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Ireland prepares to introduce environmental and waste recovery levies

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Mattia Piol of Deloitte Ireland explains the changes to environmental law that are delineated in the Circular Economy Bill.

The Circular Economy, Waste Management (Amendment) and Minerals Development (Amendment) Bill 2022 (Circular Economy Bill), which is currently under discussion in the Irish Parliament will introduce an environmental levy and a waste recovery levy , along withother several provisions.


The circular economy plays an important role in the EU green agenda. In March 2020, the European Commission adopted a circular economy action plan which is one of the main building features of the European Green Deal. The aim of the transition to a circular economy is to reduce the pressure on natural resources and to create sustainable growth and jobs. It is also a prerequisite to achieve the EU’s 2050 climate neutrality target and to halt biodiversity loss.

Across Europe, countries are also adopting circular economy practices at the national level. The Irish government had already set upstrategic plans for achieving a circular economy with the 2020 Waste Action Planfor a Circular Economy and the 2021 Whole of Government Circular Economy Strategy.

The Circular Economy Bill places those plans on a statutory footing. The aim is to reach a more sustainable pattern of production and consumption that moves away from the economic model of single-use and throw-away materials and goods, though the promotion of reused resources and reduced consumption.

The circular economy should not only have a positive environmental impact but can also potentially provide new economic and social opportunities.

Environmental levy

Section 11 of the Circular Economy Bill provides that the Minister for the Environment, Climate and Communications (the Minister) may, with the consent of the government, make regulations setting an environmental levy for the supply to customers, at supermarkets, service stations or other specified classes of retail premises, of the following products:

  • Single-use cups;

  • Single-use containers;

  • Single-use packaging (or specified classes thereof); and

  • Plastic bags or specified classes of plastic bags. (These regulations will replace the Waste Management (Environmental Levy) (Plastic Bag) Regulations 2001 and Waste Management (Environmental Levy) (Plastic Bag) Order 2007).

The regulations should be madewhere there is a suitable reusable alternative or a suitable alternative with a lower level of material wastage, and where the alternative is, or could be made, readily available.

The Minister must consider the material wastage associated with the single-use item or class or classes of single-use item. They will then set the levy amount with an eye to reducing waste and reducing the use of the single-use item concerned. This amount must be in the range of €0.20 to €1.00 ($0.20 to $1.02) for each item, and it can be amended by the Minister no more than once in each financial year,linked to changes in the consumer price index.

The environmental levy will be payable by the person who carries out a business at the above-mentioned retail premises. The regulations must specify the collection authority to which the levy is payable, and will confer the related powers for the collection and recovery of the levy.

Furthermore, the Bill describes a list of items which may be provided for in the regulations, including the keeping and furnishing of records and the exclusion of certain classes of single-use items from the levy, and prescribes the interest and the penalties applicable in caseof failure to pay the levy.

Waste recovery levy

Section 29 of the Bill provides for the insertion of a new section 73A (the waste recovery levy) into the Waste Management Act 1996, providing for the Minister, with the consent of the government, to make regulations setting a chargeable levy related to waste recovery activities, or the export of waste for recovery.

Different levies may apply to different classes of activity. However, the total amount of the levy will not exceed €120 per tonne. The Minister may amend this amount no more than once in each financial year by no more than €50.

The recovery levy will be payable by the person or entity that carries out the waste recovery activity, or, where the waste is to be shipped for recovery, by the waste holder or such class of waste holder as may be prescribed.

The regulations must also provide that the levy is payable to the local authority, in the functional area of which the waste recovery activity concerned is carried on. Alternatively, where the waste recovery activity is to take place outside of the state, the regulations will provide that the levy is payable to Dublin City Council, and will confer the related powers for the collection and recovery of the levy.

The Bill also provides that a person or entity that fails to pay the recovery levy shall be guilty of an offence, and specifies the interest to be payable.

Final considerations

Climate change has become a key priority in the political agenda at both Irish national level and intentional level. In this respect, environmental taxes are a useful instrument to help to achieve the climate goals. An increasing number of environmental tax provisions have been introduced in the last few years to cover a broader number of sectors. As an example, the current Plastic bag levy will be replaced by the new Environmental levy that will cover a broader number of items.

More environmental tax provisions will be expected to be introduced in the near future.

It is important that business operators are informed about these changes in order to reduce tax burdens and to plan their business activities in a new manner that should be both efficient and environmentally friendly at the same time.

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