A tax worth paying? UK plastic levy cheaper than recycled films, warns Camvac’s head of sales

26 May 2022 --- The UK Plastic Packaging Tax is now in force, but the crippling costs and low availability of recycled food-grade plastic are encouraging businesses to pay the tax rather than embrace more circular packaging solutions, warns Andrew Smith, head of sales at Camvac.

PackagingInsights speaks to Smith at the ongoing Packaging Innovations 2022 trade show in Birmingham, UK, where the company is launching ExtraPET PCR, a high-barrier lidding film with over 30% post-consumer recycled (PCR), and Camplus Extra MDO PE, a high-barrier metalized MDO PE in single web-form and laminate structure. 

“The UK Plastic Packaging Tax hasn’t increased demand for the PCR products that Camvac manufacturers at all – it’s increased inquiries for those products – but the problem is that the tax costs less than the price of using the PCR films.”

“At the moment, the availability of PCR cannot keep up with the demand. One of the challenges for some suppliers is that after they develop the film capabilities, the PCR availability for food-grade use doesn’t match the potential demand. Also, some markets are taking more of the PCR share.”Andrew Smith, head of sales at Camvac: “The availability of PCR cannot keep up with the demand.”

The tax places a £200 (US$252) per metric ton levy on producers or importers of plastic packaging not containing 30% recycled plastic content. The legislation is expected to impact around 20,000 businesses.

No government guarantees
Despite low PCR availability, the UK government has failed to guarantee the funds raised from the tax will be invested in recycling infrastructure, further frustrating the industry’s ability to comply with the law. 

“Currently, the UK government doesn’t appear to give much investment back into the plastics market – it’s mainly dominated by the private sector. Not much of the tax that’s being gathered is going back into developing collection schemes or recycling films other than polythene,” continues Smith.

“The UK is very good at recycling polythene but not so good at recycling polyester and polypropylene. Maybe an education program for the public to understand what can and can’t be recycled would also be beneficial.”

According to Veolia-commissioned YouGov research, 77% of British retail and manufacturing businesses were not even aware of the UK Plastic Packaging Tax when it launched in April.

This month, Lindum Packaging warned one in five companies using plastic packaging in the UK has seen their costs increase by more than 75% due to the tax.Camvac were the first metallization company in Europe to produce food-contact grade metalized OPP and PET.

Pandemic-time opportunities
The tax was introduced against the backdrop of COVID-19-induced supply chain disruptions. However, for Camvac, the pandemic has also opened up new markets for its specialty high-barrier films.

“COVID-19 allowed Camvac to grow in some chilled product markets – in particular, the COVID-19 vaccine, which requires vacuum insulation panels to maintain the necessary low temperature during transportation. We removed the need for refrigerator transport, which is difficult to get hold of,” explains Smith.

“We also supplied customers with more efficient packaging materials for transporting bulk food.”

“In terms of the packaging market, people are now looking for more local suppliers – not the ‘just-in-time’ supply from miles overseas. More local opportunities will become available due to the problems caused by the COVID-19 pandemic,” he adds.

Stay tuned to PackagingInsights for more in-depth coverage of the major themes at Packaging Innovations 2022.

By Joshua Poole