Tackling Packaging Waste + Plastic Tax

For those in packaging manufacturing, retail and waste management, the EU’s Circular Economy Action Plan and Green Deal are of particular relevance. These two initiatives are at the core of the EU’s environmental strategy that aims to make sustainable products the norm in the EU, empower consumers to make green choices and move towards a less wasteful economy through more circular initiatives. 

The EU has implemented a plastic tax/contribution to raise money from member states to support the Covid recovery. They apply a levy at a state level of €800/tonne on virgin plastic. In addition a number of countries including Spain and Italy, apply nation-specific taxes.

A key action for the SUPD is to make recycling profitable for business and the UK Plastic Packaging Tax is the nation’s transposition of the Directive as a key goal is to increase the demand for recycled plastic content and reduce our reliance on fossil fuels.

Whilst the UK doesn’t implement EU directives anymore, the UK often moves in tandem with EU member states in increasing regulations on environmentally harmful resource usage and waste.

— Environment in the UK is a devolved matter that local councils implement
— The EU has also implemented a plastic tax/contribution to raise money from member states to support the Covid recovery. This is focused on non-recyclable waste 

The Plastic Packaging Tax came into effect on the 1^st April 2022. The purpose of the tax is to incentivise the use of recycled material in plastic packaging. The rate of £200/tonne applies to plastic packaging that:

— Is manufactured or imported into the UK
— Is primarily plastic in weight
— Has less than 30% recycled content 

For UK businesses and those operating within the UK with plastic packaging in their product range, it will result in significant commercial impacts and higher standards for both transparency and data collection. 

It’s not easy for many businesses to understand the real commercial implications of this new policy because current data is often vague and lacks crucial specificity. Even many well-established producers need to give careful consideration to how they collect data and what they can really trust.

The UK Government defines plastic as “a polymer material to which additives or substances may have been added”. The tax will not include cellulose-based polymers that have not been chemically modified, like viscose, nor will it include compostable plastics.  

On 1st July 2022, the Government’s Digital Online Service will be opened to allow companies to submit quarterly Plastic Packaging Tax Returns. The information that needs to be submitted includes the total weight of plastic packaging manufactured inside and outside the UK and the weight of packaging that meets the new 30% threshold. HMRC will calculate the amount of liable and exempt packaging in kilograms from this data.

It is essential that businesses implement methods of measuring their plastic packaging output and take action to modify packaging portfolios to reduce the tax burden on business revenues. Whether this means integrating recycled content into plastic packaging or looking for alternatives to plastic, finding a solution can be mired in challenges. 

A Packaging Strategy is the first step to helping your business transition toward a policy-proof packaging portfolio that reduces regulatory fees, reputational risk and, crucially, your impact on people and the planet.

Our sustainability experts offer practical advice and consultancy so you can navigate the complexities of the Plastic Packaging Tax, and other related policy areas.