Single-use Plastic Levy

Single-use plastic levies place taxes on items like plastic bags, bottles and food packaging to deter their use.

TARGET USERS: Individuals, Businesses, Government

KEY CONSIDERATIONS: Price modulation that adjusts cost modelling by businesses or consumers seek to shift usage patterns.

MORE INFORMATION: See UNEP Report, page 65 

THE PROBLEM

Single-use plastic products (SUPs) are used once, or for a short period of time, before being thrown away. Plates, cutlery, cups, lids, straws, and containers are a major contributor to street litter, ocean pollution, marine and other wildlife harm and greenhouse gas emissions. Because the environmental costs of these products are largely hidden to the business operator and consumer, little attention is paid to the quantity of packaging consumed and quickly thrown away.

THE SOLUTION

Single-use plastic levies on businesses and consumers support the move toward a circular economy by creating a level playing field in which single-use plastic (SUP) externalities are accounted for, making reuse the economically preferable option. The application of taxes to single-use plastic items can help to increase the price of such items, and therefore drive demand away from such items and result in substitution. Taxes on SUP items, and fiscal incentives on their reusable alternatives, make a significant difference to vendors and customers. Combined, they can drive innovation and behavior change toward reusables. For example, the plastic bag ban in Antigua and Barbuda has led to the introduction of further measures to forbid the import of food plastic containers and the use of plastic utensils.

Placing a tax or levy on SUPs can quickly direct businesses to seek alternatives. A levy (visible on payment) on single-use coffee cups, for example, will create a demand for reusable ones, an approach proven successful for single-use plastic bags.

CASE STUDY EXAMPLES

Latte Levy, Ireland
As of 2022, Ireland will impose a “latte levy” of EUR 0.25 cent on single-use coffee cups, including compostable cups. The income raised from the scheme will support the development of reuse systems. In the longer term, additional environmental levies will also be imposed for cold drinks and other single-use plastic containers. In the meantime, Ireland has committed to the following proposals:

  • Trialling a total elimination of disposable coffee cups in selected towns, higher education institutions and other transport/commercial centres.
  • Introducing measures to ban unnecessary use of disposable coffee cups (such as in sit-in cafes) and to oblige retailers to offer a discount to consumers who use reusable cups.
  • Education and awareness programmes.
  • An eventual full ban on disposable cups.

Berkeley, California 
The Berkeley, CA City Council unanimously passed an ordinance focused on reducing waste and limiting single-use plastic on Tuesday, Jan. 22. The Single-Use Foodware and Litter Reduction Ordinance will be fully implemented by January 1, 2022. A phase-in plan began Jan. 1, 2020. For more information: https://www.plasticpollutioncoalition.org/pft/2019/1/24/berkeley-ca-passes-groundbreaking-policy-to-reduce-single-use-foodware

Carrier Bag Bans 

Wales
In October 2011, Wales was the first country in the United Kingdom to introduce a mandatory charge on all carrier bags, regardless of their material, in order to curb their consumption beyond what had been achieved through a voluntary agreement with supermarkets. The charge applies to single-use bags made fully or mainly from plastic, paper and plant-based starch which are not intended for multiple reuse. The charge has successfully contributed to curb carrier bag consumption, which has been estimated to drop by 71% between 2011 and 2014.

Scotland
In 2014, a mandatory charge on carrier bags was introduced in Scotland, thus setting a minimum price of GBP 0.05 for new single-use bags supplied at point of sale and made of plastics, paper and certain plant-based materials. Zero Waste Scotland estimated that the charge contributed to reducing carrier bag use by about 80% across the 7 main retail chains in its first year of application, amounting to at least 650 million fewer bags.

Ireland
Ireland introduced a EUR 0.15 plastic bag levy in 2002. The tax, levied on consumers, applies to bags made wholly or partly of plastic, sold at any sales outlet. The government set the tax at this level following a survey indicating that average consumer willingness to pay for plastic bags hovered around EUR 0.024. The price signal was thus set at EUR 0.15, more than 6 times higher than the average maximum willingness to pay. This led to an immediate 90% reduction in the use of plastic bags. 

Source: https://www.oecd.org/

ALTERNATIVE SOLUTIONS

In addition to placing a levy on businesses and consumers for the use of plastic products, taxes can also be levied on the manufacturer of plastic products. See Packaging Material Fees to learn more. 

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