7. Context

Spain ranks 26th out of 27 EU countries in terms of the weight of environmental taxes with respect to GDP. Green taxation accounts for 1.77% of Spain's gross domestic product (GDP), well below the European Union average of 2.37%, according to Eurostat data for 2019 (Eurostat, 2022[1]).

The lack of nationwide environmental taxes related to waste management in Spain has been one of the main causes of the poor performance of the country in this area (Castells-Rey, Pellicer-García and Puig-Ventosa, 2022[2]). For example, Spain in 2020 recycled only 40.5% of its Municipal Solid Waste (MSW) while the EU-27 average was 49.2% (Eurostat, 2022[3]), Figure A.A.1 shows the EU overview of MSW recycling rates. Thus, it has not accomplished the MSW recycling target of 2020 (50% of the MSW), and it will be a challenge to accomplish the recycling target of the upcoming years summarised in Table 7.A.1 in Annex 7.A. Traditionally, environmental taxes in Spain are mainly regional taxes that were promoted and implemented by some Spanish Autonomous Communities. Nevertheless, the situation has recently changed as two environmental taxes were included in the national Spanish law on waste and contaminated sites for a circular economy (Boletín Oficial del Estado, 2022[4]).

This chapter provides recommendations for policy reform at regional level to the Andalusian regional government (hereafter “Junta de Andalucía” or “Junta”) on how to use its tax competencies to promote a Circular Economy (CE) and improve waste management. Such tax instruments could be used to address the material circularity within the region, as well as to increase waste prevention and improve its waste source separation and recycling rates. In addition to environmental taxes, other economic instruments (such as Extended Producer Responsibility) are vital to operationalise the Polluter Pays Principle (PPP) (European Commission, 2021[5]). The latter aims at changing the polluting behaviour and ensures that polluters compensate society for the costs caused by their activities.

The scope of the work includes reviewing existing tax instruments in Andalusia related to the circular economy and waste management, assessing their alignment with the goal to improve environmental quality while raising revenue and accounting for distributional concerns, and discussing possible additional tax interventions, with a view to identifying strategic reform options. The work includes a stocktake assessment of economic instruments used in this area at the EU, national, and regional levels. It identifies opportunities for complementary tax-based interventions at the regional level and analyses the environmental, economic (including revenue generation and distributional impacts), and behavioural implications of several possible taxes.

Andalusia is the most populous of the 17 Autonomous Communities (AC) of Spain, with 8.47 million inhabitants in 2021. Andalusia’s Gross domestic product (GDP) was 160 billion euros in 2021, accounting for 13.3% of Spanish economic output. Although the Autonomous Community of Andalusia is the third largest contributor to the national GDP (after Madrid and Catalonia), the per capita GDP is the third lowest with EUR 19,026 in 2021 (INE, 2022[6]; INE, 2022[7]).

Andalusia has traditionally been an agricultural area, but nowadays the service sector predominates. The latter contributes with 22% of the Andalusian GDP, followed by public administration and defence (20%), real estate activities (12%) and extractive industries, energy and water supply, sanitation, and waste management and decontamination (11%). The agricultural sector nowadays accounts for approximately 6% of the GDP. Compared to the average GDP contribution in Spain, Andalusia’s GDP relies more on the primary sector, and less on industry. Figure 7.B.1 in Annex 7.B shows the evolution of Andalusia’s GDP and the sectors’ contributions from 2000 until 2021. While some sectors have increased their economic output steadily over time until 2019, such as the service sector, public administration and defence, and real estate activities, most sectors have remained constant or have only varied slightly over time such as extractive industries, manufacturing industries and the primary sector. The construction sector is the only one that has experienced an important decrease in the last years.

According to the Junta de Andalucía (2019[8]), 18.34 million tonnes of non-hazardous waste were generated in Andalusia in 2018. As can be seen in Figure 7.1, category LER 19 had the highest generation in 2018 (31% of the non-hazardous waste generated), this category includes rejections from waste treatment facilities and sludge from wastewater treatment plants, which can be considered as a secondary contribution to waste generation.

LER 20 (Municipal waste) represented 27% of the total non-hazardous waste generated in 2018 and LER 17 (Construction and demolition waste) 22% of the total non-hazardous waste generated in 2018. The fourth and fifth positions on generation were LER 10 (Residues from thermal power plants and iron and steel industries) that accounted for 6% and LER 02 (Agricultural and livestock waste) that constituted 5.2% of the estimated total production. This group also includes waste generated by the agri-food industry. The rest of LER groups contributed less than 5% to the total generation of non-hazardous waste in Andalusia.

Figure 7.1 also illustrates that more than 38% of the waste generated in 2018 was subjected to the operation “R12 conditioning of waste prior to recovery”, which includes the classification, disassembly, crushing, and conditioning, among other activities. This is mainly due to the contribution of the municipal waste treated at the recovery and composting plants, as well as in packaging selection plants. The second destination was landfill, more than 26% of the non-hazardous waste generated in 2018 was landfilled (D1 and D5). It should be noted that 3 Mt out of the 4.8 Mt landfilled corresponded to rejects from waste treatment facilities. Material recovery (R3, R4 and R5) accounted for 17.4% of waste treatment, which includes composting operations of the organic fraction of municipal waste, among other treatments. Finally, 9.6% of the waste is destined for intermediate storage in transfer facilities (D15 and R13).

Considering all recovery and disposal operation except intermediate storage, 68.3% of the non-hazardous waste generated in Andalusia in 2018 was valorised, while 31.7% was landfilled. According to (Sastre, Llopart and Puig Ventosa, 2018[9]), Andalusia had in 2014 a recycling rate of 31% similar to the average in Spain (30.8%).

The MSW generation (included in LER 20) accounted for 4.59 million tonnes in 2018 and only 10% was collected separately (Junta de Andalucía, 2019[8]). Separate collection included: 2% of light packaging, 3% of paper and cardboard, 2% of glass, and 3% of other selective collections. The amount of separately collected MSW has been kept an order of magnitude lower than the mixed collected waste since 2005 (Figure 7.2). Since 2013, most of the mixed waste collected in Andalusia went to recovery and composting plants (78%) including primary sorting within such facilities, while the rest was landfilled (Figure 7.3).

In 2018, the generation of hazardous waste declared to the Junta de Andalucía was 327,646 tonnes (Junta de Andalucía, 2022[12]). The sectors contributing the most to such waste generation were waste recovery (26%), extractive and metallurgic industry (22%), energy sector (13%), chemical industry and associated products industries (12%), commercial services (11%) and waste elimination (7%). The rest of sectors contributed with less than 5% of the total generation (Figure 7.4).

It should be mentioned that while the generation of such waste summed up 327,646 tonnes in 2018, the amount of hazardous waste treated or/and disposed of in Andalusia equalled 842,499 tonnes in the same year (Junta de Andalucía, 2022[12]). Such difference can be explained by two facts: 1) some waste is treated more than once (there are primary and secondary destinations) and 2) some of the waste managed in Andalusia is imported from other ACs or countries for treatment and/or disposal.


[4] Boletín Oficial del Estado (2022), Ley 7/2022, de 8 de abril, de residuos y suelos contaminados para una economía circular, https://www.boe.es/buscar/act.php?id=BOE-A-2022-5809 (accessed on 22 March 2023).

[2] Castells-Rey, I., P. Pellicer-García and I. Puig-Ventosa (2022), Los instrumentos económicos y fiscales en la Ley de Residuos, Retema, https://www.retema.es/revista-digital/marzo-abril-7 (accessed on 17 January 2023).

[5] European Commission (2021), “Green taxation and other economic instruments”, https://environment.ec.europa.eu/system/files/2021-11/Green%20taxation%20and%20other%20economic%20instruments%20%E2%80%93%20Internalising%20environmental%20costs%20to%20make%20the%20polluter%20pay_Study_10.11.2021.pdf (accessed on 17 January 2023).

[11] European Commission (2014), 2014/955/EU: Commission Decision of 18 December 2014 amending Decision 2000/532/EC on the list of waste pursuant to Directive 2008/98/EC of the European Parliament and of the Council, https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=celex%3A32014D0955 (accessed on 18 January 2023).

[10] European Parliament (2008), Directive 2008/98/EC of the European Parliament and of the Council of 19 November 2008 on waste and repealing certain Directives, https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=celex%3A32008L0098 (accessed on 18 January 2023).

[1] Eurostat (2022), Environmental tax revenues, https://ec.europa.eu/eurostat/databrowser/view/env_ac_tax/default/table?lang=en (accessed on 17 January 2023).

[3] Eurostat (2022), Recycling rate of municipal waste, https://ec.europa.eu/eurostat/databrowser/view/cei_wm011/default/table?lang=en (accessed on 17 January 2023).

[6] INE (2022), Contabilidad regional de España, https://www.ine.es/dyngs/INEbase/es/operacion.htm?c=Estadistica_C&cid=1254736167628&menu=ultiDatos&idp=1254735576581 (accessed on 17 January 2023).

[7] INE (2022), Contabilidad Regional de España. Serie 2016-2021: P.I.B. a precios de mercado y valor añadido bruto a precios básicos por ramas de actividad: Precios corrientes por comunidades y ciudades autónomas, magnitud y periodo, https://www.ine.es/jaxi/Tabla.htm?path=/t35/p010/rev19/l0/&file=01001.px&L=0 (accessed on 17 January 2023).

[12] Junta de Andalucía (2022), Índices Medio Ambiente 2019. 5. Producción declarada de residuos peligrosos por grupo de actividad y constituyente, 2018, https://www.juntadeandalucia.es/medioambiente/vem/?c=Menu/tema/580 (accessed on 18 January 2023).

[8] Junta de Andalucía (2019), “Informe sobre producción y gestión de residuos no peligrosos en Andalucía. Año 2018. Datos definitivos”, https://surminas.org/webs/default/media/Alegaciones/Informe%20PyG%20RnoP%202018.pdf (accessed on 17 January 2023).

[9] Sastre, S., J. Llopart and I. Puig Ventosa (2018), “Mind the gap: A model for the EU recycling target applied to the Spanish regions”, Waste Management, Vol. 79, pp. 415-427, https://doi.org/10.1016/j.wasman.2018.07.046.

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