According to a report commissioned by the G20 nations, governments risk “global tax chaos” as they chase decreasing revenues from multinational companies unless the international tax regime is radically overhauled. The report states that “a bold move by policy makers” is needed. The OECD has said it is “a turning point in the history of international co-operation on tax”. The action plan sets out 15 initiatives for giving tax authorities around the world the tools to tackle those avoiding full payment of taxes. Among the highlights are additional disclosures that multinational companies must make to all tax authorities, helping officials to know where to look for the worst avoidance. The proposals would require companies such as Amazon, with extensive warehouse networks in multiple countries, to pay higher levels of tax. (The Guardian)
UK cuts tax for fracking industry
The UK Treasury has announced a generous tax regime for shale gas to enhance the UK’s energy security. The tax on shale production will be cut to 30 percent compared with the 62 percent paid by most of the oil and gas industry. However, there is environmental concern about whether the fracking process can pollute groundwater and produce emissions of the greenhouse gas methane. UK Government Ministers have stated that they are keen to replicate the success of the US, where fracking has produced a surplus of natural gas. But industry experts from Ofgem and Deutsche Bank as well as the company in receipt of the tax break, Cuadrilla, have reportedly admitted that it will not lead to reduced energy prices for consumers. (FT* and The Guardian)
Consumers
Bad news on bag use as consumption increases
Progress on reducing the number of single-use plastic carrier bags issued in the UK has stalled as last year saw an increase in usage, according to the latest figures from WRAP, the UK circular economy and resource efficiency organisation. Based on data from Asda, Co-operative Group, Marks and Spencer, Morrisons, Sainsbury’s, Tesco and Waitrose, UK supermarket customers took home 8.1 billion plastic bags in 2012, a 1.3 percent increase compared with 2011. However, this is not a uniform picture across the board; since a carrier bag levy was introduced in Wales in 2011, usage of carrier bags has dropped from 270 million bags in 2011 to 70 million in 2012. Commenting on the figures, the British Retail Consortium (BRC) stated that retailers were working to reduce bag consumption. (Edie News)
Environment
Energy chiefs warn on EU oil sands directive
Chief executives of some of the UK’s largest energy service companies have warned of “significant economic consequences” if the EU implements a fuel quality directive that would classify crude oil from Canada’s oil sands as dirtier than other types. The chief executives of AMEC, Weir Group and Wood Group have stated in a letter to the Financial Times that their companies are part of a European supply chain that benefits from the development of Canada’s oil sands industry. The fuel quality directive was passed in 2007, but agreement has yet to be reached on how certain articles will be enforced. (FT)*
Fracking companies up recycled water use
The US companies Halliburton, Baker Hughes and FTS International are among the oil and gas firms that are increasingly using recycled water in their hydraulic fracturing. Most fracking in the US is happening in water stressed regions, such as Texas and Colorado. Companies are looking to reduce the high costs of hauling millions of barrels of water to oil and gas wells. Halliburton’s H2OForward recycling service reported that it has saved over $70,000 per well with no loss of production. FTS International said that it uses up to 100 percent reclaimed water in some Oklahoma and Texas locations. (Environmental Leader)
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