Deputy Robert Troy: Information on Robert Troy Zoom on Robert Troy I welcome the opportunity to raise this extremely important issue. The tyre industry accepts that it must comply with duty of care obligations and protect the environment. All tyres collected, recycled or repossessed should be disposed of or reused in an environmentally friendly manner using acceptable methods, whether recycled or used as fuel in cement kilns. The proposal by the Department will have serious consequences for the tyre industry, including potential job losses. Contrary to the Department’s ambition for the new scheme, it could be destructive to the environment because it will drive suppliers to stockpile used tyres before illegally dumping them.
Under the proposal, the cost of disposing of tyres will increase by in excess of 200%. Under the current self-compliant system, tyre wholesalers and retailers are required to dispose of waste tyres via licensed collectors. The average cost of disposing of a tyre is €1, which is not passed on to customers. Under the new scheme, a full producer responsible initiative will apply and Repak and WEEE Ireland will be appointed as the monopoly collectors and recyclers for the entire industry and an across-the-board green tax will be imposed on tyres to cover the costs of recycling.
The Minister circulated a letter to the industry in which he referred to the “formalisation” of the existing charge. This is factually incorrect because the current charge of €1 is dictated by market forces and competition for the collection and disposal of used tyres. Under the new scheme, the charge will increase to €3 for a car tyre, €15 for a truck tyre and €20 for a tyre used in agricultural vehicles. The trebling of the cost of disposing of tyre waste amounts to another stealth tax on hard-pressed families. Moreover, the charges are only fixed for a period of two years, after which the European average will dictate the charge.
Given the nature of the haulage industry, businesses which dispatch vehicles across the Border or to the United Kingdom and other European countries will have tyres replaced in other jurisdictions where the charge does not apply. The tyre industry informs me that, under the new scheme, it will cost an additional €200 to change a set of truck tyres. It will be just as convenient for haulage companies to purchase tyres in Britain or on the Continent as it will be to replace them here. This will have a detrimental impact on tyre retailers who employ in excess of 200 people in my home town. This is a good industry providing good employment and it will be detrimentally affected by the new measures.
The new scheme will also have a detrimental impact on the environment as the substantial increase in the cost of tyre disposal will result in service providers stockpiling tyres. They will then be transferred to people who will not dispose of them in an environmentally friendly manner. The Minister of State, Deputy Kevin Humphreys, alluded to one such example, the burning of tyres at Hallowe’en, in an earlier conversation with me.
The tyre industry acknowledges that the current system is not fit for purpose and needs to be strengthened. If the Minister had been present – I acknowledge that I received a call from his office to apologise in advance for his absence – I would have asked him to engage with the industry to ensure any new scheme was fit for purpose, would not have a detrimental effect on the industry and would not cost consumers more or place jobs at risk.
Minister of State at the Department of Social Protection (Deputy Kevin Humphreys): Information on Kevin Humphreys Zoom on Kevin Humphreys The Minister for the Environment, Community and Local Government, Deputy Alan Kelly, is overseas and the Minister of State at the Department, Deputy Paudie Coffey, was unable to come to the House owing to a family bereavement. I apologise on behalf of both Ministers for their absence.
I am pleased to provide an update on the establishment of a producer responsibility initiative, PRI, for waste tyres. As part of the review of the producer responsibility initiative, the Department of the Environment, Community and Local Government commissioned a major review of the waste tyre sector. Published in November 2013, this report concluded that the current system is not functioning as intended, with a lack of basic information, poor structure and poor environmental outcomes in the form of large stockpiles of waste tyres, and a substantial proportion of waste tyres unaccounted for. In addition, the taxpayer often pays twice for the treatment of waste tyres, first, through the application of an existing fee at the point of purchase and, second, to support local authority clean-up operations when waste tyres are dumped. The report also identified significant non-compliance among those with responsibilities under the current waste tyre regulations.
To address these significant shortcomings, the Department has been working, in full consultation with all parts of the tyre industry, to assist it in putting in place a system of producer responsibility, in line with similar systems that apply to other sectors, to provide for the collection, sorting and management of the waste they produce in an environmentally sound and effective manner. This is in line with the polluter pays principle, a firmly established feature of both European and domestic waste policy and legislation. The implementation of the new scheme will require an overhaul of existing structures, which the Government believes can be achieved without either distorting the tyre market in lreland, encouraging customers to buy tyres outside the jurisdiction or causing widespread job losses in the sector. Moreover, such a scheme can be established without introducing new costs and instead by effectively formalising the existing charge that is already applied to almost all tyre purchases.
Arising from the work of the tyres working group, the Department received proposals for the future management of waste tyres from the Independent Tyre Wholesalers & Retailers Association, ITWRA, and the Irish Tyre Industry Association, ITIA. Having considered these proposals in detail, the Minister recently informed all sections of the tyre industry of his decision to establish a full producer responsibility initiative scheme for waste tyres.
The initiative will comprise a number of features.
[Deputy Kevin Humphreys: Information on Kevin Humphreys Zoom on Kevin Humphreys] There will be single compliance scheme for end-of-life tyres to be operated by Repak, the option to “self-comply” under the regulations will be ended and the existing recycling charge will be formalised into a visible environmental management charge to protect the consumer and to put an end to the taxpayer being obliged to pay on the double. The level of this charge will be set by the Department and reviewed in two years. As part of the detailed design of the scheme, the Department is considering, in consultation with the tyre and waste industry, whether the funding model is predicated upon a front-loaded or back-loaded model. In addition, there will be a full audit, registration and reporting component, a so-called “black box”, with a role for the WEEE Register Society. The new regime, including enforcement and compliance measures, is to be underpinned by a robust legislative base, including fixed penalty notices for certain breaches.
Deputy Robert Troy: Information on Robert Troy Zoom on Robert Troy I thank the Minister of State. While I accept this is not his direct responsibility, I ask him to bring back to the Minister the points I intend to raise. The Minister of State referred to the extensive consultation the Department is having with the industry. However, the representative body that represents more than 90% of the service providers, the Independent Tyre Wholesalers and Retailers Association, has pulled out of the negotiations. The association has pulled out of the consultation agreement because it believes it is mere window-dressing and the Department is not listening to any of the proposals it is making. The association itself acknowledges and recognises there are shortcomings within the existing system. However, the association does not believe that it is necessary to throw out the baby with the bath-water. It does not believe that one must give a monopoly to one particular group, namely, Repak and WEEE, to look after the disposal of tyres. Ultimately, all Members are aware that where there is a monopoly and where prices are guaranteed, what happens is that the price rises continually. Moreover, it will have a devastating impact on and consequences for employment within the sector.
As I already have stated, there may be compliance problems with the system that is in place at present but they arise more from the lack of enforcement of the current legislation than from a problem with the system itself. The monitoring of tyres can be improved without giving a market monopoly to Repak. The Minister should give consideration to strengthening the current system to allow competition among licensed contractors and to imposing stronger sanctions for non-compliance. In the case of people who do not comply with the existing system, sanctions should be introduced because at present, there are none and there is no incentive for people to comply. The introduction of sanctions would ensure that people who were non-compliant would be obliged to shape up fairly quickly or else they no longer would be in business. Moreover, mandatory registration should be introduced to ensure compliance by having all collectors monitored. This system is in place in the United Kingdom and Germany. Germany possibly has the largest tyre industry in Europe and if it is good enough there, it can be good enough here in Ireland.
Other Members of the House have requested the Minister, Deputy Kelly, to reopen engagement with the largest representative of the tyre industry and I ask the Minister of State to revert to the Minister, Deputy Kelly, and ask him to consider this again. Members do not wish to see the imposition of a further stealth tax on already hard-pressed consumers. They do not wish to have people forced into the shadow economy or the black market, in which tyres will be stockpiled and disposed of irregularly. They certainly do not seek to have an industry that currently is providing good employment lose those jobs within a number of years because people no longer get their tyres in Ireland but instead get them in Northern Ireland or across the sea in the United Kingdom, where cheaper tyres can be acquired.
Deputy Kevin Humphreys: Information on Kevin Humphreys Zoom on Kevin Humphreys I will bring back the points made by the Deputy to the Minister, Deputy Kelly. I should point out that the tyre working group met on 2 March last to begin the process of the implementation of the tyre producer responsibility initiative. All parts of the tyre industry, including retailers, wholesalers, manufacturers and importers, are represented at the group, which also includes representatives of the National Transfrontier Shipment Office, the Environmental Protection Agency, local authorities and the Department of Environment in Northern Ireland, where similar arrangements ultimately may be introduced. While the Independent Tyre Wholesalers and Retailers Association chose not to attend recent meetings, it is hoped it will attend future meetings of the group, as well as various subgroups, and make its contribution to the important detailed design stage now reached. The tyre working group is conscious of the need to keep the wider sector informed of its work and of the charges that are planned to address some misleading and inaccurate information circulating within the sector that is exaggerating significantly the impact of the proposed change. It is the intention of the group to issue a regular newsletter to the sector giving updates on the current position. The first such newsletter was published on 11 March and was circulated to approximately 2,500 subscribers through its e-newsletter. There will be ongoing consultation with the sector and once the new tyre tariff regulations are available, there also will be further consultation with the sector.
Twenty of the 28 member states manage tyres through a system based on the principle of producers’ responsibility. The Government intends to build on the learning experience of those schemes. The tyre industry in Europe has been highly successful in dealing with the problem of waste tyres and currently is achieving a recovery rate of 95%. This should be Ireland’s aim to be part of the overall transition to a more resource-efficient circular economy. I thank Deputy Troy for raising the matter.
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