Australian Think Tank Calls for ‘EU-Style’ Plastic Tax to Combat Waste

Australia Institute estimated that the government could raise nearly $1.5 billion a year with the tax while forcing companies to step up recycling efforts.

Recycled plastic bottles at the Northern Adelaide Waste Management Authority's recycling site in Edinburgh, Australia, on April 17, 2019. Brenton Edwards/AFP via Getty Images

An Australian think tank has called for the federal government to adopt an EU (Europe Union)-style plastic tax, claiming it would help the country deal with its plastic waste problem.

According to the Australia Institute, Australians consume around 3.8 million tonnes of plastic every year, with a projected annual consumption of 10 million tonnes by 2050.

Meanwhile, less than a fifth of used plastic is recovered through recycling, composting, or other methods and the remaining is dumped into the environment.

According to the 2025 national packaging targets, the government wants 70 percent of plastic packaging in the country to be reused or recycled by 2024, with an average of 50 percent recycled content included in the packaging.

However, experts have pointed out that Australia is unlikely to achieve those targets with its current progress.

Australia Institute’s circular economy and waste program director, Nina Gbor, believed recycling was not the right way for the country to get rid of its plastic waste problem.

“Australia is facing a growing tsunami of plastic waste and is expected to miss every recycling target it has set,” she said.

“If recycling was the solution to the plastic waste crisis, it would have been solved by now. Instead, it just encourages the production and consumption of even more waste that is choking our landfills and oceans.

“Unless we drastically reduce or gradually phase out plastics altogether, in favour of compostable materials, this plastic waste problem will continue to grow.”

Pointing to the growing plastic consumption, Ms. Gbor suggested the government follow the EU’s lead in imposing a tax on businesses importing or manufacturing plastic packaging.

How Plastic Tax Works

In 2021, the EU introduced a levy requiring member countries to pay a uniform rate of €800 (AU$1,310) per tonne of non-recycled plastic packaging waste.

The tax is designed to encourage the use of more recycled plastic and be a new revenue source to help the block recover from the COVID-19 pandemic.

The Australia Institute estimated that if a similar tax was introduced in Australia, the government could raise nearly $1.5 billion each year.

Pointing to another survey by the think tank itself, which indicated that 85 percent of respondents supported policies that would crack down on plastic, Ms. Gbor believed the Australian public would support a new plastic tax.

“We know that Australians support tougher action to curb plastic waste and that taxes and schemes requiring producers to fund the collection and recycling of plastic they produce are working overseas,” she said.

Recycling Boss Calls for Plastic Tax

This was not the first time that a plastic tax had been proposed among the public in Australia.

In May 2023, Sanjay Dayal, the CEO of Pact Group, which runs the country’s largest PET plastic recycling plant, made a surprise move by suggesting the government impose a UK-style plastic tax on his own industry.

The CEO cited very little progress in including recycled content in plastic packaging by Australian companies as the main reason for his proposal.

He also believed that his industry needed to be forced to speed up its recycling game.

“For those businesses that don’t meet threshold requirements, a financial penalty should be considered,” Mr. Dayal said, as reported by The Australian newspaper.

“This would both (discourage) businesses from continuing to waste resources and raise valuable revenue to reinvest in incentives.”

At the same time, Mr. Dayal revealed that the current plastic recycling situation in Australia was very different from what the public perceived.

“There’s a strong view among a lot of household people is that once I put (plastic) in the yellow bin, it’s going to go and get recycled,” he said.

“I think they would be enormously disappointed if they find out that 82 percent is still actually going to landfill.”