How deposit schemes and packaging levies can help reduce dependency on oil, gas and aluminium

To reduce the dependence on fossil and other critical raw materials, look is logically directed towards accelerating the energy transition. But besides that, the rollout of a circular economy for raw materials is also crucial. In that context, the introduction of a deposit return scheme on beverage packaging and a reform of the packaging tax can help to reduce the dependence on crucial raw materials. Deposit on plastic bottles Plastic bottles can be recycled or even refilled. But for that, they first need to be collected separately (and not end up in the environment), and preferably in as pure a collection stream as possible. Currently in Belgium, only half of the plastic bottles are collected and recycled. Countries with well-implemented deposit return schemes achieve collection and recycling rates of well over 90 percent. According to the European directive, all European member states must collect 90% of plastic bottles separately by 2029. Everyone knows that this can only be achieved by introducing a deposit system. European Commissioner Frans Timmermans, who is responsible for the SUP Directive, therefore advises European member states to introduce deposit systems. Every bottle that is reused or recycled into a new bottle means one less bottle made from virgin plastic, which is made from oil and gas. The more plastic bottles we collect and reuse, the less dependent we are on gas and oil, the revenues of which are used by despots to wage war and oppress populations. Aluminium cans Not only do we need to quickly break away from Russian gas and oil. The dependence on other raw materials is also highly relevant. With 3.6 million tonnes per year, Russia is the third largest aluminium producer in the world. Aluminium cans are highly recyclable. But just as with plastic bottles, currently only half of the cans in Belgium are collected separately and recycled. With recovery via waste-to-energy plants, the total recycling rate comes to around 65%. A deposit system on cans leads to recycling rates above 90 percent, and can thus make us less dependent on newly mined aluminium. Furthermore, recycling aluminium uses only 5 percent of the energy required to extract aluminium from ore, so the environmental benefit is also enormous. Integrating deposits into the federal packaging tax The Belgian government already announced in its federal coalition agreement that it would investigate "incorporating a deposit scheme into the packaging tax". The Belgian federal coalition agreement thus aligns perfectly with the deposit plans that the Walloon and Brussels governments included in their respective coalition agreements in 2019. A reform of the packaging tax, where polluting packaging is taxed more and sustainable packaging less, is a useful tool to guide packaging companies towards sustainable materials. It is good that the packaging tax currently taxes single-use bottles more heavily than refillable bottles. But there is an opportunity to use the packaging tax more broadly and effectively. We are thinking of: A packaging tax on beverage packaging like in Norway where producers pay less tax the more they collect separately. Based on the Norwegian tax, the business sector there decided to introduce a deposit system because that is simply how you achieve the highest collection rates. We know from Germany that 95% collection and recycling is possible. If Belgium introduces a hefty packaging tax for every percentage point below that, the sector will take action immediately. Moreover, this does not mean consumers will pay more. Deposit return systems are highly effective and have not led to price increases anywhere. Taxing packaging for drinks and other products made from virgin plastic (new plastic made from oil or gas) and virgin metal (new aluminium and steel based on raw materials) more heavily, while taxing packaging made from recycled material less.

To reduce the dependence on fossil and other critical raw materials, look is logically directed towards accelerating the energy transition. But besides that, the rollout of a circular economy for raw materials is also crucial. In that context, the introduction of a deposit return scheme on beverage packaging and a reform of the packaging tax can help to reduce the dependence on crucial raw materials.

Deposit on plastic bottles

Plastic bottles can be recycled or even refilled. But for that, they first need to be collected separately (and not end up in the environment), and preferably in as pure a collection stream as possible. Currently in Belgium, only half of the plastic bottles are collected and recycled. Countries with well-implemented deposit return systems achieve collection and recycling rates of well over 90 percent.

According to the European directive, all European member states must collect 90% of plastic bottles separately by 2029. Everyone knows that this can only be achieved by introducing a deposit system. European Commissioner Frans Timmermans, who is responsible for the SUP Directive, therefore advises European member states to introduce deposit systems.

Every bottle that is reused or recycled into a new bottle means one less bottle made from virgin plastic, which is made from oil and gas. The more plastic bottles we collect and reuse, the less dependent we are on gas and oil, the revenues of which are used by despots to wage war and oppress populations.

Aluminium cans

Not only do we need to quickly break away from Russian gas and oil. The dependence on other raw materials is also highly relevant. With 3.6 million tonnes per year, Russia is the third largest aluminium producer in the world.

Aluminium cans can be recycled very well. But just as with plastic bottles, currently only half of the cans in Belgium are collected separately and recycled. With recovery via waste-to-energy plants, the total recycling rate comes to around 65%. A deposit system on cans leads to recycling rates above 90 percent, and can thus make us less dependent on newly mined aluminium.

Furthermore, recycling aluminium uses only 5 percent of the energy required to extract aluminium from ore, so the environmental benefit is also enormous.

Integrating deposits into the federal packaging tax

The Belgian government already announced in its federal coalition agreement that it would investigate "incorporating a deposit scheme into the packaging tax". The Belgian federal coalition agreement thus aligns perfectly with the deposit plans that the Walloon and Brussels governments included in their respective coalition agreements in 2019.

A reform of the packaging tax, where polluting packaging is taxed more and sustainable packaging less, is a useful tool to guide packaging companies towards sustainable materials.

It is good that the packaging tax currently taxes single-use bottles more heavily than refillable bottles. But there is an opportunity to use the packaging tax more broadly and effectively.

We are thinking of:

A packaging tax on beverage packaging like in Norway where producers pay less tax the more they collect separately. Based on the Norwegian tax, the business sector there decided to introduce a deposit system because that is simply how you achieve the highest collection rates. We know from Germany that 95% collection and recycling is possible. If Belgium introduces a hefty packaging tax for every percentage point below that, the sector will take action immediately. Moreover, this does not mean consumers will pay more. Deposit return systems are highly effective and have not led to price increases anywhere.

Taxing packaging for drinks and other products made from virgin plastic (new plastic made from oil or gas) and virgin metal (new aluminium and steel based on raw materials) more heavily, while taxing packaging made from recycled material less.