The Plastic Packaging Tax and What it Means for the Recycling Sector

Plastic packaging

In a bid to reduce virgin polymer use in plastics, the UK government announced back in 2017 that a tax on single-use plastic was to be outlined and enforced over the coming years. 

Fast forward to 2021 and the proposed ‘Plastic Packaging Tax’ is now set to commence from 1st April 2022, creating important changes that UK manufacturers, importers, and consumers should be aware of. 

After almost 4 years in the making, exact conditions detailing how this tax will be enforced have been agreed by the UK government with expectations to “transform the economics of sustainable packaging”, according to Chancellor Philip Hammond. 

The Chancellor has also stated that “we must become a world leader in tackling the scourge of plastic littering our planet and our oceans”. Other key figureheads in the industry have agreed that introducing a new approach to managing plastic is necessary, with the Chief Executive of UK recycling at Suez, David Palmer, saying the Chancellor has “recognised that a systematic change is required”. 

This comes following a recent upsurge in both social and political movements towards creating a global circular economy. With public figures from David Attenborough to Greta Thunberg working to increase public awareness on environmental issues such as climate change, the impacts of plastic packaging have become a key focal point to address in creating a circular economy. 

Outlines of the proposal

Since receiving 162,000 responses to the original proposal back in 2017, the government has been defining the small details that make up the Plastic Packaging Tax. At Budget 2018, one such factor outlined that any plastic packaging containing less than 30% recycled plastic would be taxable at a rate of £200 per tonne. 

In this instance, liable plastic is being defined as ‘plastic by weight’ and will also apply to both plastic packaging which has been manufactured in the UK and that which has been imported, whether the product is filled or unfilled. 

To help out smaller businesses, a threshold has been set which exempts companies manufacturing or importing less than 10 tonnes of taxable plastic per year. Further thresholds and exemptions are also forecasted to be put into place, however these are expected to be based on statistics gathered from one years’ monitoring of the policy. 

What happens next?

While the Plastic Packaging Tax was originally designed as a measure to reduce the amount of virgin plastics being manufactured and imported to the UK, some are now concerned about the knock-on effects that this may have on consumers. 

The UK government has stated that the Plastic Packaging Tax is “not expected to have any significant macroeconomic impacts” (UK Gov). However, the exact way in which the tax will play out within the commercial sector is yet to become clear, with expectations that the tax may be passed onto the consumer being discussed by multiple sources. 

This could be translated through an increase in the price of goods, a charge on plastic usage, or a number of other ways which could in turn lead to a shift in the way in which consumers purchase groceries and other items. 

Another major knock-on effect that the Plastic Packaging Tax has had is visible within the recycling sector. As a manufacturer of recycling equipment, at Rotajet we have witnessed firsthand the increase in interest for recycling plastic across the UK, with Company Director, Colin Steward, stating that he has seen an “unprecedented rise in demand for our machinery from plastic producers”.

Other leaders in the recycling industry have reportedly experienced a similar influx, which comes as no surprises as major companies such as Coca Cola and The Coop have recently pledged to move towards a greener way of packaging. For Coca Cola, this means achieving 100% recyclable packaging by 2025, with at least 50% of their plastic bottles being made from recycled plastic. On a similar trajectory, The Coop has also committed to using a minimum of 50% recycled plastic in PET plastic pots, trays, and punnets, and a minimum of 50% recycled HDPE for items like milk bottles by 2021. 

While a number of key details are still yet to become clear, the overarching goals for the Plastic Packaging Tax appear to have been well received by figure heads across the industry, with expectations that both the economic and environmental impacts of the measure will be a promising step in the right direction. 

Key Takeaways: 

  • Plastic Packaging Tax to commence on 1st April 2022
  • The tax is likely to impact: UK plastic manufacturers, importers, and possibly consumers
  • The tax is to be enforced on any plastic packaging containing under 30% recycled material
  • Plastics containing under 30% recycled material will be charged at £200 per tonne
  • New legislation aims to incentivise a reduction in the manufacturing and use of virgin plastics
  • The tax will only apply to companies handling over 10 tonnes of plastic packaging per year
  • A one year review of data could lead to minor changes in the details of the policy, such as exemptions and thresholds defining who is liable to paying the plastic tax

To found out how our products can help you to prepare for the Plastic Packaging Tax, see our range of plastic recycling equipment here, or visit our dedicated site for Drum, IBC, and Small Container washing here.

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