The EPR fees have been announced. How will this affect the environmental product charge?
In our previous newsletters we have already reported on the introduction of the extended producer responsibility (“EPR”) system from 1 July, the details of which were announced on 14 March 2023, in Government Decree 80/2023. The rates of the EPR fee, however, were not known until now, when finally a ministerial decree setting out the applicable rates was also published on 2 June.
Ministerial Decree 8/2023 (VI. 2.) EM sets out the amount of the extended producer responsibility fee payable per kilogram of the product.
For products not subject to the environmental product charge (e.g. textiles, wooden furniture), it had already been clear that the introduction of the EPR fee would cause an increase in the producer’s financial burdens. However, since the EPR fee can be deducted from the environmental product charge payable for products also subject to the latter, it was not known to the economic operators concerned what proportion of the product charge payment would be shifted towards EPR fees and how the overall financial burden would compare with the previous situation.
However, the EPR fees now announced are much higher than expected. The financial burden on all manufacturers concerned will increase significantly from July, which is likely to be also reflected in consumer prices. In addition, the administrative burdens of producers (e.g. record keeping, declaration and reporting) will also double for products subject to the environmental product charge, while the product charge itself will be reduced to 0 (if the amount of the EPR fee exceeds the amount of the product charge, the latter will be 0 HUF).
In the long term, the new legislation may also call into question the reason for keeping the environmental product charge in existence, as in practice it will only generate future revenues to the public purse for products not covered by the EPR (such as other petroleum products and other chemical products).
To translate the above into numbers through an example: while currently an economic operator placing its products on the market in plastic packaging in Hungary pays an environmental product charge of 57 HUF/kg per packaging, from July it will be liable to pay an EPR fee of 219 HUF/kg for the same packaging, while the product charge liability will be reduced to 0. For products that have not been subject to the environmental product charge so far, the rates will be as follows: textiles 145 HUF/kg, cooking oil and fat 36 HUF/kg, wooden furniture 17 HUF/kg.
The only product group where the EPR fee will not be more than the product charge is the wooden packaging. For example, the EPR fee for wooden pallets will be the same as the previous product charge (19 HUF/kg).
We hope that our newsletter will help you to better understand the new rules. If you have questions in connection with the above, our advisers will be pleased to assist you.
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