Drinks packaging were originally exempt from the ecotaxes on disposable cameras, batteries and packaging introduced in 1993 (the Ecoboni law), as long as strict recycling targets were met by industry through its Green Dot scheme (20% of containers recycled in 1996, to rise to 70% in 2000). This ended in 2002 and the non-refillable drinks packaging charge was implemented on 1st April 2004.
To promote the use of refillable packaging by Belgian consumers. However, it was introduced in combination with a reduction in VAT (-15%) and excise duties on non-alcoholic drinks. ‘The packaging charge is levied on waste packaging of drinks. It is due at the time drinks packed in individual containers are released for consumption in the matter of excise duty or, where the packing of individual containers takes place after the drinks are released for consumption in the matter of excise duty at the time the drinks are brought on the Belgian Market', (FPS Finance, 2005, pp175).
The packaging charge is applicable to aluminium and steel beverages, as well as other one-way packaging materials such as beverage cartons or PET and glass bottles. ‘The packaging charge is levied on packaging of drinks. The following are considered as "drinks": water, lemonade, beer, wine, vermouth and similar beverages, other fermented beverages, ethyl alcohol, distilled beverages, unfermented fruit juices and vegetable juices (see article 370 of the ordinary law of July 16th 1993 finalizing the federal structure of the State).
Before the 1st April 2004, the tax depended on the drink - drinks in one-way containers cost slightly more than those in refillable containers. Taxes on one-way containers ranged from €0.25 (beer) to €0.12 (soft drinks) to €0.09 (mineral waters) per litre. At the same time, value-added tax and excise duties decreased for the same drinks sold in refillable containers. The government claims that the scheme is designed to be revenue-neutral in terms of overall tax income (SPF Economie, 2006).
In January 2005, the Belgian Government increased the ecotax on refillable packaging by €5.65/hectolitre of product packed in individual containers to €14.5037/hl. The Belgian Food industry, FEVIA, attacked the increase saying it is being used to raise revenue (Europen Bulletin, 2004). The packaging charge was reduced to €9.8537/hl in July 2005 (FPS Finance, 2005).
Refillable bottles are still exempt from the ecotax as long as they can be re-used more than seven times and they are actually being re-used. This collection and re-use is governed by a deposit scheme that places a minimum 0.16 euro deposit on containers larger than half litre and 0.08 euro for those under half litre. Milk is entirely exempt from the charge. No charge is levied on packages made mainly of wood, earthenware, chinaware or crystal.
European beverage and can manufacturers argue that the scheme has been poorly designed and would indirectly discriminate against foreign producers because the bulk of imported products would fall into the "heavily taxed category". They also maintain that environmental arguments supporting "automatic preference" for refillable containers have not been scientifically proven. There are ongoing legislative problems with this tax. In December 2005, the Belgian Court of Arbitration annulled part of the ecotax on disposable drinks containers and demanded amendments by 30 June 2006. In its judgement, the court of arbitration annulled for legal reasons the possibility to exempt one-way containers with a minimum recycled content from the ecotax. Critically for Europe's drinks industry, it also questioned the ineligibility of other one-way containers for exemption even where high recycling rates are achieved. The ruling was strongly welcomed by a lobbyist for manufacturers Nestlé and Danone, which brought the case (ENDS, 2005)
In December 2005, the Belgian Court of Arbitration accepted arguments put forward by the companies Nestlé and Danone. The court confirmed that under EU law, Member States can favour refillable over one-way containers and that the European Commission has not objected to a fiscal differentiation between refillable and one way packaging. The courts decision left open the question of whether the law should simply reintroduce a tax exemption for minimum recycled content or whether it should stipulate a tax exemption for one way drinks containers which achieve high recycling rates (Fostplus collection system) (Europen Bulletin, 2006).
ENDS, 2003, Environmental Daily, Issue 1111, Tuesday 27 November 2003
ENDS, 2005, Environmental Daily, Issue 2005,16 December 2005. Available at: http://www.environmentdaily.com/articles/index.cfm?action=article&ref=20056
Europen Bulletin, 2006, Issue 35, Jan/Feb 2006. Available at: http://www.europen.be/bulletin/EB35screen.pdf
Europen Bulletin, 2004, Issue 28, Nov/Dec 2004
Federal Public Service Finance (FPS Finance), 2005, Environmental Taxes and the Packaging Charge, Indirect Taxation, The Tax Survey Part II, Chapter 8, Belgium
SPF Economie, 2006, Vade-Mecum de L'enteprise, Impots: from Section 2.2.2: Ecotaxes et Cotisations D'emballage, Service Public Federal Economie, MPE, Classes Moyenne et Energie. Available at:
http://www.europa.eu.int/comm/environment/waste/studies/packaging/050224_final_report.pdf pp 157