Van Rij leaves oil tax for plastic to successor

During the circular economy debate, MPs Kiki Hagen (D66) and Eva van Esch last week drew attention to the tax exemption for petroleum that is processed into plastic worth 14 billion euros. A tax advantage that is inexplicable for plastic recyclers, among others, who can hardly compete with producers of virgin plastic. The Netherlands can do little about the exemption itself, which is internationally regulated, except start an intensive lobby for its abolition. However, Hagen and Van Esch wanted to know from State Secretary Vivianne Heijnen (Infrastructure and Water Management) whether there are any options in the short term to remove the advantage for virgin plastic. Can’t the government impose a national consumption tax on this plastic?

Heijnen was not keen on it, but suggested that her colleague Marnix van Rij from Finance should return to the question. In a letter to the House today (October 10), he writes that the so-called non-energetic use of mineral oils can indeed be taxed with a new national consumption tax to be formed. But, he warns, this requires careful consideration of the policy effects and the desired mix of instruments. And he leaves that to his successor, given the outgoing status of the current cabinet.

Warning

As part of an inventory of fossil regulations, his ministry previously had research agency Kalavasta look at the impact of taxing non-energy consumption of mineral oils on three large steam cracking companies in the Netherlands: Shell Moerdijk, Dow Terneuzen and Sabic Geleen. Kalavasta warns in an impact analysis, to which Van Rij refers, that such a levy could have a major effect on the continuity of the Dutch basic industry. The products made by this industry have low gross margins and can generally be made anywhere in the world. In short: chemical giants can sometimes get their act together. And the question is exactly what environmental benefit will be achieved. Exactly what Heijnen also cautiously warned about during the circular economy debate.

Under magnifying glass

The fact is that fossil subsidies are now under a magnifying glass in The Hague. The House previously adopted a motion by Jan Paternotte (D66) and Henri Bontenbal (CDA), in which they call on the government to make the abolition of fossil benefits a diplomatic spearhead. A motion by Suzanne Kröger (GroenLinks) and Raoul Boucke (D66), who want to see a detailed plan from the cabinet to phase out fossil subsidies, will probably be voted on this week.