New chemicals tax even worse for the environment
The chemicals tax has not helped reduce the amount of hazardous substances in people's homes. Yet the government is going ahead and even raising the tax, while reducing environmental incentives. TechSverige writes about this together with, among others, ElektronikBranschen in a debate article.
The chemicals tax has not helped reduce the amount of hazardous substances in people's homes. Yet the government is going ahead and even raising the tax, while reducing environmental incentives. TechSverige writes about this together with, among others, ElektronikBranschen in a debate article.
The other day, the consultation period for the report "A simpler and clearer chemicals tax" ended. The title of the report suggests that the government has taken on board the criticism that we and several others have directed at the electronics tax since it was introduced five years ago. Unfortunately, the proposal is far from sufficient to address the consequences of the tax for the Swedish electronics industry and customers.
Phasing out substances that are hazardous to humans and the environment is of course an effort that we support and encourage. But this work is not helped by the fact that electronics are becoming more expensive in Sweden. Electronic products are manufactured for a global market and manufacturers rarely, if ever, produce specific products for the Swedish market or change global production simply because Sweden is introducing new regulations. We warned early on that the environmental benefits would not materialize and that the tax would lead to more expensive electronics products. If, on the other hand, substances are banned or restricted throughout the EU, production will gradually change. The government should put its resources into driving this work instead.
The substances taxed by the electronics tax are common in flame retardants and are present in products to make them fireproof. There are stringent safety requirements for electronics products, which is also highly reasonable. The aim of the tax was to reduce the amount of hazardous chemicals in people's homes, which sounds laudable. However, the environmental impact has proved to be lacking and the main effect is an income to the state of 1.2 billion annually, as a result of more expensive products. In addition, the structure of the chemicals tax has led to products in professional environments also being taxed. Despite this, the tax is not abolished.
Since the electronics tax was introduced, criticism of it has only increased. After repeated pressure from Parliament, the government finally commissioned the Swedish Tax Agency and the Swedish Chemicals Agency to evaluate the effects of the tax. The evaluation showed that the tax has increased administration for both companies and authorities, while it has not contributed to reducing the amount of hazardous substances in people's home environment. In line with the criticism expressed by the industry.
However, the government has chosen to ignore the criticism and the recommendations of the expert authorities and has instead implemented tax increases and, as if that were not enough, recently also proposed to annually adjust the tax upwards by a further 2%. Responding to criticism of the inefficiency of a tax by continually raising it is a logic that we find very difficult to understand.
It is hard not to distrust the government's intentions. This is not helped by the latest proposal, which makes the electronics tax even worse in some areas. When the report was presented, the government made a big deal about simplifying the deduction rules and increasing the deduction levels. Unfortunately, the government's proposal includes reduced opportunities for deductions for companies that have worked actively to replace hazardous chemicals. This reduces the incentives to switch to environmentally friendly alternatives.
Among other things, it is proposed that products containing phosphorus should not be entitled to tax deductions. This means that products with environmentally certified flame retardants will be taxed higher than today - which risks leading producers to choose less environmentally friendly alternatives to avoid phosphorus and taxation. This would further defeat the purpose of the electronics tax and could lead to an increase rather than a decrease in hazardous substances.
An absurd effect of the electronics tax is that even products that are completely free of the specified substances are taxed and thus do not avoid the tax. Today, companies are allowed a 90% deduction and the new proposal is to increase the deduction to 95%. But the fact that substances that are not used at all should not be taxed is a "hygiene issue" and a requirement if the tax is to have any credibility as an environmental control measure.
A starting point in environmental policy must be to use effective instruments with a real positive effect on the environment. Hazardous substances should be banned or restricted, but the legislative work still needs to take place at EU level, where it has a real impact. That is where Sweden should focus its efforts. A bad tax that does not provide the environmental benefits it aims to achieve must be abolished - anything else is completely unreasonable.
Christina Ramm-Ericsson
Head of Industrial Policy, TechSverige
Pernilla Enebrink
CEO, ElektronikBranschen
Kent Oderud
Chairman, APPLiA - Home Appliances Sweden
Mats Hedenström
Head of Industrial Policy, Swedish Trade Federation
Anna Melvås
CEO, Professional Hygiene & Cleaning Association
Henrik Jansson and Ulrika Flodberg
Directors, Industry Association for Large Kitchen Suppliers
Maria Rosendahl
Head of Industrial Policy, Teknikföretagen
The debate article was originally published in Aktuell Hållbarhet on April 22, 2022