Impact of a Plastic Packaging Tax in the UK

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By: Arin Ghosh -- Senior Research Analyst – Packaging

01 January, 2017

ARTICLE

Abstract

Recently, the Dutch government presented the “Plastic Pact,” which aspired to provide greater focus on recycling in the plastic packaging industry. Packaging manufacturers have promised to achieve the target by using at least 35 percent recycled materials in packaging. However, this approach has been challenged by the problem of virgin packaging raw materials being considerably cheaper and of better quality than recycled materials. Film extruders and converters will face definite challenges to meeting the deadline in their current supply chains.

On October 29th , 2018, the UK government proposed a solution by introducing a tax on plastic packaging products alongside the import of packaging products. As a conclusion, the UK government finally proposed a tax to be levied on packaging products containing less than 30 percent recycled materials as of April 2022. The tax would involve a flat rate per ton of packaging material. This article describes the current situation of the plastic packaging industry in the UK as it considers the upcoming taxation.

Dip in Demand for Virgin Plastics in the UK?

Around 2.26 MT of plastic packaging are utilized in the UK annually, with virgin plastics making a major contribution across industries. Introducing taxation could decrease demand for virgin plastic materials, as it would ensure an increase in their price. However, such an initiative would incorporate a considerable reduction in fossil fuel usage, and CO2 emissions would be limited to a significant level. At the same time, the collection and recycling of waste plastics would become more attractive, as the packaging materials manufactured from them would be untaxed.

Present Waste Plastic Packaging Recycling Scenario in the UK

According to Adrian Griffiths, founder of Recycling Technologies, the UK recycles 1.05 million MT of plastic waste annually, but domestic waste processing capacity in the UK is 350,000 MT. Therefore, the remaining 67 percent of plastic waste is sent to Asia for recycling. To overcome the present scenario, the government must take the initiative in developing its recycling infrastructure. To tackle the present situation of recycling in the UK, the government announced a fund donation of GBP 20 million, to help with processing of plastic packaging waste and boost recycling across the value chain, from manufacturers to consumers. The government has proposed GBP 10 million for the research and development process and the rest for the introduction of smart bins to the recycling process around the UK.




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