Financing landfilling and waste management

Landfill Tax in Estonia14.05.2008, Budva

Peeter Eek

Estonian Ministry of the Environment

peeter.eek@envir.ee

Background

Environmental Charges, incl. 'Tax for landfilling' was introduced on early 1990-s

On that time, were the Environmental Charges considered as main source of Income to the 'Environmental Foundation' (since 2000 Center of Environmental Investments), which have been main financial institution for Environmental Projects, until the EU funding was opened after 2001 (ISPA, CF, ERDF etc.) - the aim to Drive Waste management, was not primary on this time

The landfill tax was applied to all type of waste (incl. industrial , thus with differentiated tax levels. As absolute majority of the landfilled waste was related to the oils-shale industry, then was tax level for Household was 'very low'

Economic measures in Waste management

Polluter pays' – as long as possible.....If imply 100 % - no support needed!

Landfill tax

'Producer responsibility' principle on ELV, WEEE, Batteris, tyres, packaging

Packaging tax, if defined recovery rates not metMandatory Deposit on bewerage and low alkohol drinks

Landfill tax 2002-2009

Financial Challenges of Waste management

1) Within ca 10 years (2003-2013) should all old dumping sites be closed and covered (i.e. to pay a loan of last 30-40 y., nothing was accumulated...)

2) An the same time NEW INFRASTUCTURE should be established for the next 25-30 y.

=> Within ca 10 y We should INVEST the Sums on 'time-span' of nearly 60-70 y. One the same time could the 'polluter pays' principle be used only partly

Landfill tax as part on the Environmental investments supports

Part of the Landfill tax is paid to the Municipalities

Since 2004 is part of the landfill tax for landfilling of the household waste paid to the municipality, where waste was collected. Local waste tax, as alternative, was politically not supported (as 'new tax')

On 2007 this was ca 5,9 €/t Pro-s: - existing tax, easy to administrate- it gives ca 2 M€ income for municipalities to cover cost

of municipal waste management system (container parks etc.)

Contra-s: - Rigid, the municipalities can not 'adjust the tax' by

local needs- on longer Perspective will be contra-motivating for

large scale recovery operations, as municipalities will loose part of their income

Number of Operating Landfills 2000-2005

Recovery of Waste – only for fun?Disposal is often cheaper – why to

recover then? Thus, Total Waste Recovery was

reported on 2005 33 %It includes most part of oil-shale gangue,

ca 200 th.t of oil-shale ash (ca 4 % from total ash amount...), 750 th.t of wood waste etc – BUT it means also ca 70 % was landfilled

As regional landfill projects have been seen as 'essential' and supported finacially, but often small-scale recovery is not – then actually is recovery been 'undersupported'

Conclusion: for new projects – recovery operations should get 'better ranking', but 'cost-benefit' principle should be followed

Cost of the Household Waste Management – too high or too low? (1)

There is wider experience, that for diverting waste away from landfilling towards recovery there must be as economic incentives as well as regulatory support. In Estonia nowadays landfilling of waste costs ca 40 €/t (thus less on 'old landfills').

The landfill tax (ca 8 €/t on sanitary new landfill and ca 16 €/t on 'old-ones') is included in the 'gate fees of the landfills'.

For the households the waste management service fee is ca 65 €/t, but on the average household basis ca 4-8 € in month, what is ca 3-5 % from living rooms related costs in central heated dwelling houses.

Cost of the Household Waste Management – too high or too low? (2)

There are opinions raised on the same time, that waste management is already too expensive for the average household – but also, that this all is too cheap to motivate somebody to care more for waste incl. source separation. As well waste management companies was mainly on the opinion, that low landfilling price didn't motivate to deal with alternatives to landfilling – hopefully is the situation changed, as on 2006 the landfill tax raised considerably.

Municipal Waste Collection

Under Waste act, are Municipalities obliged to organize a municipal waste collection scheme:- to set up list of waste holders (waste holders register i.e. households, companies)- to define service packages on waste management, incl terms for source separation- organize a tender and pick up a best service offer, within a contract period (up to 5 y) is only contract Partner allowed to collect municipal waste in the given area- the waste holders, which was not excempted from the system by Municipality, are counted as joined, and charged according to minimum package of service- the prices have came down in the towns, on some places even remarkably, but in the Country-side, it could not be so....

Cost of the Household Waste Management – too high or too low?

Discussion – municipal tender is clearly more effective in logistics and with the supervision purpose, but is critized as - limiting 'free market' (???) - not-flexible, if service provider fails to offer service on expected level

BUT, Freedeom on the level of waste

holder means on most cases as well 'freedom for illegal activities'

'Flat fees' or PAYT (Pay as You Trough) systemWider discussion – how to motivate 'reduction of waste' and source separation on best, when up to 10-15 % (makes up to 75 % in some Country-side municipalities...) from waste holders are not been joined to the collection system?

'Flat fee' – every waste holder (household) pays at least for minimum service package, even when container/bag was not fully filledPRO – demotivates littering and 'fly-dipping and home incineration', CONTRA – demotivates also sorting and waste reduction

PAYT system, based on really delivered weight or volumePRO – motivates sorting for recovery, and waste reductionCONTRA – motivates also fly-dipping and home incineration'

Conclusion: In the dwelling houses (70 % of population) there is anyway a 'mixed approach', individual household efforts of reduction are dissolved on 'collectice collection costs'As a first step, the flat fee system is preferable, to join all waste holders to the collection system, with the aim to switch more towards to the PAYT system in next steps

Costs of the Household Waste Management – too high or too low?

Conclusions (1)The Landfill Tax have been essential Part of the Financial Support scheme for Environmental investments – incl. Support to build new landfills and close 'old-ones'.

This is ensuring 'softer landing with the landfills' – from ca 200 landfills to ca 8 non-hazardous landfills on 2009, where 'gate fees have changed from 10 (but even 0 !) to 40 €/t with less then 10 y

To high lanfill gate fee could increase illegal landfilling – supervison remains a 'must' – but waste management service fees should follow other economic developments

Clear influence to promote recovery of waste stream, which was some years ago (end of 1990-s) yet landfilled (as was so cheap...) :

- Construction-Demolition waste, - sludge, - garden waste, - wood waste etc.

Now it is clearly more 'waste management driving tool' – to motivate recovery, but trough 'support system' to equlaize regional differencies also

Conclusions (2)

There is plan to raise landfill tax at least 20 % on 2009, but not 2010-2011, as the aim is to take control over administrative rise of prices from 2010 at least – with the aim to join 'Euro-zone'

On 2011 is expected as well, that residual waste will be incinerated in Tallinn area (ca 220 th t/y) – it will influence the landfilling price, as landfilling will decrease rapidly (+ efforts to develop source separation etc. recovery operations)

Will the 'incineration tax be needed', to secure recycling ???

New Challenges on Horizon - European Parliament resolution on a Thematic Strategy on

the recycling of waste, 13.02.2007

EP: Calls for the quantities of waste for disposal to be reduced to a minimum; calls on the Commission again to propose a revision of the Council Directive 99/31/EC of 26 April 1999 on the landfill of waste(8) , including a timetable:

– from 2010, a ban on landfill of non-pretreated waste with fermentable components;

– from 2015, a ban on landfill of paper, cardboard, glass, textiles, wood, plastics, metals, rubber, cork, pottery, concrete, brick and tiles;

– from 2020, a ban on landfill of all recyclable waste; – from 2025, a ban on landfill of all residual waste, except where

this is unavoidable or hazardous (e.g. filter ash);

Comment: This resolution is NOT BINDING, but shows the Direction of Policy ?!

Peeter Eekpeeter.eek@envir.ee

Thank You for Your attention!