billion metric tons has become plastic waste, the vast majority—79 percent—is accumulating in landfills or sloughing off in the natural environment as litter. Only nine percent of plastics ever produced has been recycled. If present trends continue, by 2050, there will be 12 billion metric tons of plastic in landfills.

     

    THE SOLUTION

    Landfill Tax is an environmental tax paid on top of normal landfill rates by any company, local authority or other organization that wishes to dispose of waste in a landfill. It is intended to encourage alternative means of waste disposal, such as recycling, by reflecting the environmental costs of landfill use more accurately in its price. Landfill operators are liable for the tax – but the costs are passed on to users as higher prices.

    18 EU Member States as well as Switzerland and Norway have introduced a tax instrument for waste sent to landfills. The tax is typically levied in units of currency per unit of volume or weight. The tax implies an additional payment on top of the regular costs for sending waste to landfill.

    Landfill taxes are successful in mitigating the environmental impacts related to waste disposal, such as contamination of groundwater or soil, methane emissions from decaying organic waste, or other nuisance such as odor, vermin or noise. At the same time the tax provides incentives for alternative and more sustainable ways of waste disposal. The tax applies mostly to construction and inert waste as well as residues, hazardous and biodegradable waste. In addition to the tax, several countries have a ‘landfill ban’ that indicates how much of a certain type of waste may be landfilled.

    In these countries the tax is collected by tax and custom authorities, environmental agencies or municipalities. Landfill taxes generated total revenue of around EUR 2.1 billion in 2009/2010 for the countries and regions that applied them. The use of the revenues from landfill tax differs greatly per country; besides going directly to the state or regional budget, revenues are used for waste management, cleaning up of contaminated sites or other environmental measures. It is well documented, that countries with high landfill taxes tend to have lower landfill rates. See https://doi.org/10.1787/a2dde1e8-en

     

    ALTERNATIVE SOLUTIONS

    Other financial instruments that include taxes, levies, fines and bans can deter plastics and other materials from being dumped in landfills.

     

    CASE STUDY EXAMPLES

    Landfill taxes are now applied in a number of EU countries. Different countries have taxes with differing scope. For example, Denmark and Norway makes use of a tax on waste, which covers not only landfill, but also incineration with and without energy recovery. Interestingly, though there would be a strong environmental case for doing this, no EU Member State apart from Austria differentiates between tax rates for landfills with and without gas collection for flaring / energy recovery. Other countries, such as the Netherlands, resort to bans on the landfilling of specific waste streams. Landfilling of municipal waste is banned other than in exceptional circumstances.

    The example of the UK demonstrates a continuously increasing tax level. The standard landfill tax rate increased by £8 per tonne/year to reach £80 in 2014 when it remains constant until 2020. In 2008/09 the UK had around 450 landfill sites compared with 1,200 in 2001. The Business Resource Efficiency and Waste Programme (BREW, 2005-2008) had been conceived to reinvest part of the landfill tax revenue

    Detailed case studies on France, Austria, and the UK, show three unique landfill tax approaches. See European Commission, Chapter 10 Landfill: https://ec.europa.eu/environment/enveco/taxation/pdf/ch10_landfill.pdf

    Additional summary of EU countries and regions: 

    https://www.cewep.eu/wp-content/uploads/2017/12/Landfill-taxes-and-bans-overview.pdf

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