Tim Young
Last month we saw that contaminated land is an issue where the European Union requires relatively little from a candidate country like Slovakia. In the area of waste management, by contrast, there is a whole raft of legislation that Slovakia will have to implement on the path to EU membership.
New legislation on waste that has been many years in the pipeline is undergoing passage into law this year. This will help to bring Slovakia into line with EU standards, although further legislation will be needed to finish the job. The new law, while helping tackle some of the country's most pressing problems, has not been without controversy.
It has been widely welcomed that the new law will give individual citizens responsibility for disposing of their own waste, rather than municipalities as at present. Municipalities are also set to levy a new mandatory, flat-rate charge on all citizens for waste collection, treatment and disposal - although the execution of these three will still remain the duty of the municipality. This change should help end the current situation, in which individuals are not obliged to pay for waste collection, preferring instead to dump or burn their waste illegally.
Another positive feature of the law will be the introduction of a compulsory financial reserve for all landfills, the aim of which is to ensure that the costs of closure and post-closure management of landfill sites are met even if the company operating the site ceases to exist - a problem in the past. However, it is not intended as a mechanism to fund the costly clean-up of many former landfill sites that now represent a major risk to the environment.
More controversial, however, are plans to establish a recycling fund. On the one hand, industry bodies (notably the Slovak Industry Coalition on Packaging and the Environment) have attacked the idea of the fund as introducing more central-planning style regulation under the guise of a free-market economic tool, whilst environmental groups such as Friends of the Earth have criticised it for dealing only with a small range of products (mostly, but not exclusively, those that are subject to special requirements under EU legislation, such as waste batteries, oils and tyres, as well as so-called 'end-of-life' vehicles).
Although the fund's creation would be in line with standard EU practice in terms of raising additional charges on particular products or packaging, it is questionable whether the fund would be compatible with the principle of 'producer responsibility' - while it is proposed that industry representatives would be on its supervisory board, the producers (or importers) of a given product will not be responsible for using the proceeds of the fund directly to meet the necessary environmental objectives in the most cost-effective way.
The expenditure on the recycling fund is, however, just the tip of the economic iceberg in terms of the costs of meeting EU legislation. Requirements for the necessary technical standards for landfilling and incineration, to divert biodegradable waste away from landfill to recycle packaging (as well as requirements to collect other used products) have an estimated price tag of 1.9 billion euros, more than 140 million euros per year, between 2005 and 2015.
Much of this will have to be paid by citizens, either as consumers subject to charges (for the recycling fund) or through increases in the cost of disposal, treatment and recycling, and paid for largely through the flat-rate charges to be levied by municipalities. Industry will also face higher waste disposal costs, but the extent to which these can be passed on to customers will vary between industry sectors.
What does all of this mean for companies operating in Slovakia? It means a time of stricter controls on waste management and rising waste management costs. It also means significant market opportunities for suppliers of waste processing and disposal technologies. And, last but not least, it will mean that standards of environmental protection will approach those of the EU, levelling the playing field and contributing to a future where the environment is not traded in for quick profit.
Next month: Prevention of major industrial accidents - what does EU legislation require, and what will this mean for companies operating in Slovakia?
Tim Young heads AEA Technology's Bratislava office. He can be reached at tim.young@aeat.com.
