Minister for Environment scraps plans to introduce packaging levy

Minister for the Environment Phil Hogan has abandoned plans in the programme for government to introduce a packaging levy. Unlike the plastic bag levy, the packaging charge would have been imposed on producers instead of directly on consumers.

It was opposed by a number of industry bodies and the recycling organisation Repak, which was concerned it would affect its producer funded scheme.

Mr Hogan has also rejected the introduction of a deposit-and-return scheme where a surcharge on containers could be recouped by a consumer who returned the empty vessel to a retailer.

The objective of the proposed packing levy was to reduce the amount of discarded packaging while at the same time increasing incentives for increased recycling, reuse and recovery. The concept was that by placing a tax or levy on packaging, less would be produced and consumers would choose products with less packaging, because they would be cheaper than those which were “packaging intensive”.

In May 2011 Mr Hogan launched a public consultation process on plans to introduce the levy. While welcomed by environmental groups it met strong resistance from retailers, Ibec, which represents employers and Repak, which claimed it would amount to “double taxation” because of the existence of the Repak levy on the producers of packaging .

In July 2012 Mr Hogan tasked the the Economic and Social Research Institute with reviewing the issue. Its report recommended against the introduction of the levy.

Mr Hogan will today announce his intention not to go ahead with the levy. “The main reason for my decision is that the introduction of a packaging levy is likely to generate a number of costs – to the legislative process, to public administration, to business – with few identifiable additional environmental benefits.”