EUROPEN, the European Organization for Packaging and the Environment, has written to European Commission President José Manuel Barroso and representatives of the 27 EU Member States, urging them not to pursue the idea of making packaging a priority area for the application of economic instruments.

The concept was put forward in a recent letter to the Commission President from UK Prime Minister Gordon Brown and France’s President Nicolas Sarkozy addressing the role VAT might have in combating climate change. It is not clear to EUROPEN members why particular reference is made to packaging in this context, but EUROPEN is concerned that initiatives to apply multiple layers of charges to packaging could divert attention from more fundamental measures that need to be taken to address climate change.

“Further measures would only add to existing ‘stealth taxes’ on consumers and distortions of competition within the packaged goods sector,” said Julian Carroll, Managing Director of EUROPEN. “We consider the idea is flawed because it fails to take into account the fact that the packaged goods sector is meeting the ambitious EU recovery and recycling targets it has been set, and has successfully decoupled waste generation from economic growth.”

In its letter, EUROPEN sets out the positive role that packaging plays in protecting products and thereby in preventing waste. This saves energy and natural resources, with the result that packaging’s impact on climate change is minimal and may in some cases actually result in a net reduction in greenhouse gas emissions1. “The priority should be to avoid under-packaging, rather than to penalize its use,” said Carroll.

The possibility of applying reduced rates of VAT to certain packaging systems would also be unjustified, ineffective and unworkable in EUROPEN’s view. “Any attempt to favour some packaging systems over others by applying a reduced rate of VAT would be disproportionate to any real environmental differences and would distort  competition,” said Carroll.