A proposed “chemicals tax” currently being considered by the Swedish Government would impose a minimum 2.50 €/kg (up to 9.25 € per product) on a wide range of electrical and electronic goods sold in Sweden, with a tax penalty of 100% or 300% of this tax for products containing certain types of flame retardants (up to a maximum tax level of 13 €/kg or 35 €/product).
Product categories proposed for taxation include e.g. washing machines, fridges, computers, mobile phones, televisions and monitors, CD and DVD players. Strong opposition is expressed both by the European electronics and chemical industries (Digital Europe, Cefic), by E&E manufacturing companies, but also (for reasons of implementation feasibility) by Sweden’s own tax and customs authorities. The tax proposal follows a Government order requiring action to reduce public exposure to brominated flame retardants, but the current proposal also includes tax penalties for additive (but not reactive) phosphorus flame retardants. Objections to the proposal include:
- Conflict with EU single market (1)
- Impossibility to tax internet purchases, currently nearly 1/3 of electronics sales and rising
- No scientific criteria for tax differentiation: this is based only on whether FRs contain bromine (reactive or additive), chlorine (reactive or additive) or phosphorus (additive) and not on hazard or risk
- There is no legally reliable nor scientific method for establishing whether FRs in a product are “reactive” or “additive” (2) and no way to verify declaration of such information for imported goods
- Given the considerable implementation issues above, and the high impact of declaration and administration on electronics manufacturers and sellers (especially SMEs), there is no evidence that the tax will be cost effective
Pinfa already wrote to the Swedish authorities on 10th April 2015, following first discussions of this chemicals tax proposal. pinfa recently restated this position to the Swedish authorities. pinfa underlines:
- phosphorus flame retardants (P-FRs), often in synergy with other PIN FRs,are the most effective fire safety treatment alternative to halogenated FRs
- additive P-FRs are essential and currently non substitutable for fire safety in applications including high-performance polymers, textiles, intumescent protective coatings
- their action mechanism in polymers (surface char layer) can reduce smoke emissions in case of fire
- phosphorus probably does not generate persistent toxins in case of fire
- the term “additive P-FRs” includes inorganic phosphates which have no environmental or health issues, natural and bio-sourced flame retardants (e.g. DNA, phosphorylated saccharides or cellulose …)
- a tax penalising additive P-FRs would penalise PIN flame retardant systems which can provide optimal solutions for fire safety, health safety and environmental impacts
TCO, the health, environment and worker protection label, has also taken position against the tax as currently proposed (3). TCO underlines that by also including phosphorus-based products, the proposal will not achieve its goal of inciting industry to substitute flame retardants with more positive health and environment profiles.
Sweden Government report on new economic instruments in the area of chemicals, 30th March 2015 and report SOU 2015:30 “Report of the Chemical Tax Commission, Stockholm 2015: chemical tax on certain consumer goods containing chemicals” (in Swedish with English summary) http://www.regeringen.se/sb/d/19734/a/256626 See pinfa Newsletter n° 52
Proposal for legislation (“Kompletterande förslag avseende kemikalieskatterna” Ministry of Finance Tax and Customs Department – Additional proposals for chemical taxes), March 2016, and list of 140 flame retardants indicating if they are identified as reactive or additive see note (1) above): http://www.regeringen.se/rattsdokument/departementsserien-och-promemorior/2016/03/kompletterande-forslag-avseende-kemikalieskatterna/
Swedish Council opinion of 12/5/2015 considering that “the impact assessment does not meet the requirements of the (2007) impact analysis of regulations” http://www.regelradet.se/wp-content/files_mf/1431952219RR_2015_000140_YTTRANDE.pdf
(1) See Korea comments that the Sweden tax could be a considered a barrier to trade by the World Trade Organisation, WTO Committee on Technical Barriers to Trade (TBT), 17-18 June 2015 http://www.inmetro.gov.br/barreirastecnicas/PDF/atas_comercio/TBT_M_66.pdf
(2) At present, proposal is to refer to a list of FRs specifying which are additive and which reactive, but the currently proposed list of 140 FRs contains errors and is incomplete, and no process is proposed for ensuring accurate and objective update and enlargement of this list
(3) TCO “Chemical tax on products misses the mark”, N. Rydell, June 2015