25 January 2001

Aluminium industry attacks Denmark over packaging tax

Europe’s aluminium industry wants the Danish government to be taken to court for the second time following a decision by the Danes to impose an environmental impact based tax on packaging from April 1.

Denmark already bans aluminium cans and this is the subject of a separate case currently underway in the European Court of Justice. The new tax could unfairly hit the aluminium sectors market for flexible packaging such as food trays and pouches, fears the European Aluminium Association (EAA).

The association and the European Commission consider the ban on cans to be anti-competitive and contrary to the rules of free trade within the European internal market.

Now the new Danish proposal will put a tax, from April 1 this year, on packaging on environmental grounds. Denmark carried out packaging life cycle analysis. But, the EAA argues that life cycle analysis, while having an important role in decision-making, can easily be used by governments to reach decisions which are not necessarily correct.

The environmental impact tax comes in an amendments to the Danish law on packaging and is supposed to provide incentives in favour of materials with a “lower environmental impact”.

The EAA says that a tax that represents about three times the price of the material – without any relation to the true costs of its recovery – constitutes a major disruption of the mechanisms of the free market economy. “This is likely to dismantle several components of the aluminium packaging industry.”

The environmental impacts that were calculated in Denmark following a Life Cycle Analysis (LCA) model, rest, according to the aluminium industry, on a tenuous basis, because of total disregard of LCA standards and misinterpretation of the EU Directive on Packaging and Packaging Waste.

Strangling effect

The aluminium industry reasons that the tax will have a strangling effect on aluminium for packaging, possibly leading to a de facto ban. “This is contrary to the Directive, which guarantees freedom to place on the market all packaging which satisfies the foreseen provisions of the Directive.”

The EAA notes that Denmark has failed to set up the required recovery systems for packaging waste, and therefore failed to achieve the required minimum recycling rate of 15% for metal packaging. It reasons that the new environmental tax penalises aluminium because Denmark itself has not bothered to promote sufficient recycling.

Jan te Bos, EAA director of public affairs, said: “The Danish Act is setting a dangerous precedent for the whole Community by further discriminating in an unjustified way between packaging materials and systems. New distortions of competition and obstacles to trade will be the result, which will undermine the objectives of Directive 94/62/EC on Packaging and Packaging Waste.”

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