International Review of Waste Management Policy - Department of ...

46.0 Tax on Aggregates - International
46.1 Outline of Policy
Sand, gravel and rock are commonly known as aggregates and are essential
materials for the construction industry. A tax on aggregates is an example of a natural
resource based tax. It is a market-based instrument with both fiscal and
environmental motivations. Such taxes aim to raise revenue without distorting a
country’s economic activity.
The objectives for introducing a tax on aggregates vary depending upon the country in
which it is being implemented. The policy can have four main effects on aggregates:
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� Reduce the amount of virgin aggregate material extracted (reduced
consumption leads to less disposal);
� Increase the amount of aggregate re-use;
� Increase the use of substitutes for primary aggregate; and
� Increase the recycling of, and use of, secondary aggregates
A tax on aggregates is a fiscal measure which usually works by shifting the price
differential against virgin, and in favour of secondary aggregates, making it financially
more beneficial to recycle aggregate and use secondary aggregate. The recycled
aggregate is mainly derived as waste from the construction and demolition industry.
46.2 Where Has the Policy Been Applied and Why?
Denmark, Sweden, the UK, Belgium (Flanders) and Italy (at a regional level) have all
implemented a pure aggregate levy. 784 The main policy objectives and the year in
which the policy was introduced are outlined in Table 46-1.
In Denmark, the tax applies to raw materials that are commercially extracted and
consumed in Denmark, or commercially imported. These include sand, gravel, stones,
peat, clay and limestone.
In Sweden, gravel is a very important resource due to necessity for aquifers on which
much of the country relies for drinking water. It was also recognised that gravel is an
easily extractable finite resource. This was leading to a shortage of gravel in some
parts of Sweden. The tax was therefore introduced for environmental reasons and
aimed to make gravel-alternatives more cost-competitive, therefore increasing use of
recycled aggregates, and reducing consumption of gravel.
784 R. Bleischwitz and b. Bahn-Walkowiak (2007) Aggregates and Construction Markets in Europe:
Towards a Sectoral Action Plan on Sustainable Resource Management, Minerals and Energy, Raw
Materials Report, 22:3, 159-176.
International Review of Waste Policy: Annexes