The Hong Kong plastic shopping bag environmental levy scheme is an environmental levy scheme designed to reduce the manufacture and distribution of plastic shopping bags (PSBs) in Hong Kong. PSBs are made of materials that are not easily degradable, and as such, their extensive disposal is putting pressure on the very limited landfill capacity of Hong Kong, leading to waste problems.
On 7 July 2009, the Government of Hong Kong initiated the first Mandatory Producer Responsibility Scheme (MPRS) under the Producer Product Eco-Responsibility Ordinance. Registered retailers are bound to charge consumers 50 cents as an environmental levy for each plastic bag taken. The levy scheme aims to generate direct economic disincentives and encourage consumers to refrain from using PSBs indiscriminately. The ultimate goal is to cultivate a habit of "Bring your Own Bag" (BYOB) within society.
The full implementation of PSB charging came into effect on 1 April 2015. All retailers are required to collect not less than 0.50 for each plastic bag distributed. To streamline the compliance mechanism and enhance the deterrent effect, a fixed-penalty notice of 2,000 was imposed on retailers who fail to comply with the legislation.
History
First phase implementation In 2005, it was estimated that in the territory over 8 billion PSBs were disposed of annually at landfills, which suggested an average disposal of over three PSBs per person each day, accounting for 11 per cent of the municipal solid waste disposed in the territory.Environmental Protection Department (2005). A Policy Framework for the Management of Municipal Solid Waste Consequently, the Council for Sustainable Development proposed that the government should introduce a legislation for MPRS.Council for Sustainable Development (2005). Making Choice for Our Future. Report on the Engagement Process for a First Sustainable Development Strategy MPRS emphasises the sharing of "eco-responsibility", and aims to provide economic incentives for citizens to change their wasteful habits. Since PSBs are made of non-degradable material and will permanently occupy landfills' capacity, promoting BYOB is seen to be the most effective solution to alleviate the environmental problem.
A comprehensive working schedule was subsequently formed. In 2006, the Product Eco-Responsibility Bill was introduced to the Legislative Council, providing a legal framework for MPRS. With the Bill in place, the Environmental Protection Department (EPD) further put forward the legislation on PSB Charging in 2007.
The registered retailers covered by the first phase implementation were predominately chain operators, including convenience stores, supermarkets, cosmetics and medicare (the retail category).Environmental Protection Department (2011). Consultation Document on the Extension of the Environmental Levy Scheme on Plastic Shopping Bags
Full implementation First phase of the levy scheme has achieved preliminary success, yet the overall result was incomprehensive. Firstly, the scheme only covered 3,000 registered retail outlets, and the PSB disposal originated from other non-registered retailers had increased by 6.7% since the first phase implementation. Secondly, EPD estimated that Hong Kong people's daily usage of PSB was still substantially higher than other overseas developed economies.
From the figure gathered in 2010, Hong Kong has around 60,000 retail outlets, in which over 98% are operated by small and medium enterprises (SMEs). In order to achieve a more profound outcome, EPD extended the scope of the levy scheme to cover all retail sales of goods regardless of their business scale and business nature.
The levy scheme
Scope The levy scheme has expanded to cover more than 100,000 retail outlets, including both retail and service businesses.Environmental Protection Department. (2015). Full Implementation of the Plastic Shopping Bag Charging. The Scope. Retail outlets are broadly categorised into four business groups: (i) retailers selling foodstuff; (ii) retailers selling non-foodstuff; (iii) retailers selling foodstuff and non-foodstuff such as department stores; and (iv) service businesses with sales of goods.
The PSB charge The PSB charge makes it so sellers of goods by retail charge customers no less than 50 cents for each PSB, or for product with prepackaged pack of 10 or more PSBs. This is irrespective of whether the PSBs are distributed directly or indirectly for the promotion of goods, or in connection with the sales.Environmental Protection Department. (2015). Full Implementation of the Plastic Shopping Bag Charging. The Charge. The seller must not offer any rebate or discount to the customer with the effect of directly offsetting the PSB charge or any part of that amount.Environmental Protection Department. (2015). Full Implementation of the Plastic Shopping Bag Charging. Obligations of the Seller.
The 50 cents charge was generally considered to be a moderate levy which could provide incentives for consumeres to reduce the use of PSBs, but not exceeding the level of public acceptance.
Bags subject to the charge In order to promote the green habit of BYOB, extensive forms of PSBs are covered under the second phase of the levy scheme, including all bags that are made wholly or partly of plastic regardless of whether there is a carrying device.Environmental Protection Department. (2015). Full Implementation of the Plastic Shopping Bag Charging. Bags Subject to Charge. The types of shopping bags listed below are subject to the Charge:
Plastic bags with flat-tops, handle, handle hole, perforated line for tearing out handle hole, carrying string or strap, and any other devices attached to the bag.
Paper bags with plastic lamination, plastic components, plastic handles and plastic accessories.
Non-woven bags, also known as environmental bags, which are made of plastic.
Exemption arrangements Types of PSBs are exempted from PSB charging.
Bag used for food hygiene reasons: Due to food hygiene concerns, PSBs that carry only foodstuff (i.e. food, drink or medicine) without packaging or not in airtight packaging will not be charged.Environmental Protection Department. (2015). Full Implementation of the Plastic Shopping Bag Charging. Exemption Arrangements. In order to separate the condensation of water vapour from other goods, PSBs which carry frozen or chilled foodstuff are also exempted. Bags used for packaging: This includes sealed bag for prepackaging. The exemption covers PSBs that are used for prepackaging and have been sealed before they are delivered to retailers. However, additional plastic bags for the prepackaged production will be charged. In the case of plastic bags that form part of the goods, the charge does not apply if the PSBs are (i) designed specifically for containing the goods; (ii) holding perishable goods; (iii) containing goods in liquid form or goods that are in liquid; and (iv) printed with information on how to consume or use the goods. Bags provided with the services: PSBs that are distributed by retailers as part of the service tendered, and without involving the retail sales of goods are not subject to charge.
Penalty If a retailer is found to have committed an offence by failing to comply with the levy scheme, the EPD officers may issue a fixed penalty notice requiring the offender to pay a fixed amount of $2,000.
For breaches of serious nature, the EPD may initiate prosecution against the offender, who is liable on conviction to a maximum fine of $100,000 on the first occasion, and $200,000 on each subsequent occasion.Environmental Protection Department. (2015). Full Implementation of the Plastic Shopping Bag Charging. Penalty.
Consultation
Prior to the first phase implementation Plastic bags manufacturers: The Hong Kong Plastic Bags Manufacturers' Association opposed to the proposed environmental levy, alleging that PSBs were more environmentally friendly than other single-use carriers such as paper bags. Besides, the levy scheme was unnecessary since PSBs were habitually reused by the public.Environmental Protection Department. (2007). Public Consultation Report on the Proposal on An Environmental Levy on Plastic Shopping Bags.
Retailers: The Hong Kong Retail Management Association raised objections to the levy scheme, contending that chain stores were being unfairly targeted under the proposal. In fact, these retailers had done the most to encourage citizens to reduce the use of PSB. The effectiveness of the proposal was also questionable due to its limited coverage, and consumers could easily resort to other free sources of PSBs.
Legislative Council: In the meetings held by the Legco Panel on Environmental Affairs, the vast majority of political parties and deputations backed the principle of "polluter pays". However, some Legco members argued that the Charge should be lowered to 10 to 20 cents in order to reduce its impact on the impoverished. Besides, the government should reinforce the voluntary efforts on PSB reduction before introducing the levy. There were also concerns as to whether the levy constituted another form of Goods and Services Tax, causing adverse effects on the trade sector.
General public: With reference to the public opinion survey conducted in 2007 by the Center of Communication Research of the Chinese University of Hong Kong, among the 1,102 telephone interviews conducted, only 66% of the respondents supported the introduction of an environmental tax on PSBs.
Before the first phase implementation, the Public Opinion Programme of the University of Hong Kong conducted another three-stage survey to gauge public opinion. The feedbacks were largely positive. Around 80% of all the respondents considered that the tax was effective in reducing the use of PSBs, and the majority of them opined that a 50 cent charge would not add to their financial burden.Public Opinion Programme, The University of Hong Kong. (2010). Opinion Survey on Plastic Bag Tax. In the third stage survey, two-thirds of the respondents even urged for an extension of PSB tax to all retail shops.
Prior to the full implementation Plastic bags manufacturers: In 2011, the Hong Kong Plastic Bags Manufacturers' Association demanded the government to withdraw the levy scheme, as the association alleged that non-woven bags and rubbish bags were treated as alternatives of PSBs, causing an overall increase of plastic materials used in producing plastic carriers. As an alternative, the association lobbied the government to support the development of eco-friendly biodegradable PSBs.Hong Kong Plastic Bags Manufacturers' Association. (2011, July 15). Plastic bags levy scheme has been implemented for 2 years, the number of non-woven bags and the use of plastic materials increase by 96% and 27% respectively [Press release] (膠袋徵費實施兩年後 不織布袋數量急升 96%，膠料數量升達 27%).
Retailers: In contrast with the first phase implementation, the Hong Kong Retail Management Association welcomed the expansion of the levy scheme.Hong Kong Retail Management Association. (2013, June 1). Positions on the Extension of the Environmental Levy Scheme on Plastic Shopping Bags of the Hong Kong Retail Management Association. (就擴大塑膠購物袋環保徵費計劃 擴大塑膠購物袋環保徵費計劃的意見) In particular, the association supported the second phase amendment as it allowed the retailers to retain the PSB Charge without remitting them to the government. This would prevent SMEs from incurring extra administrative costs.
General public: On 17 May 2011, the EPD released the consultation document "Extension of the Environmental Levy Scheme on Plastic Shopping Bags". The consultation focused on five main aspects: (i) the expansion of the Scheme; (ii) the coverage of retailers; (iii) the exemption for food hygiene purpose; (iv) the regulation of flat-top bags; and (v) handling of the collected charges.