UK Proposes World Leading Plastic Packaging Tax | Valdamark Foil Packaging

The United Kingdom government is launching a consultation to help craft its potential plastic packaging tax, strengthening their commitment to use more recycled materials in packaging.

The United Kingdom government is today launching a consultation to help initiate the potential plastic packaging tax, thus demonstrating their commitment to more recycled packaging.

The United Kingdom is looking to bring in what it calls a ‘world leading’ plastic packaging tax by April 2022. Championed by the environment secretary Micheal Give it will apply in its current draft to all single use plastic packaging that isn’t produced from at least 30% recycled material.

As you can imagine this has opened up a debate to decide exactly what items the tax would apply to and the validity of the 30% recycled content threshold.

Also put forward in the consultation are schemes for Deposit and Return recycling which would apply to cans & bottles.

Whats does a Plastic Packaging Tax include?

At present we consume over 2 million tonnes of plastic packaging in the United Kingdom a year. In spite of this staggering statistic the vast majority of this comes from newly made plastic packaging materials. Rather that recycled.

With this tax the government is hoping to encourage the large multi national manufacturers to use more recycled content.

It is a step in the right direction. At the moment plastic packaging waste simply ends up in landfills or incineration. Also the production of plastics by packaging manufacturers uses higher energy amounts & produces far more emissions that recycling processes.

Can this be achieved?

The UK government has acknowledged that a plastic packaging tax needs to be achievable and realistic.

It has stated that the 30% threshold is good for the foreseeable future. After all they do not want to discourage producers from making the necessary investments to not only meet the target but aim to exceed it in the future.

The tax would be introduced in line with the revised packaging producer responsibility regulations. This focuses more on the design of plastic packaging and included initiatives for producers to design products that are easier to recycle.

Tax would include many Plastics!

So which plastics would be included? The government would get the definition from directive on single use plastics. They would include bio based plastics as well as biodegradable and oxo degradable.

Plastic tray, bottles and lidding materials will also be included as well as products which contain plastic like Bulk packaging for hazardous materials

Its interesting to note that whilst different organisations could be supplied separate by various manufacturers. They buyer would still get taxed at the point of production.

So what happens now after the PPT implementation?

The PPT is effective from April 1, 2022 onwards. This tax promotes the use of recycled plastic in packaging, rather than new plastic. It applies to all plastic packaging whether produced in or imported. The tax requires at least 30% of recycled plastic to be included in the final packaging.
Starting from April 1, 2023, the tax rate increased to £210.82 per tonne. Thus, businesses have to develop procedures to ensure compliance with the PPT promptly. So, let's examine key insights and look ahead to upcoming developments.

One Year In – Valuable Insights

1.  Data is Crucial. The PPT imposed substantial administrative demands on numerous businesses. Compliance necessitates collecting more detailed and specific data on plastic packaging. This data might be outside of typical financial systems and can come from various sources. Businesses face challenges in gathering information from their supply chain partners. Also, communicating their responsibilities is important. Moreover, obtaining more specific data remains a focus.
2. Team Responsibility. PPT's operational nature often necessitates a cross-functional effort. This cross-functional feature would help in managing compliance obligations. While the PPT team often handles tax responsibilities, this isn't always the case. Many companies explore the most effective way to address various compliance requirements. Collaboration is essential between the PPT team and other business departments. It includes procurement, compliance, logistics, IT and product.
3. Promoting Circularity. PPT encourages businesses to evaluate their environmental impact throughout a product's life cycle. Nowadays, many companies incorporate circularity steps into their everyday decision-making. This includes reducing or eliminating virgin plastic with recyclability in mind. Nonetheless, there is still work to be done before the UK's economy achieves true circularity. Achieving the circular economy needs fresh business systems and models. It also involves collaboration with others throughout the supply ecosystem.

What Lies Ahead – Policy Developments

1. New Plastic Packaging (PP) Taxes Rate. All member states in Europe must contribute to the budget based on not-recycled plastic waste, effective from January 1, 2021. Spain implemented a PPT on January 1, 2023, with the rate €0.45 per kg of non-recycled plastic. Italy is considering a similar tax. The anticipated introduction is on January 1, 2024 (subject to potential delays).
2. EPR Changes. The UK's EPR (Extended Producer Responsibility) program will roll out in phases starting in 2024. Businesses will be responsible for their packaging collection, recycling, and other costs. After two or three years, eco-modulation will be initiated. It requires companies to pay more for less to zero sustainable packaging. This change will increase compliance costs for businesses, significantly. Additional data on the characteristics of packaging may be needed for reporting.
3. Other Changes. Various jurisdictions are implementing bans on specific single-use plastic. These include Canada, France, and the UK. The UK is also considering a buy-deposit-return scheme for beverage containers. This scheme may start in 2025 (with Scotland's in August 2023).