Waste management company Veolia is calling the UK government to raise the Plastic Packaging Tax (PPT) to ‘incentivise the end markets for recycled content, give investors confidence to build domestic infrastructure and stimulate green economic growth’, it said in a statement.
The PPT was introduced on April 1, 2022, with the aim of providing an economic incentive to use recycled plastic in packaging, thereby stimulating an uptake in recycling and collection of plastic waste. Since Jan. 1, 2024, the tax requires producers of plastic packaging manufactured in, or imported into, the UK to pay GBP 217.85 per tonne of plastic packaging if it contains less than 30% recycled plastic.
According to a study by climate action NGO Wrap commissioned by Veolia, however, the tax is not achieving its aims as only 22% of material used in plastic packaging is from recycled sources.
Veolia is thus recommending the government to increase the PPT to 35% recycled content and GBP 275 per tonne this year, escalating to 50% and GBP 500 per tonne by 2030.
To achieve this the UK would need to invest GBP 1.1 billion in building ten new plastic sorting and 30 new plastic reprocessing facilities, creating 2,500 new jobs, and reducing annual carbon emissions by 1.8 million tonnes of CO₂ equivalent, research by Veolia has found.
Veolia argues the tax raise would stimulate demand for recycled content and ensure the UK remains competitive with the European Union, which has recycled content mandates through legislation like the PPWR.
“The recycled plastic industry cannot be ignored if we are serious about building a green economy,” said Gavin Graveson, Veolia senior executive vice president, Northern Europe zone. “The Plastic Packaging Tax is a crucial lever to stimulate growth in the sector, but it needs recalibrating so we create a market where it is cheaper to be sustainable and more expensive to pollute by using virgin polymers. We need to bring thousands of tonnes worth of recycling capacity online - and fast,” he added.
A plastic tax hike is viewed favourably by the public, according to a survey of 2,000 UK adults by YouGov in February 2024. It found that 69% would support an increase in tax for companies who do not use recycled materials in their packaging, and that 82% would like to see an increase in recycled content used in standard packaging.
In the financial year 2022 to 2023, the United Kingdom’s HM Revenue and Customs (HMRC) collected GBP 276 million (€323 million) in plastic in PPT receipts, GBP 41 million more than the Treasury predicted.