Plastics and waste management
The first group of green taxes may include obligations related to waste management and reducing the environmental impact of plastics. In Poland, legislative work is underway to transpose the EU Directive 2019/904 (SUP - Single Use Plastics) into Polish law. The proposed regulations will impose an additional fee charged by the seller on single-use plastic meal packaging and beverage cups made of plastic, a ban on the marketing of selected types of single-use products, as well as additional documentation obligations for businesses. The Directive also foresees the introduction of a system fee and an education fee on certain products made of plastics.
Work is also underway on the Extended Producer Responsibility (EPR) system. There are plans to introduce a packaging charge for selling products with packaging – not only plastic – intended for households, and to impose an obligation on businesses to ensure a certain proportion of recycled material in PET bottles. This system also involves linking the JPK_VAT (SAF-T) database to the Waste Data Base.
An issue related to plastics taxation is the so-called plastic tax, a levy paid by each EU member state for every tonne of plastic not recycled in a year. In practice, this is an additional contribution from the member states to the EU budget and is intended to be a direct burden on the budget.
The new regulations may encourage greater use of reusable packaging, including returnable packaging.
Emissions
Emissions tax covers greenhouse gas emissions (CO2 as well as other gases such as nitrous oxide, methane and fluorinated greenhouse gases) from the production of goods and services.
At EU level, the EU Emissions Trading Scheme (EU ETS) operates as one form of emission reduction. It is based on placing limits on the total emissions of various gases. The system applies to the energy sector, manufacturing industry and flights between countries that are part of the system. The Fit for 55 package proposes extending the ETS to maritime and road transport and construction. Emission limits within the EU ETS have been successively reduced, which consequently leads businesses to look for alternative low-carbon technologies.
The effect of the ETS is the declining competitiveness of European entities, resulting from increased costs in relation to suppliers from outside the EU, as well as the phenomenon of carbon leakage, caused by businesses moving to countries which do not have restrictive climate regulations.
The Fit for 55 package is intended to respond to these problems by introducing the so-called Carbon Border Adjustment Mechanism (CBAM), which will cover imports of iron, steel, cement, aluminium, fertilisers and electricity, imported into the EU from countries with less-stringent climate policies. As a result, those bringing these goods into the EU will have to buy certificates, the value of which will depend on the price of EU CO2 certificates. Their price may be reduced by the amount of carbon tax paid in the country of origin. As a result, goods from outside the EU will be subject to the same climate change levy as those produced within the EU.
Energy
Electricity production accounts for the largest share of greenhouse gas emissions in the EU. Minimum tax rates for electricity are set out in the EU Directive 2003/96/EC of 2003.
The proposal to amend the Directive – proposed by the European Commission as part of the Fit for 55 package – assumes that certain exemptions for energy products contained in the Directive will be eliminated. This primarily concerns exemptions for energy used in the refining of raw materials, or preferential rates for gas used in agriculture and domestic heating. From 2023, the rules for calculating excise duty, which is to be differentiated depending on the energy efficiency of the fuel, are also to be changed. Changes in the taxation of traditional energy products are to encourage the use of renewable energy sources (RES). At present, EU countries apply solutions aimed at promoting RES, including above all the possibility to exempt energy generated from excise duty.
Water retention restrictions
Developing land on which vegetation is growing, by concreting it over thus harms the land’s water retention capacity, is to be charged with additional fees (a so-called rain tax).
Sustainable investments
Climate action is not just about reducing the damage caused by current activities. Above all, sustainable investments are required to meet climate targets.
Tax breaks and subsidies that provide economic incentives for sustainable investments are an important element in stimulating sustainable development. These include the above-mentioned exemptions for renewable energy sources, the popular thermo-modernisation allowance or the possibility of applying R&D allowances to eco-innovations.
At the EU level, however, it was decided to regulate the principles of taxonomy. Taxonomy is a tool that makes it possible to assess to what extent a given activity supports climate and environmental goals. The taxonomy is aimed primarily at directing investments towards sustainable activities, while limiting the phenomenon of greenwashing – marketing activities aimed at presenting a good or service as ecological, despite the lack of objective reasons for such classification. The taxonomy is not in itself a tax as such, but it cannot be ruled out that in future it will be supplemented with such an aspect – in the form of making new tax preferences dependent on fulfilling the criteria it contains.
Due to the importance of green taxes for businesses and consumers, it is necessary to follow new regulations in this respect and the resulting opportunities and fiscal challenges in the climate area.