FBU calls for review of the draft law on the environmental tax for waste disposal: changes are premature and contradict EU practice

The Federation of Employers of Ukraine (FBU) has sent a letter to the Minister of Economy and Environment, Oleksandr Kravchenko, calling for a review of the current draft law, which proposes changing the classification of waste and increasing the rates of the environmental tax for its disposal. As reported by RBC-Ukraine, the organization believes the proposed amendments are premature: they could significantly increase the financial burden on mining enterprises and do not align with the approaches used in the European Union. The key complaint from the business sector is that fiscal changes are being proposed before the adoption of the relevant law "On the Management of Waste from the Mining Industry," which should define the legal status of such waste, accounting rules, and classification criteria.

Essence of the complaints: fiscal changes without a management base

In the appeal, the FBU emphasizes that, in fact, the issue concerns the introduction of tax innovations without the simultaneous creation of comprehensive waste management mechanisms in the mining sector. The Federation notes that waste is generated directly during the extraction of minerals; therefore, the tax cannot stimulate its reduction in the same way as household or industrial waste, which can be sorted and recycled. "Taxing waste that is neutral by its nature in the mining industry will not have an environmental rationale but will create an additional financial burden for enterprises during wartime," the FBU notes.

European context and the practice of other countries

The business argumentation relies on European legislation, which provides for a separate approach to mining waste, particularly inert waste and uncontaminated soil, which pose lower environmental risks. The FBU cites EU Directive 2006/21/EC, which does not provide for the direct taxation of such waste, while for certain objects, it applies a mechanism of financial guarantees ensuring the fulfillment of land reclamation obligations. The organization also cites examples from Poland, Canada, the USA, Sweden, and South Africa, where a special tax on the placement of mining dumps during iron ore extraction is not applied.

Risk of retroactive taxation of accumulated waste

The FBU identifies a separate risk: the possible extension of the new tax to already accumulated waste. In the Federation's opinion, such an approach may contradict the principle of non-retroactivity of laws, as enterprises could not have accounted for future tax burdens when conducting previous activities. An additional problem is that the draft law itself does not contain a clear mechanism for distinguishing between already accumulated waste and that which will be generated after the changes come into force, creating legal uncertainty for the industry.

Contradictory data

The positions of the parties in this issue differ substantially. On one hand, the regulator (Ministry of Economy and Environment) is advancing a draft law aimed at tightening environmental fiscal pressure and revising waste classification—i.e., strengthening tools of state control. On the other hand, the FBU insists that without a relevant law on the management of mining waste, such changes are premature, lack environmental logic for inert waste, and contradict both EU Directive 2006/21/EC and the practice of several developed countries. At the same time, the text of the appeal does not provide the Ministry of Economy's public position on the Federation's specific arguments, leaving room for different interpretations of the expediency and timing of introducing the tax.

What business proposes and why it is important for the investment climate

The FBU proposes first adopting the relevant law on the management of mining waste and bringing Ukrainian regulation into compliance with European norms, and only then comprehensively reviewing the norms of the Tax Code. The Federation emphasizes that "the fiscal function of the state should not harm industry and worsen the investment climate." The context of the discussion is intensified by the fact that, against the background of new trade rules with the EU, Ukraine must launch the National Emissions Trading System (NETS), making the consistency of environmental and tax regulation particularly sensitive for the mining sector.