Speaking of the prospects of an incineration tax, Eunomia Director Mike Brown has made the case that an incineration tax could be the way that the Government responds to falling landfill tax returns, stating that “for a government approaching the event horizon of a financial black hole its attraction could be irresistible”, with the environmental justification being to promote recycling and reflect the negative GHG impacts of incineration (Source). The whole article is well worth reading.

UKWIN sent a letter in February 2012 calling on George Osborne to introduce an incineration tax, and have noted that the case for such a tax was made in the Defra June 2011 Waste Review report and associated documents in our Waste Review briefing.

The idea of an incineration tax is nothing new, and it has been supported by various parties over the years. Indeed, many European countries already have an incineration tax. The OECD Working Party on Environmental Performance advised Germany to consider introducing an incineration tax in January 2012 (Source) and European Commission research reported in April 2012 that: “There is a broad overall trend that higher incineration charges are generally associated with higher percentages of municipal waste being recycled and composted, indicating that higher incineration charges may help to push waste treatment up the waste hierarchy” (Source).

The Environment, Transport and Regional Affairs Committee stated in 2001 that: “We recommend that the Government introduce a tax on incineration. This tax would ensure that waste management did not simply shift from being a landfill-dominated system to an incineration-centred one” (Source).

The 2009 Policy Exchange report A Wasted Opportunity: Getting the most out of Britain’s Bins recommended that: “The landfill tax should be reformed into a broader waste tax covering all disposal processes in line with the waste hierarchy. The rates of this tax would reflect the relative damage done to the environment by different processes and incentivise reuse, recycling and energy recovery, including the separation of food waste where possible. By introducing taxation on incineration a clear preference is signalled to reduce, reuse, recycle or compost where possible.To limit uncertainty, escalating rates should be set over a long enough period to encourage investment.”

The 2007 Blueprint for a Green Economy submission by the Conservative Party Quality of Life Policy Group recommended that: “An incineration tax would ensure that the relative cost of recycling reflects its environmental desirability” (Source).

Chris Huhne stated in 2006 that: “The Liberal Democrats believe that the Government should set a target of Zero Waste for all municipal rubbish in the UK by 2020. This will mean more doorstep collection of dry recyclables and reforming the landfill tax into a broader waste tax, to remove the incentives for incineration and other less sustainable waste disposal options.” (Source).

A conclusion drawn by UKWIN is that the justification for an incineration tax is very persuasive and the prospect for it being introduced is very real, especially given the pledge in the Coalition Programme for Government that “We will increase the proportion of tax revenue accounted for by environmental taxes” (Source) and the Defra acknowledgement that “a negative externality persists” in relation to incineration (Source). As such, local authorities should take this into account before signing long-term waste management contracts. Another interesting angle is whether Scotland would introduce its own incineration tax as part of its devolved taxation powers.

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