Published 2021-10-18

This post is also available in Swedish

“The chemical tax counteracts a circular transition”

The chemical tax is a barrier to the circular transition and, to promote reuse, second-hand products should be excluded. Mattias Lindahl, Programme Director for Mistra REES, also believes that other regulatory frameworks need to be reviewed so they do not hinder circular business models.

In a debate article titled “Kemikalieskatten slår mot återanvändning” (the chemical tax penalises reuse), published in Svenska Dagbladet on 15 October, Mattias Lindahl and his co-contributors write that the chemical tax counteracts the reuse of electronic products, as they are subject to double taxation. In the article, they refer to the Swedish Government’s proposed budget and its emphasis on the transition to a circular economy to achieve Sweden’s environmental and climate goals, stating that over 80 per cent of the climate impact of electronics arises during production. Meanwhile, electronics is the world’s fastest growing waste stream, so extending the life of a product through reuse is very important in working for climate benefit. Currently, however, the consequence of the chemical tax is a reduced value for second-hand electronics, resulting in disposal or the electronics being sold abroad.

The Mistra REES – Resource-Efficient and Effective Solutions – research programme works with industry and other stakeholders to build knowledge of more resource-efficient and effective solutions based upon a circular economy. Mattias Lindahl, Professor at Linköping University is the Programme Director for Mistra REES.

How is the problem with the chemical tax apparent in Mistra REES’ work?

“Inrego (editor’s note: a company that works on the recycling of IT products) was a stakeholder in the first phase of Mistra REES. We raised this problem a good while ago, in a debate article in SvD that was published on 12 June 2017, but the politicians chose not to listen. The problem is probably that the intentions with this tax were good, everyone agreed, and a proper impact assessment was never conducted. Unfortunately, this is common, particularly when there are no objections to a proposed bill.”

Is Mistra REES highlighting any other laws and instruments hindering the circular economy?

“We have highlighted several acts and instruments, such as taxation and ownership regulations. This is partly as a result of Mistra REES, but also linked to other research projects. We have published some results in a small handbook on as-a-service sales that is available for free (in Swedish). We have also provided input for colleagues who published a comprehensive article in Skattenytt, covering taxation issues. To summarise, the legal issues often arise as challenges, and we can see that there is a need for a thorough review of the current legal frameworks to see where the barriers are and how they should be dealt with. Legislation is largely about new policies and rules, but many of the barriers to a circular economy are existing laws and instruments that are based upon linear business models. These may need to be modified. Often, new rules and new legislation that are implemented are also based on a linear economy and linear business models, and one concern is that their consequences for a circular economy and circular business models are not investigated.”