Context of the IRBP:
On September 19, 2023, The Constitutional Court approved the “Economic Emergency Law Decree” signed by the current president, which called for the extension of the Redeemable Tax on Non-Returnable Plastic Bottles (IRBP), which had been in force since 2011, and which includes The charge of 0.02 ctv when buying each PET bottle.
This Tax was created in 2012 with the purpose of “reduce environmental pollution and stimulate the recycling process” of PET plastic bottles, according to the Internal Revenue Service SRI. But in January 2022, the Constitutional Court He declared it unconstitutional the Environmental Development Act, which included the redeemable tax. Two years were given for the Ministry of Environment, Water and Ecological Transition (MAATE) to propose a new law.
This year, the MAATE sent a bill to the Presidency, and the Presidency to the Constitutional Court in favor of maintaining the Tax. At ReciveCI, we consider it important to communicate How has the tax impacted the recycling industry and basic recycling in the country.
The Benefit for Basic Recyclers:
The IRBP has been in force for 10 years and from the moment it was created, it helped to develop and energize a PET transformation industry that did not exist before. For the same reason, this plastic used to be wasted. However, since the birth of the Redeemable Tax, the recycling of PET plastic bottles in Ecuador went from an average recycling rate of 20% in 2011 to 80% today.
This context has helped Grassroots Recyclers to have higher incomes. Although the IRBP was not aimed at strengthening the work of the thousands of Grassroots Recyclers, this Redeemable Tax has had a positive and direct impact in their profession at the economic level. PET plastic represents approximately the 30% of the income of Basic Recyclers, and it is the material that can best be marketed, precisely because the price is defined by law. The National Network of Recyclers of Ecuador (RENAREC) states that this tax has allowed a minimum economic value to be maintained for PET plastic, even when its price in the international market has been low.
Likewise, he assures that since the IRBP came into force, logistics has been streamlined in waste recovery at the national level, where not only PET is recovered, but other materials that were not recovered before, such as glass, Tetra Pak® containers, high and low density plastics, etc. There is still no recycling law for packaging and containers in the country and in that sense, we hope that the authorities will work to include other materials in policies that promote recycling.
The Challenges of Implementing the IRBP:
Like any law, there are always aspects to improve. From ReciVeci and players in the recycling sector, we see it important to strengthen the IRBP with regulations that promote:
- Investment in equipment and infrastructure to strengthen logistics chains.
- The formalization and social and economic inclusion of Grassroots Recyclers.
- Public education and training on waste reduction and recycling, among others.
- Appropriate monitoring and control for the redemption of the IRBP.
- Innovation and technology to ensure the traceability of material and the transparency of transactions.
Proposals and future perspectives:
It is essential that the State and the sectors that work with solid waste management can find solutions that improve the implementation of the IRBP. From our experience at ReciVeci, we consider that achieving traceability in all processes from when the material is recovered until it is returned to the production chains, and above all, a minimum formality in this recycling chain, is essential to be able to move towards a better implementation of the IRBP.
Having figures, not only for the material, but also for the impact it has on different sectors including Basic Recyclers, without falling into speculation, will help ensure that the spirit with which this Redeemable Tax was created, which is to promote recycling and the circular economy, is maintained.
Finally, although it is a technical and difficult topic to digest, too we invite citizens to get involved in this debate. Finally, each person as a consumer is always paying 0.02 ctvs for each PET plastic bottle they purchase, and that is why it should be a topic of interest to all of us to make sure where that money goes. Let us remember that this is not a tax that the SRI places in the State coffers, but rather It returns it to those who recover this material and they reinsert it into the production chain in the form of incentive to recycle.
Therefore, we invite you to take care to ensure that the recovery of the material is carried out, that the implementations of the tax are improved, and above all that Basic Recyclers continue to benefit from the stability (even if it is minimal), which brings the IRBP to its economic reality.
Sources:
- SRI
- News and Primicias
- News News Decree of Law
- RENAREC Report “IRBP analysis in the economy of basic waste pickers”.
- Zero Waste Alliance Report: “A look at the recycling market in Ecuador and the Redeemable Tax on Non-Returnable Plastic Bottles.”
