Government proposals to impose a tax on plastic bags are in breach of EU regulations and could be challenged by the European Commission, the Plastics Industries Association warned yesterday.
The proposal to impose a tax of between 3p and 10p per bag is contained in a consultants' report commissioned by the Minister for the Environment, Mr Dempsey.
However, the PIA's director, Mr Reg McCabe, said the tax would be a breach of the 1994 EU Packaging Waste Directive.
The four Irish plastic bag manufacturers are complying with the regulation's requirements to participate in a local recycling scheme and provide recyclable and non-toxic products.
"Once we comply with these requirements we should not have to face additional penalties," Mr McCabe said.
The State's four domestic plastic bag manufacturers are already paying a £80,000 levy to fund Repak, the industry-sponsored recycling organisation, Mr McCabe said.
PIA is seeking legal advice, but Mr McCabe pointed to the current action which the European Commission has taken the Danish government to the European Court of Justice over Denmark's ban on the use of metal cans for drinks. The Commission is claiming the ban is a breach of the 1994 directive.
A Department of the Environment spokesman said Mr Dempsey had been assured by the consultants that the measure was not in breach of EU regulations.
The consultants' report cites several examples of environmental product levies which are legal within EU law. These include petrol duty differentials in the Republic of Ireland, pesticide taxes in Denmark and taxes on paper, pulp and board in France.
A levy was permissible if it was part of a general system of taxation and applied equally to all products, irrespective of origin. "A levy applied to all bags sold in Ireland would therefore be permissible, but a levy applied only to plastic bag imports would not be part of a general taxation system and would unfairly discriminate against imported products," the consultants noted.
The Labour Party environment spokesman, Mr Eamon Gilmore, said yesterday that the only way to deal with the issue of plastic bags and other excessive packaging was to either ban them, as in other European countries, or apply a punitive tax that would outweigh the benefits of their use.