New revenue in the European Union - The plastic packaging waste-based own resource

  • 2022/05/11
  • kutatocsoport5


From 1 January 2021, a new EU own resource, a contribution based on non-recycled plastic packaging waste was introduced in the European Union's budget for 2021-2027 as a new source of revenue. The European Union would like to encourage the Member States to reduce packaging waste and, through the implementation of the European Plastics Strategy, to help Europe move towards a circular economy that minimizes the waste and the leakage of resources, emissions, and energy. The question may be how this change will affect the operation of the Union and how it will work in practice.


It is well known that the European Union's potential for recycling plastic waste is untapped. Around 26 million tons of plastic waste is generated in Europe each year, less than 30% of which is recycled.[1] With a small percentage of plastics returning to the economy, the annual cost of treating plastic waste is between 70 - 105 trillion euros, and the European Union cannot afford this expenditure in the long run. To make environmental protection as effective as possible, the European Union has already taken a number of steps, such as laying down rules on marine litter or significantly reducing the use of plastic bags in several Member States.[2] However, the plastics industry is not a negligible area for the European economy, therefore increasing the sustainability of the sector can offer new opportunities, helping innovation, job creation, and competitiveness. Integrating such a complex value chain can benefit everybody from plastic manufacturers, retailers, consumers and recyclers.[3] But how does this fit into the circular economy? In December 2015, the Commission adopted a new EU action plan,[4] covering the main aspects of the whole lifecycle and value chain of plastics. In 2017, the Commission confirmed that it will focus on the production and use of plastics and will work to ensure that most plastic packaging will be recyclable, and landfills will be banned by 2030.[5]

Revenues of the European Union before the new source of revenue

In view of the importance of this topic, describing the European Union's revenue system before introducing a new source of revenue is of great significance. The EU budget is financed almost entirely (98%) from its own resources, and there are several sources of revenue. The main source of EU funding is revenue from non-exchange transactions, including own resources. Three types of own resources are known: traditional own resources, the own resource based on Value Added Tax (VAT) and the own resource based on Gross National Income (GNI). Other revenues from EU activities (such as competition fines) generally account for less than 10% of total revenues.

The Union's "traditional" own resources include customs duties (levied on imports from third countries) and sugar levies levied on economic operators and collected by the Member States on behalf of the EU. Traditional own resources must be entered in the Commission's account with the Treasury or National Central Bank by the Member State at the latest on the first working day following the 19th day of the second month following the month during which the entitlement was established (or recovered in the case of the separate account).[6]

The essence of the VAT-based own resource is that a certain percentage of the estimated amount of value added tax (VAT) collected by the Member States is transferred to the Union, helping to cover costs.

The GNI-based own resource was created by Council Decision 88/376 /EEC, the essence of which is to levy a uniform percentage of the Member States’ gross national income determined during the budgetary procedure for a given year.[7] Originally, it would have been collected only if the other own resources had not fully covered the expenditure, but today, however, it is mainly used to finance the EU budget. In accordance with EU regulations, the same rate is levied on the gross national income of all Member States.[8]

The other group of revenue is created by other revenues and balances carried over from the previous year, including tax paid by EU staff on their salaries, contributions made by non-EU countries to certain EU programs, and fines imposed on companies for breaching competition or other rules. The correction mechanisms adjust the budgetary deviations between Member States' contributions.[9]

The plastic packaging waste-based own resource 

The contribution based on non-recycled plastic packaging waste was introduced on 1 January in 2021 as a new source of revenue. A uniform call rate of 0.80 euro/kilogram will be applied to the weight of plastic packaging waste that is not recycled, with a mechanism to avoid excessive contributions from less wealthy Member States. The contribution is calculated on the basis of Eurostat data provided by the Member States under their reporting obligations.[10]

Directive 94/62/EC on packaging and packaging waste covers all packaging placed on the European market and packaging waste, whether generated at industrial, commercial, official, business, service, household, or any other level, regardless of their material. This Directive aims to harmonize national measures concerning the management of packaging and packaging waste in order, on the one hand, to prevent any impact thereof on the environment of all Member States as well as of third countries or to reduce such impact, thus providing a high level of environmental protection, and, on the other hand, to ensure the functioning of the internal market and to avoid obstacles to trade and distortion and restriction of competition within the Community. The Member States should take measures, such as national programs, initiatives, extensive producer responsibility schemes, and other economic instruments, to recycle at least 65% of packaging waste by 2035 and at least 70% by 2030. Recycling targets vary depending on packaging materials.[11] Under the implementing decision of the Directive, member states are obliged to provide data on the generation and recycling of plastic packaging waste, which are publicly available.[12] The European Commission calculates the contributions primarily on the basis of projections to be adopted by it and by the Member States, as the exact data are reported to Eurostat in the second year following the reference year. As soon as the final data are available, the European Commission will adjust the calculation of Member States' contributions accordingly after July 2023.


In summary, the new source of revenue is likely to have a positive impact on the European Union's economy and the environment. The potential annual energy savings that could be achieved by recycling all global plastic waste would be equivalent to 3.5 billion barrels of oil per year.[13] In today’s world, where 31% of plastic waste ends up in landfills and 39% is incinerated, it means a loss of valuable resources and is not acceptable. A plastic-based source of revenue will help achieve the greener future that everyone needs.


For a list of references, click HERE.

Author: Szófia Németh-Kiss, law student, University of Debrecen, Faculty of Law

[1] European Commission: A new approach to the use of plastics (2018)   (2022. 04. 23.)

[2] Directive of the European Parliament and of the Council on the reduction of the environmental impact of certain plastic products   (2022. 04. 23.)

[3] Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions - A European strategy for the role of plastics in the circular economy  (2022.04.23.)

[4] Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions - Achieving the material cycle - An EU action plan for the circular economy, Brussels, 2015.12.2. COM(2015) 614 final

[5] Commission work program for 2018 - COM(2017) 650.

[6] Communication from the Commission to the European Parliament, the Council and the Court of Auditors - Consolidated annual accounts of the European Union – 2019 2020.6.26. COM(2020) 288 final

[7] COUNCIL DECISION of 24 June 1988 on the system of the Communities' own resources (88/376 /EEC, Euratom)

[8] Communication from the Commission to the European Parliament, the Council and the Court of Auditors - Consolidated annual accounts of the European Union - Consolidated annual accounts of the European Union - 2016 Brussels, 26.6.2017 COM (2017) 365 final

[9] Revenue of the Union - Presentation of the European Union – 2021 (2022.04.23.)

[11] Directive 94/62 / EC on packaging and packaging waste   (2022. 04. 23.)

[12] IMPLEMENTING DECISION (EU) 2019/665 amending Decision 2005/270 / EC establishing the formats relating to the database system pursuant to Directive 94/62 / EC of the European Parliament and of the Council on packaging and packaging waste   (2022.04.23.)

[13] European Commission - Fact Sheet (2018) Questions & Answers: A European strategy for plastics  (2022.04.23)

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