This is how the compensation from the producer to the municipality works

The EU’s waste directive is largely the basis for the Swedish waste legislation. The introduction of curb side collection of packaging from households is one of several measures that need to be taken in order for Sweden to reach the material recycling target in the waste directive.

From 2024, Sweden’s municipalities have collection responsibility for packaging from households and co-located businesses. The municipalities receive compensation for the costs this entails from companies with producer responsibility for packaging. The compensation is based on a normal and efficient collection system.

The compensation is handled in a compensation model, which is defined in the Environmental Protection Agency’s compensation regulations. Ahead of the collection reform, the municipalities’ industry organization Avfall Sverige worked together with producers on a proposal for a compensation model. The proposal was implemented in the established model for which the Swedish Environmental Protection Agency is responsible.

Both the municipalities’ collection responsibility for packaging and the reimbursement procedure are new and are a consequence of provisions in the packaging ordinance, which the government decided on in 2022. The municipalities’ collection responsibility came into force in 2024.

Municipalities report, producers compensate

Each quarter, the municipalities report information related to packaging collection to the Swedish Environmental Protection Agency. The producers pay compensation, in accordance with the compensation model, to the Kammarkollegie, which pays the compensation to the municipalities retroactively and quarterly.

The compensation to the municipalities is based on

number of households with curb side collection,
number of easily accessible collection points,
number of recycling centers,
collected amount of packaging material, as well as
easily accessible information.

The compensation is standard-based

The compensation for the collection is based on a fixed and a variable part.

The variable part of the compensation is based on the amount of packaging material collected and is the same regardless of which municipal group the municipality belongs to.

The municipalities are divided into different municipal groups, which affects the size of the fixed part of the compensation.

The fixed part of the compensation is compensation for curb side collection per connected household in different housing categories and per connected co-located businesses, as well as per easily accessible collection point and per recycling centre (for packaging made of paper, plastic, glass, metal, wood and other types of packaging).

The templates for curb side collection are based on costs for, among other things, vehicles and vessels including imputed interest for the investment, salaries and fuel, service of vehicles and ongoing replacement of damaged vessels, project costs for introduction and administration (including planning).

The standard compensation for easily accessible collection points includes the cost of containers, emptying, preparation of surfaces (including ground work, paving, fences and lighting), snow removal, cleaning, ground rent and administration.

For reloading stations, the compensation is based on a template based on the cost per tonne of waste collected.

The compensation for easily accessible information depends on the number of permanent residents in a municipality.

If the compensation does not cover the cost

Municipalities that do not already have well-developed curb side collection may need to make investments in, for example, vehicles, vessels, systems and personnel. These are costs that are included in the compensation, but are written off over time. This also includes an interest compensation. Investment costs are thus not reimbursed as a lump sum, which means that the municipalities receive coverage in the long term, but not immediately in the construction phase. Certain costs may also need to be distributed between the municipality and the producer, in cases where the cost does not only refer to the curb side collection of packaging, for example when purchasing a garbage truck that is also used for the collection of food and residual waste as well as recycled paper.

The municipalities have the right to collect differences between compensation and costs via the waste tax. This is something that can be expected to happen before the municipalities have adapted their systems to the compensation. When curb side collection is fully developed, any difference between compensation and costs should be small.

The municipality’s level of ambition and level of service also have an impact on the costs. The compensation must provide reasonable cost coverage and is calculated on the basis of a cost-effective and normal collection infrastructure. A municipality that wants to provide a more advanced collection solution or have a higher level of service than the compensation covers is directed to charge the difference via the waste tax.

Other factors that affect costs are procurement, cooperation and coordination, both within and between municipalities.

It is difficult to evaluate actual costs before the system is fully developed and streamlined. In order to determine whether the municipality receives full cost coverage, real costs are required, which need to be evaluated and followed over time.

Municipalities report, producers compensate

The compensation is standard-based

Read more about the compensation