The European Recycling Industry's Confederation (EuRIC) warmly welcomes the proposal made by the Czech Republic at the recent Environment Council meeting to explore lower VAT rates for products with recycled content. The umbrella organisation reaffirms its strong support for economic incentives including fiscal instruments as powerful tools for the transition to a circular and climate-neutral economy.
EuRIC points out that using recycled materials in manufacturing instead of extracted raw materials "brings significant and well-documented environmental benefits, both in terms of resource efficiency and climate and energy savings". But these environmental benefits are not internalised in product prices, although they are often the most important factor in consumers’ choices and public procurement. "Therefore, fiscal incentives in the form of lower VAT rates have a major role to play in better rewarding environmental benefits and in stimulating sustainable consumers’ choices by increasing the price competitiveness of sustainable products", the industry organisation commented.
"It is fundamental to consider fiscal incentives as key enablers for the transition to a more circular and climate-neutral economy," said Emmanuel Katrakis, EuRIC's secretary general. "The Czech Republic's formal request to the Council to examine the possibility of reducing the VAT rate on products using recycled materials is a first very positive step. Indeed, it is necessary to ensure that tax rules at EU and national level are in line with the objectives of the Green Deal, which is often not the case".
EuRIC says it looks forward to working with the Spanish Presidency of the Council, EU member states and EU institutions to introduce reduced VAT rates for products with recycled content. This "will undoubtedly stimulate recycling and complement the regulatory measures introduced for different waste streams", according to EuRIC.