Hong Kong Consults On Waste Disposal Charges

by Mary Swire, Tax-News.com, Hong Kong

16 January 2012

On January 10, 2012, Hong Kong’s Environmental Protection Department announced the launching of a consultation on whether or not the government should introduce charging for the disposal of municipal solid waste (MSW), in an effort to reduce its generation.

The consultation document gives an overview of waste management in Hong Kong, and also outlines the international experience in waste charging and key considerations for the implementation of such a scheme in Hong Kong. The consultation will last for three months until April 10, 2012.

The document points out that the annual disposal of MSW to Hong Kong’s landfills stands at a “staggering” 5.04m tonnes, exerting tremendous pressure on the demand for landfill space and, at the same time, calling for huge investments in the introduction of modern technology for the proper treatment of the residue waste.

It is therefore considered that Hong Kong needs to continue to redouble its effort in waste reduction. In particular, as 60% of MSW produced by households goes to the landfills, and as much of the waste recovery that does take place is undertaken by garbage collectors, and not by individual households, triggering behavioural changes by individuals at household level could go a long way in reducing waste in the city.

Four possible charging schemes have been proposed: the first of which directly looks to reduce MSW - a quantity-based system, in which the waste charge is assessed on the basis of waste actually produced and which therefore establishes a direct link between the charge and the quantity of MSW requiring treatment or disposal; the second of which could mean a partial charging of commercial and industrial businesses that handle their own waste through engaging private waste collectors by the delivery of MSW to disposal facilities.

The two other proposed charging schemes are seen to be largely a means of cost recovery - a proxy system linking the waste charge to an indirect indicator of waste generation, such as water consumption; or a fixed charge system in which MSW producers within the same category (for example, residents of the same district) pay an identical rate regardless of how much waste they produce.

However, while the government proposes that, if implemented, MSW charging in Hong Kong should primarily seek to create economic incentives for waste reduction and recovery, and should not be taken as a means to raise revenues, there is no indication, within the document, of what level of charges would need to be introduced under the various schemes.

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