Extended Producer Responsibility Smokes and Mirrors as Government Proposes Eco Levy

You are currently viewing Extended Producer Responsibility Smokes and Mirrors as Government Proposes Eco Levy

The government of Kenya is proposing a new environmental tax as part of the 2024 Finance Bill. This tax, called the Eco Levy, targets products that are deemed to have a negative impact on the environment. The targeted goods include various technological and telecommunication products, diapers, rubber tires, plastic packaging materials, among others.

The specifics of the Eco Levy are detailed in Section 7B of the Finance Bill, with the Fourth Schedule listing the levies for each product. For instance, television camera tubes will be taxed at 1,800 Kenya Shillings per piece, rubber tires at 1,000 Kenya Shillings each, smartphones at 225 per piece, diapers at 150 Kenya Shillings per kilogram and plastic materials at 150 Kenya Shillings per kilogram.

Many observers will view the Eco Levy as a censure on the Extended Producer Responsibility (EPR) regime, currently being implemented as per the Sustainable Waste Management Act of 2022. This regime mandates that every producer introducing products into the Kenyan market is financially responsible for the entire lifecycle of those products. Consequently, several Producer Responsibility Organizations (PROs) have been established in the last one year to collect EPR fees from their members, which are then used to fulfill producers’ obligations.

However, the fees collected by these PROs are insufficient to address the country’s severe material pollution problems. For example, the Kenya Producer Responsibility Organization (KEPRO) collects between 0.5 and 13 Kenya Shillings per kilogram of plastic from producers, depending on the type of material. On the lower end, this is less than 1 percent of what the proposed Eco Levy suggests. It is unclear how KEPRO determined these EPR fees and whether the government played any role in this process. However, one thing is clear: the producers have grossly undervalued their responsibilities if the proposed Eco Levy for plastic is anything to go by. Half a shilling per kilogram of plastics introduced into the Kenyan market does not sound like producer responsibility to me.

There is also another problem. A majority of the EPR fees collected by the PROs end up as subsidies to a limited number of Waste Management Operators or Recyclers, with only a small portion allocated to waste recovery efforts in communities or public awareness campaigns. Some of the fees have also been used to host corporate events in an exercise that looks like smokes and mirrors.

This approach means that the benefits of the EPR regime in Kenya are largely enjoyed by a few businesses, with community groups continuing to bear the burden of neighborhood cleanups without any compensation from those who are responsible for the pollution. This model, which subsidizes businesses, has previously been employed by PETCO Kenya (now rebranded as PAKPRO) and has proven ineffective in tackling packaging pollution in the country. The notion that the subsidies will trickle down to waste pickers who sell plastics and other materials to the recyclers is a fallacy considering how the recycling value chain works in the country.

The government’s proposal for a new environmental tax will now raise questions about the role of Extended Producer Responsibility (EPR) in the country with all its deficiencies and serves as a clear indictment of the work of Producer Responsibility Organizations (PROs). If the Finance Bill is adopted by parliament, the financial and implementation models of these entities will need to be thoroughly scrutinized, as their impact remains minimal, as the Eco Levy may yet provide a template for how we can tackle the problem of pollution in the country.

While critics will argue that the Eco Levy could place an additional financial strain on businesses already struggling with high operational costs and consumers, the levy may just prove necessary in addressing the growing environmental crisis in the light of a failing Extended Producer Responsibility experiment. The government will however need to provide a framework for how these levies will be utilized to address material pollution. The government also needs to address the question of the future of the Extended Producer Responsibility, given this development, by publishing the much awaited EPR regulations as required by the Sustainable Waste Management Act of 2022. As someone who has been a frank pessimist on the promise of the industry to help end pollution in Kenya, I welcome the government’s proposal for an Eco Levy! If EPR can’t be built to serve the people and the planet in Kenya, an environmental tax is the way forward, with a state agency created to manage the fund.

EPR fees KEPRO members are required to pay per kilo. Source: KEPRO Website

ABOUT THE AUTHOR

Betterman Simidi Musasia

Founder & Patron, Former CEO, Clean Up Kenya

Betterman is a sustainable public sanitation advocate and a pollution control evangelist. In 2015, after becoming extremely tired of seeing all the trash in Kenyan neighborhoods and hearing the authorities fake promises to clear the mess, he sold his trucking business to establish Clean Up Kenya. Today, the organization is a leading national sustainable public sanitation advocacy brand. In September 2020, he stepped down as Clean Up Kenya Chief Executive Officer and currently serves as Founder and Patron.