Unpacking the new UK Plastic Tax

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The UK’s landmark Plastic Packaging Tax (or PPT) came into effect on 1 April 2022. The new tax applies to business which annually manufacture or import more than 10 tonnes of plastic packaging – packaging that predominantly consists of plastics by weight – with less than 30% recycled plastic content. The intention is to provide an economic incentive to switch from virgin to recycled plastic and create greater value recognition of waste plastic, increasing levels of plastic recycling and reducing the amount of plastic sent to landfill or incineration.

What is the new UK plastic tax?

Businesses will need to audit their manufacturing and procurement processes and if they fall within the scope of the tax they will be liable to pay £200 per metric tonne of packaging. The UK government expects around 20,000 manufacturers and importers to be liable with the tax, and guidance states that businesses have the responsibility to carry out due diligence checks which are “relevant, reasonable and proportionate” for their business.

Plastic packaging within scope of the tax includes; Plastic bags, coat hangers (for use in the supply chain), kimble tags and labels, single use bottles, disposable pots and tubs. Any recycled content must be accredited by a recognised by an international body such as International Organization for Standardization (ISO). A full list of plastic packaging within scope of the tax can be found on the UK government website: https://www.gov.uk/government/collections/plastic-packaging-tax

In February 2022 the Organisation for Economic Co-operation and Development (OECD) published The Global Plastics Outlook report which analysed the global production, use and disposal of plastics. Key findings included:

Plastic production levels doubled between 2000 and 2019, reaching 460 million tonnes in 2019
Plastics have significant carbon footprints, contributing to 3.4% of global greenhouse emissions (1.8 billion tonnes in 2019) throughout their lifecycle
90% of plastic’s greenhouse gas emission occur upstream, primarily from production and from conversion from fossil fuels
At present just 9% of plastic packaging is recycled post-use but providing a tax incentive to close material loops could increase plastic recycling rates and reduce the reliance on virgin plastic

Why prioritise the use of recycled plastic?

The use of recycled content not only reduces the use of virgin plastic – which is a finite resource based on a hard to decarbonise and extractive industry – but also incentivises the collection and recycling of resources; currently 50% of plastic packaging is sent to landfill, 19% is incinerated and it is thought a whopping 22% ends up polluting the natural environment.

The UK Plastic Packing Tax doesn’t cap plastic production and it is important to acknowledge that we should transition away from using plastics where it can be avoided. However, there are currently areas where alternative materials are not feasible or not practical, in which case plastic should be as circular as possible.

The Carbon Trust’s Plastic Packaging Framework aims to facilitate the shift towards a circular economy against three key factors; recycled content, recyclability and resource efficiency. The framework reviews packaging performance across three main areas, with an optional fourth, and is a good foundation to identify where your organisation can influence plastic packaging circularity:

Taking action to increase recycled content in plastic packaging
Working to improve the recyclability of plastic packaging
Implementing resource efficiency within the design and production of plastic packaging
Understanding plastic leakage and planning to avoid and mitigate its impact

We’ll be covering more issues relating to packaging and plastics in our Insights page.

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