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

The chemical industry is a major global energy consumer and carbon emitter that externalizes significant social and health costs. Current international chemicals agreements are severely underfunded, relying on public taxpayers rather than the industry. The document proposes a 0.5% production fee on basic chemicals—the early-stage building blocks of the industry—to operationalize the 'polluter pays principle'. This mechanism could potentially raise US$11.5 billion annually, far exceeding current funding levels, to support sound chemicals management globally.

• The chemical industry is the world's second largest manufacturing industry, the largest industrial energy consumer, and the third largest emitter of carbon dioxide, with sales totaling US$5.7 trillion in 2017.
• The industry externalizes massive health and environmental costs, including an estimated US$977 billion annually for childhood lead exposure in low- and middle-income countries and between €52–€84 billion in annual health costs from PFAS in thirty European Economic Area countries.
• International chemicals agreements, such as the Stockholm, Rotterdam, Basel, and Minamata Conventions, are severely underfunded and often rely on public funding via the Global Environment Facility (GEF) rather than industry contributions.
• The proposed coordinated fee would be a 0.5% tax on the production value of 'basic chemicals' (early-stage chemicals from petroleum, natural gas, and other raw materials), which could generate US$11.5 billion annually.
• A production-based fee is preferred over a retail sales tax to prevent 'cascading' tax burdens and to capture value from vertically integrated companies that transfer chemicals between branches without a recorded sale.
• The proposal aligns with the 1992 Rio Earth Summit's 'polluter pays principle', arguing that producers should bear the costs of pollution prevention and control because these costs result from industry economic decisions.

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} }