The UK government is planning to introduce a new tax on all plastic packaging that does not include at least 30% recycled content.
Presenting his autumn 2018 budget on 29 Oct, Chancellor Philip Hammond said the government aimed to enforce the tax as of April 2022 to give businesses “time to adjust their behaviour and manage any costs they face”.
The new tax will work “hand in hand” with a reformed Packaging Producer Responsibility System (PPRS), which will aim to make businesses more responsible for the clean-up and recycling costs of their packaging.
Plans for the new PPRS system, with the objective to encourage designing and using plastic packaging that is easier to recycle, will be announced later this year.
The government is set to launch consultations on both reforms “in the coming months”.
According to Hammond, future revenues from the packaging tax and packaging producer responsibility reforms will go towards investments to address single-use plastics, waste and litter.
“The tax will provide a clear economic incentive for businesses to use recycled material in the production of packaging which in turn will create greater demand for this material,” said Hammond.
The chancellor went on to say that the so-called ‘Latte Levy', which would introduce a 25p levy on disposable coffee cups, was off the table at this point as it was not “effective in encouraging widespread reuse”.
The budget also announced the allocation of £20m (€22.4m) to tackle plastic wastes and boost recycling, including a £10m (€11.2m) fund for more plastics R&D and £10m for exploring new approaches to boost recycling, such as smartbins.
Commenting on the budget announcement, Wood Mackenzie head of PET Philip Marshall said the packaging tax would face a number of obstacles.
According to Marshall, recyclate viability is already proving difficult to increase and then reuse, due to the challenging nature of collection.
"If there is a greater demand placed on recyclate used within packaging production, due to today's [29 Oct] proposed tax, the cost of said packaging is likely to rise in the short-to-medium term,” he added.
Additionally, there are technical difficulties to overcome.
“To ensure 30% recycled PET is used in packaging in the first place, this material will need to be collected and reused - which still remains one of the biggest hurdles to overcome," Marshal warned.
However, Recycling Technologies sales & marketing director Rupert Haworth, sales & marketing director at chemical recycling company Recycling Technologies, welcomed the decision.
“This new tax and PPRS reform should stimulate new investment in plastic recycling innovation and capacity here in the UK and provide recycled plastic feedstock to the industry," he added.
Some 2.26 million tonnes of plastic packaging are used in the UK each year, with a vast majority made from virgin plastic, due to the cost-efficiency of virgin materials.
Earlier this year, the government ran a call for evidence, ‘tackling the plastic problem', on how the tax system or charges could be used to reduce single-use plastic waste.
The calls, according to Hammond, received an unprecedented 162,000 responses, showing strong public interest in tackling the issue.