Joining Schragger to discuss whether the controversial chemical tax could be a force for driving change: Jérôme Pero, Secretary General for the Federation of the European Sporting Goods Industry; Magnus Nikkarinen, Senior Policy Director in Sustainability at the Swedish Trade Federation; Mikael Larsson, researcher at the RISE Research Institute in Sweden; Eliina Brinkberg, Environmental Manager from Nudie Jeans Co.; and Anna-Karin Dahlberg, Head of Sustainability at Lindex.
It comes ahead of proposed new legislation in Sweden, set to come into force from 2022, that will tax clothing and footwear manufacturers which use any of the pre-defined 151 harmful substances outlined in the report: Tax on fashion – to remove harmful chemicals.
Plans being considered by politicians include a default tax of 40 SEK (US$4) per kilogram of the product’s weight, with tax reductions of up to 95 per cent for those that do not contain any harmful chemicals.
Sweden introduced a tax on chemicals in electronic products in 2017, despite opposition from business, and the government now wants to extend the system to cover clothes and shoes.
It focuses on chemicals judged as being substances of very high concern (SVHCs) under the European Union’s REACH (Registration, Evaluation, Authorisation and Restriction of Chemicals) system, and other chemicals deemed to fulfil the same criteria.
Special attention is given to weather-resistant products likely to contain PFAS (per- and polyfluoroalkyl substances) which would attract an additional 19 SEK (US$1.90) per kilogram in tax.
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From the off then, Larsson, of the RISE Research Institute, looks to provide some context as to where this concept first originated but even he comes unstuck when asked how such a framework would work in practice.
He tells Schragger: “It’s not clear what you have to show to get the [tax] reduction. You have to provide “sufficient evidence” but what is sufficient evidence? Does this mean you have to test all the materials that you have in your products for all of those chemicals? Or do you have to have a document from your supplier showing that these chemicals are not present? Is there any other kind of evidence that you can use in order to get these deductions?”
All valid questions. In terms of the implications for companies which would have to comply with such a framework, Jérôme Pero, Secretary General for the Federation of the European Sporting Goods Industry (FESI), argues that the existing REACH regulations work just fine, even if they do have their flaws.
He said: “I think REACH has proven that it’s a complicated beast, it’s a very big ship to steer, but it’s there and it’s efficient and it’s promoting substitution and our members are generally supporting anything that goes through REACH because it has a diligent process in place.
Pero continues: “What the tax is actually trying to target is a low percentage of products in its scope. I think 84 per cent of these products do not have any trace of those substances and if so it’s only residue that can be eventually washed out, an accidental residue. In the end, what it’s trying to achieve is really putting a huge administrative burden that will require a lot of time-consuming resources and financial-consuming resources in the end to tackle an initiative that from a risk standpoint and a size standpoint might be very, very limited.”
If it is to come into force though, the FESI Secretary General says that what’s left for companies to use mustn’t come at the cost of product performance. “Our members generally support phasing out any harmful substances as long as they have guarantees that they have left behind durable, qualitative and safe products for the end consumers.”
He alludes to one possible scenario, however, which might actually see some stakeholders take the hit of paying the chemical tax because in the long-term it could prove more cost-effective than investing in viable alternative solutions.
You can listen to the podcast HERE.
