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The shadow economy in the tire trade is not declining

For more than 40% of the tires sold on the Latvian market do not have a management agreement and, most likely, no natural resources tax is paid, said Tīna Lūse, the head of the Latvian Tire Management Association (LRAA).

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She explained that according to the State Environmental Service (SES), last year 15,300 tons of tires were sold in Latvia, while in 2018, 16,300 tons. But after Central Statistical Bureau (CSB) data, the amount of tires sold annually is about 10,000 tons higher than the official SES data show. For example, in 2018 the CSB data show that 28,700 tons of tires were sold and in 2019 – 26,000 tons.

This means that no management contract is concluded for more than 40% of the tires sold on the Latvian market, and most likely, the natural resources tax is not paid. “These tires are more likely to end up in illegal storage, remain in households, and end up in the wild,” the association said.

Luse expressed that no solution has been found for the management of tires that are sold together with road transport. For example, when calculating the first registration of a road vehicle according to the Road Safety Directorate (CSDD), it can be estimated that in 2019, together with the sold cars, the weight of tires entering the Latvian market is 4760 tons (in addition to those 26 0000 tons already mentioned in the CSB statistics). The LRAA therefore called on the Ministry of Environmental Protection and Regional Development (VARAM) to come up with a solution on how to manage these tires as well.

It is the uncontrolled process of tire circulation in the country that has created a situation that a large amount of uncollected and unprocessed tires has developed in Latvia, which according to the MEPRD data at the end of 2017 was 105,000 tons.

“In general, the situation in the tire management industry has normalized in recent years and there are no more operators in the market whose ability to meet regulatory requirements for tire collection and recycling was questionable. However, overall, the situation with tire management has not improved significantly,” said Lūse. that citizens still do not have easy access to the infrastructure to transfer tires to all uniform and easy-to-understand rules.

She said that the same problem is faced by tire dealers who sell tires from different manufacturers on the market – tire collection is not ensured on equal terms for everyone. “The reasons can be found in the fact that each operator operates according to its own rules of the game. is so small that poorly regulated competition does more harm than good when viewed from the point of view of final consumers and the environment, “explained Luce.

The association pointed out that there are currently three processing plants in Latvia. Last year, the most modern tire recycling plant in the Baltics was opened in Tukums, but it is clear that this alone is not enough to effectively reduce the amount of tires stored. About half of the tires imported during the year can be disposed of, in 2018 they were 10,700 tons, of which 6,300 were recycled and 4,400 tons were recovered. In turn, in 2019, only 6470 tons were processed. Most of the tires collected in Latvia are recycled in other European Union countries or abroad.

Kaspars Zakulis, the director of “Latvijas Zaļais punkts”, regretted that the management of tires still faces the situation that a large amount of tires is entering the market, for the collection, sorting and recycling of which no one is responsible. In addition, historical savings resulting from the activities of unscrupulous merchants also stand where they stood.

“It is therefore necessary to think about systematic changes to the tire management system that would prevent unscrupulous market players in both the commercial and management sectors from shirking their responsibility for managing and recycling tires once they have reached the end of their lives and people want to dispose of them in an environmentally friendly way,” Zakulis.

Every year, the SES carries out inspections at Latvian car repair shops to find out whether the companies have received a category C certificate and work in compliance with environmental protection requirements. However, SES data show that about half of the companies inspected avoid taking responsibility for tire management and do not comply with other environmental requirements, reducing the company’s costs. Therefore, a difficult situation arises in the market environment, as qualified companies need to compete with car repair shops whose service price list is significantly lower when selling tires that are not subsequently managed.

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