Understanding the Irish plastic bag levy
By: Maria Kelleher
Solid Waste & Recycling Magazine – 2008-10-01
Ireland’s plastic bag levy is one of the first, if not the first, levy on plastic grocery bags. It was introduced on March 4, 2002 in an effort to reduce plastic bags in litter. It applies to grocery bags only. Plastic bags that are exempt are those that contain meat, poultry, fish, loose vegetables, confectionary, hot or cold cooked food, ice, small plastic bags, and bags for items sold on board aircraft or ships. (Biodegradable plastic bags are also subject to the levy as the focus of the levy is on litter reduction and the Irish government considers that plastic biodegradable bags still contribute to litter.)
Plastic bags designed for reuse are exempt from the levy if retailers charge at least 70 cents (about 0.7 Euro or $1 CDN) per bag. All retailers subject to the levy provide some reuse options at the till.
The plastic bag levy was discussed in Ireland initially in 1994, but gained traction when a coalition government elected in 1997 had included litter reduction as an election promise. A consultant’s report evaluated a number of economic instruments which could be applied to reduce the use of plastic bags. The report suggested a levy of two Euro cents (five cents CDN). The Irish government decided that the levy needed to be 15 Euro cents (about one Canadian quarter), which was considered sufficiently high to give most consumers “pause for thought.” The Irish government has stated that it didn’t “set out to save the world” with the plastic bag levy; the objective was clearly litter reduction, with consumer education as a secondary benefit. The economic study carried out prior to the levy indicated that most of the lightweight plastic bags impacted by the levy were manufactured in Asia, and therefore the job impacts on the local Irish economy would be minor.
Draft regulations were developed in September, 2001. The final regulations were signed by the minister in December, 2001 with a commencement date three months later. A six-month phase-in period from September 2001 to March 2002 was used to:
• Change computerized till roll and accounting systems;
• Order supplies of Bags for Life (reusable bags which must cost at least 79 Euro cents to be exempt from the levy);
• Allow the revenue commissioners to implement a new computerized system for levy returns; and
• Distribute a supply of levy return forms to some of the 30,000 retailers who were subject to the levy.
Levies are remitted to the revenue commissioner by retailers (designated as the collection points) every three months and are based on inventory counts of plastic bags sold. Late payment interest charges apply if submissions are beyond the stipulated deadline. No special consideration is given to retailers by the Irish government for collecting the levy –it is treated the same as other taxes such as VAT. In fact, involvement of the revenue commissioners in the system has ensured that enforcement of the levy is relatively smooth as most retailers would rather pay the levy than have the revenue commissioner’s “pay them a visit.”
One of the key features of the plastic bag levy is that retailers are not allowed to absorb the cost. Retailers must charge the levy to each customer and can be prosecuted if they give out any bags for free. The levy must be collected from the consumer and act as a public education tool; one if its secondary objectives is to get people to make more environmentally friendly choices and use reusable bags.
The levy immediately reduced the demand for plastic bags from 328 bags/capita in 2001 to 21 bags/capita (a 94 per cent reduction) in 2003. After three years, consumption of plastic bags increased from 21 to 31 bags per capita in 2006, and had reached 33 bags/capita in early 2007. Even though this was still a 90 per cent reduction from the 2002 baseline, the Irish government decided to increase the levy to stop the upward trend in plastic bag use. In July 2007 the levy was increased to 22 Euro cent. By November 2007 the plastic bag consumption had dropped to 26 bags/capita.
The Irish government has stated that plastic bags made up about five per cent of visible litter before the levy was imposed. Litter studies after imposition of the levy identified a substantial reduction in plastic bags in litter, measures as follows:
• December, 2002: 0.32 per cent
• August 2003: 0.25 per cent
• August 2004 and 2005: 0.22 per cent
Detractors claim that the litter statistics are skewed, and that the actual value was only 0.75 per cent in 2002. Different litter measurement methodologies are used by different groups measuring litter in Ireland, and therefore a direct comparison of different sets of statistics is not possible. Regardless of the statistics, there has been a substantial reduction in wind-blown plastic bags snagged on trees and fences throughout Ireland since the levy was imposed, and anyone you talk to will support the fact that the countryside is substantially cleaner looking since the levy was introduced. (As someone who travels to Ireland frequently, the difference is noticeable and very dramatic.) Locals comment that you can see the difference when you travel to Northern Ireland where no levy is in place.
To date, the Irish plastic bag levy has raised 110 million Euros ($165 million CDN), with 17.5 million Euros collected in 2005 and 20 million Euros collected in 2006.
Retailers do not object to the levy as they sell more bin liners and Bags for Life, and save on the costs of purchasing plastic bags which used to be given to customers free of charge.
The government has carried out a number of public opinion polls to measure acceptance of the levy:
• In 1999, most people indicated that they were willing to do something in principle provided it does not inconvenience them or does not require a major effort on their part;
• In 1999, 40 per cent of the Irish public stated that they would not be willing to pay the levy.
• In 2003, 91 per cent of the Irish population thought the levy was a good idea as they could no longer see plastic bags on the street; they thought it was better for the environment and they thought reusable bags were more convenient for holding shopping.
• Six per cent did not support the levy in 2003 as they found it frustrating when they forget to bring reusable bags to the grocery store, and they missed having plastic shopping bags around the house;
• When asked how they get their groceries home from the grocery store, 90 per cent bring reusable bags, six per cent use cardboard boxes, one per cent other means, and four per cent buy plastic bags.
The Environment Fund was established under new legislation in 2001 for revenues from the plastic bag levy and landfill tax. These are used to fund a range of waste reduction initiatives (MRF and composting facility construction, litter and other beneficial environmental initiatives, etc.), but cannot be used to establish new waste disposal capacity. The Environment Fund is administered by DoELG (Department of Environment and Local Government).
Local authorities are the enforcement agencies for the levy and follow up on any customer complaints.
Following the success of the plastic bag levy, the Irish government tackled three other elements of litter: chewing gum, ATM receipts and fast food packaging. A Gum Litter Task Force has been established and an industry-managed two million Euro fund has been set aside for litter education. The banks developed a strategy to tackle ATM receipts (bins outside ATM machines and a request button for ATM receipts at ATM machines). The fast food packaging strategy has not progressed to date.