Background

Denmark’s interest in refashioning its waste management systems originated in the middle of the 1980s. At this time, Denmark had one of the highest amounts of waste generated per capita in Europe. Additionally, as a small country, Denmark, and particularly the city of Copenhagen, was expected to run out of landfill space. The concern about space, as well as increasing awareness about the harms from pollution given off from waste incineration led Denmark to redesign its waste management system (Andersen).

The Danish landfill tax is one of several policy instruments that were applied to deal with waste in a more environmentally-friendly way. The Danish landfill tax was introduced in 1987 along with the Danish incineration tax. The goal of both taxes was to incentivize recycling by reducing the amount of waste landfilled and incinerated. They were intended to change the flow of waste, not reduce waste overall. From 1987 to 1989, Danish landfill tax only applied to landfills that received waste sourced from municipal collection. After 1989 though, all landfills were taxed (Kjær). Additionally, at first hazardous waste was exempt from the landfill tax, but was incorporated in 2012 at a reduced rate (DME).

Tax rates over time

The tax rates for landfilling and incineration were initially placed at the same level (Bartelings). The tax rates started at 40 DKK per ton of waste. However, since 1993, the tax rate for landfilling has been higher than the incineration tax rate. The tax rate for landfilling was increased several times during the decade following the tax’s induction (Kjær). In 1997 there was a dramatic increase in the landfilling tax rate up to 335 DKK per ton of waste (Bartelings). The current tax rate as of 2015 is even higher, at 475 DKK per ton of waste (OCED).

Revenue

The revenue from the landfill tax goes into Denmark’s national budget. Initially much of this revenue was used to further development for recycling systems and technologies. The Danish Ministry of the Environment described the tax as such: “by imposing taxes and providing financial aid to technology and infrastructure, both a carrot and stick was used to divert waste from disposal to recycling.” Over time there has been a transition to using a larger portion of the revenue towards clean technologies, as opposed to waste and recycling projects. The revenue brought in from the landfill tax is significant. In 2009, the revenue was more than 97,000,000 DKK (DME).

Results of the landfill tax

Currently Denmark’s landfilling rate, which is 5-6%, is one of the lowest landfilling rates of all EU countries. Denmark was able to achieve such a low rate by taxing landfilling, as well as through other measures to incentivize recycling waste. One such was a ban on landfilling any material that could be recycled or incinerated (Dakofa). As the tax rate on landfilled waste increased, the amount of waste landfilled decreased (Figure 3). However, it is hard to determine exactly how effective the landfill tax has been, as it was implemented alongside several other policies aimed at increasing recycling (Figure 1). For instance, the tax was introduced soon after Denmark made it mandatory to recycle items such as cardboard, paper, and glass. Since this happened at around the same time, it is likely that both this mandate and the landfill tax were instrumental in reducing the amount of waste landfilled (Andersen).

Between 1985 and 2008, the amount of household waste landfilled decreased by 77%.

In more recent years, however, the amount of reduction has decreased. The reason for the decrease in reduction is that the landfilling rate had already been drastically reduced, so there was not much left to reduce. Between 2001 and 2010, the amount of waste landfilled dropped from 7.5% to 3.5% (Kjær). While recycling rates between 2001 and 2010 increased in Denmark, there is no correlation between the landfill tax and increased recycling during this time. This is because while the recycling increased, the taxation level remained constant (Figure 2.6) (Kjær).

Figure 1: The above figure, also released by the Danish Ministry of the Environment, shows how the distribution of waste in Denmark changed between 1985 and 2008. It is clear from the figure that total waste has increased dramatically over the time period. The amount of waste landfilled has decreased, while the amount of waste recycled and incinerated with energy recovery have increased. The amount of waste recycled has increased by a lot more than the amount incinerated.

Figure 2.6: This figure shows that while recycling increased between 2001 and 2011, the landfill tax rate (shown in blue) remained mostly constant. This supports the idea that the increase in recycling rates during this time was not a result of the landfill tax, for if it were, the recycling rates would likely have stayed constant. This implies that one of the other policies aimed at increasing recycling in Denmark effectively increased recycling between 2001 and 2011.

Figure 3: This figure, released by the Danish Ministry of the Environment, shows how the Danish tax rate increased and the percent of waste put in landfills decreased between 1985 and 2009.

Sources

Andersen, Mikael Skou. “Assessing the Effectiveness of Denmarks Waste Tax.” Environment: Science and Policy for Sustainable Development, vol. 40, no. 4, 1998, pp. 10–15., doi:10.1080/00139159809604580.

Bartelings, Heleen, et al. Effectiveness of Landfill Taxation. Reyer Gerlagh, 2005.

“From landfilling to recovery –Danish waste management from the 1970s until today.” Copenhagen Resource Institute. Danish Ministry of the Environment, https://eng.ecoinnovation.dk/media/mst/8051407/Affald_Baggrundsartikel_affald_web_15.01.13.pdf

Kjær, Birgitte. “Municipal Waste Management in Denmark.” Municipal Waste Management in Denmark, European Environmental Agency , 2013.

“Landfilling in Denmark.” Waste and Resource Network Denmark, Dakofa, http://dakofa.com/element/landfilling-in-denmark.

“Towards Green Growth: OECD Environmental Performance Reviews: Denmark 2019: OECD ILibrary.” OECD ILibrary, OECD ILibrary, www.oecd-ilibrary.org/sites/3093cb23-en/index.html?itemId=/content/component/3093cb23-en&mimeType=text/html#countryli_container2.