Plastic tax and ETS tinkering could plug Brexit hole, suggests EU budget chief

EU governments must plug the funding gap left by Brexit, said Günther Oettinger on Wednesday. [European Commission]

EU Budget Commissioner Günther Oettinger has revealed that the European Commission will propose taxing plastic and shifting emissions trading income to EU level, in an attempt to balance the bloc’s coffers once the United Kingdom leaves the EU.

Oettinger floated the idea of a plastic tax during a high-level conference on the future of the EU’s multi-annual financial framework (MFF) at the beginning of the week. On Wednesday (10 January), the German Commissioner reiterated the idea during the college readout on the MFF.

Brexit will leave a €13bn hole in the EU budget and the bloc’s institutions are now beginning to plan in earnest for life after the UK’s financial contribution.

During the readout, Oettinger insisted that the EU will propose “very few new financial instruments” and that the Brexit gap will not be filled by incurring debt. Instead, he said that the shortfall will be made up by 50% “fresh money” and 50% cuts.

Hungary and Poland defend larger European budget

The Hungarian and Polish governments expressed on Monday (8 January) their readiness to contribute with more money to the EU’s multi-annual financial framework after the UK exits the EU in 2019.

As part of the additional income needed, Oettinger said a plastic tax and changes to the Emissions Trading System (ETS) would be proposed.

Although he did not go into any detail of note, he explained that the financial income generated by the ETS would be shifted from national to EU level under the proposal, adding that the legislation and policy are already located at supranational level.

DG Budget, Oettinger’s department, said that the proposal could lower member state contributions, adding that the idea is in line with the Monti report, a 2016 assessment of the EU’s own resources.

But the idea has already been criticised by one of the main MEPs involved with the recent update of the climate change mitigation tool. British lawmaker Julie Girling (ECR group), who was rapporteur on the file, revealed that the idea was firmly rejected by member states during negotiations.

Girling told EURACTIV that the idea itself is “politically toxic” if changes are made now that the agreement is all but finalised, adding that it could lead to “accusations of deceit on the part of the Commission”.

The conservative MEP also said she would only be able to support the idea if the revenue was set aside for climate change action. EEB climate policy expert Roland Joebstl said it did not matter where the revenue is collected, so long as carbon prices rise.

EU negotiators in November brokered a deal on the ETS update, agreeing on instruments to soak up excess carbon permits and a cap on the total volume of emissions. EU Climate Commissioner Miguel Arias Cañete hailed it as a “landmark deal” but it was criticised as “meaningless” by green groups.

Emissions trading deal fails to impress

EU negotiators from member states and the institutions reached a compromise on an Emissions Trading System (ETS) reform early on Thursday (9 November). But green groups have criticised the deal for ditching flagship climate policy status for a fossil fuel subsidy.

The idea for a plastic tax comes less than a week before the Commission publishes its long-awaited Plastics Strategy, which is expected to lay down guidelines on dealing with plastic production and pollution.

EEB senior policy officer Carsten Wachholz welcomed the plastic tax idea, saying “levies are among the most successful tools to influence positive behaviour”.

He added that the Commission “should learn from the positive outcome we have seen in countries like Ireland. After introducing a plastic bag tax, the country generated €200 million over a 12-year period and also reduced the presence of bags in the environment from 5% of litter pollution  to 0.13%.”

The UK has rolled out its own plastic mitigation measures lately, introducing its own plastic bag charge in 2015 and, this week, a ban on microbeads came into force. British Prime Minister Theresa May claimed that the bag charge has led to 9bn fewer carrier bags being used.

Marine litter has been thrust into the public spotlight recently, after the BBC’s Blue Planet series highlighted its impact on the world’s oceans. A high-level UN conference in Kenya also sought to put the issue of pollution higher on the political agenda.

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