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Sustainability

Groups propose 0.5% global fee on basic chemicals

Funds would help developing countries manage chemicals and waste

by Cheryl Hogue
September 14, 2020

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Credit: Shutterstock
Environmental and health groups are seeking a global levy on the production of chemicals to fund the building and strengthening of chemical and waste management systems in developing countries.

Environmental and health groups are calling for a worldwide 0.5% fee on basic chemicals to help developing countries improve their management of chemicals and waste.

The global chemical industry, not surprisingly, is against the proposal. It was developed by the nonprofit Center for International Environmental Law (CIEL) and the International Pollutants Elimination Network (IPEN), a global coalition of health and environmental organizations.

“As the primary drivers and beneficiaries of the global chemical trade, chemical producers must take greater responsibility for the safe management of their products,” says a report from CIEL and IPEN that lays out their rationale for a levy.

The burdens of managing chemicals, releases, and accidents worldwide “fall disproportionately on the most vulnerable and marginalized populations,” the report says. These burdens “are felt most severely in low- and middle-income countries that have the fewest protections and least resources to manage threats from chemicals.”

The proposed tax on the production value of basic chemicals—such as ammonia, chlorine, 1,3-butadiene, and methanol—would garner some $11.5 billion annually, based on 2018 figures, CIEL and IPEN say. The money collected would go to developing countries to support the creation and strengthening of systems to monitor chemicals and to manage and clean up waste.

Currently, governments and industry contribute less than $150 million per year to help developing countries. That money is collected under a 2006 United Nations agreement called the Strategic Approach to International Chemicals Management (SAICM). The pact, which focuses on manufacturing and use of chemicals in ways that minimizes harm to people and the environment, expires this year. Governments, industry, and environmentalists were planning to expand and extend SAICM at a meeting in October that was postponed to July 2021 because of the COVID-19 pandemic.

CIEL and IPEN are aiming their proposal at those pushing to continue SAICM.

The International Council of Chemical Associations (ICCA), which represents the global chemical industry, has supported SAICM since its inception and backs its extension. ICCA calls dedicated financing for the sound management of chemicals “critical.” But the industry group opposes a universal tax on chemical sales.

“The sound management of chemicals and waste requires effective laws and regulations and consistent implementation and enforcement,” ICCA says in a statement supplied to C&EN. The industry organization says “supports the establishment of fee-based chemical management systems” run by individual national governments.

Under the CIEL and IPEN proposal, each country would impose the levy through its existing tax system. Fees would be based on the volume of chemicals manufactured—rather than sold—to account for transfers without recorded sales within vertically integrated companies. Governments would then contribute the revenue to a global reserve that would distribute the funds, according to the proposal.

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