FREQUENTLY ASKED QUESTIONS REGARDING THE COORDINATED TAX OR FEE ON BASIC CHEMICALS

This fact sheet by the Center for International Environmental Law proposes a coordinated international tax or fee on the production of basic chemicals to fund chemicals management in developing and transition countries, operationalizing the 'polluter pays principle'.

• The chemical industry is a major global economic and environmental force, serving as the world's second largest manufacturing industry, the largest industrial energy consumer, and the third largest emitter of carbon dioxide. Global sales, including pharmaceuticals, reached US$5.7 trillion in 2017 and are expected to double by 2030.
• Significant social and health costs associated with chemical mismanagement are externalized and not paid by the industry. These include an estimated US$977 billion annually for childhood lead exposure in low- and middle-income countries, and annual health costs for endocrine disrupting chemicals in the European Union estimated at a median of €157 billion.
• International chemicals agreements are severely underfunded. For the 2018–2022 period, the Stockholm Convention's net funding needs were estimated at approximately USD$4.4 billion, which is more than ten times the tentative allocation from the Global Environment Facility (GEF).
• The document proposes a coordinated tax or fee of 0.5% on the production value of 'basic chemicals'—early stage chemicals produced from raw materials like petroleum and natural gas. Based on American Chemistry Council data showing basic chemical sales of roughly $2.3 trillion, such a fee could raise US$11.5 billion annually.
• The proposed fee is designed as a production tax rather than a retail sales tax to prevent companies from avoiding payment through vertical integration, where chemicals are transferred between branches without a recorded sale.
• The proposal aims to operationalize the 'polluter pays principle' by shifting external costs from the public sector to the private sector. The funds would be pooled into a dedicated international fund to support chemicals management in developing and transition countries, as many of these nations lack a domestic manufacturing industry to tax.
• The document asserts that such a fee is compatible with WTO law because it would be a purely domestic policy applied to domestic manufacturers without rebates or special treatment for exports.

APA

Center for International Environmental Law (2020). FREQUENTLY ASKED QUESTIONS REGARDING THE COORDINATED TAX OR FEE ON BASIC CHEMICALS. https://www.ciel.org/wp-content/uploads/2020/09/ipen-ciel-producer-responsibility-faq-vf1_2-en.pdf

Chicago

Center for International Environmental Law. FREQUENTLY ASKED QUESTIONS REGARDING THE COORDINATED TAX OR FEE ON BASIC CHEMICALS. 2020. https://www.ciel.org/wp-content/uploads/2020/09/ipen-ciel-producer-responsibility-faq-vf1_2-en.pdf.

Wikipedia

{{cite report |author=Center for International Environmental Law |title=FREQUENTLY ASKED QUESTIONS REGARDING THE COORDINATED TAX OR FEE ON BASIC CHEMICALS |date=September 2020 |url=https://www.ciel.org/wp-content/uploads/2020/09/ipen-ciel-producer-responsibility-faq-vf1_2-en.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{centerforinternationalenvironmentallaw2020frequently, author = {{Center for International Environmental Law}}, title = {{FREQUENTLY ASKED QUESTIONS REGARDING THE COORDINATED TAX OR FEE ON BASIC CHEMICALS}}, institution = {Center for International Environmental Law}, year = {2020}, month = sep, url = {https://www.ciel.org/wp-content/uploads/2020/09/ipen-ciel-producer-responsibility-faq-vf1_2-en.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }