How could the proposed UK tax on non-recycled plastic strain the packaging industry?

05 Nov 2018 --- Food and beverage companies could be taxed on plastic packaging that contains less than 30 percent recycled content from April 2022, the UK Chancellor Philip Hammond announced in the 2018 Budget speech last week. Kenton Robbins, the Managing Director of PFF, the UK’s largest independent producer of thermoformed plastic for food packaging, notes that applying a degree of pressure to deal with plastic waste is the right thing to do, but that there are hurdles facing the UK recycling industry that will make 30 percent recycled plastic levels difficult for some companies to achieve. 

Speaking to PackagingInsights, Robins expands on the difficulties of producing and obtaining good quality recyclate, rising polymer prices and the importance of consumer education on recycling. 

Alongside the potential tax on the packaging that contains less than 30 percent recycled content, the budget also announced US$26 million (£20 million) to be put toward recycling infrastructure, but this amount is “simply a drop in the ocean,” says Robbins.

“30 percent recycled content is not difficult for the PFF business. This is because we produce our plastic sheet on site and have control over what we put in to blend the plastics so that we can blend a high level of recyclate – predominately bottle flake,” says Robbins.

However, this year polymer and feedstock prices have risen sharply.

“In theory, there should be more recyclate coming in than ever before, but unfortunately, the quality is going down based on the fact that consumers are throwing every type of plastic into the recycling bin,” says Robbins.

In an atmosphere of heightened awareness around plastic waste, consumers can be causing more trouble with their good intentions around recycling, Robbins explains, which in turn is reducing the quality levels of UK recyclate. This can impact companies who only trade in virgin material, yet who may want to explore other options with the potential impending plastic tax.

“If companies who only trade in virgin material are forced into a different commercial model that is hard for them to achieve and try to access recycled stock, it will push the price up for us and everybody, or they won’t be able to achieve it.”

Alternative routes
Robbins notes that the UK can be hard on itself regarding recycling, when in fact, it’s in the top five or six countries globally in terms of recycling rates. However, as previously noted, consumer confusion is driving the quality of recyclate in the UK down, hindering intentions to increase the amount of recycled plastic in packaging.

“Consumers aren't looking at whether the products are recyclable or not– so the whole quality is going down. Unless the public also takes it seriously, we cannot really fix it. The best recyclate in the world usually comes from continents where the labor is cheaper as then it is sorted better,” says Robbins.

Key to achieving better quality recyclate is education. The 20 million investment announced by the Government for recycling infrastructure could be invested in marketing campaigns to educate consumers, Robbins suggests.

“Plastic offers a fantastic environmental solution for fresh food and medical devices, but we make the horrible assumption that this is a plastic problem. It’s us that are the problem.”

A further move should be to increase the use of certain types of plastic that are more easily recycled. These are PET, PP and HDPE. This would also increase the levels of good quality recyclate coming out.

“These should absolutely be used more widely to make sure the recycling chain is made more streamlined and that the volume coming out of it is greater. Waste companies will want to invest in it if good quality feedstock is coming out,” he explains.

Robbins further notes that we should wait and see what will come of the proposed tax, as it is still yet to go into consultation, meaning, it is not definite. An array of different associations may be supporting the move, but a lot of thought will be required to make it work and make it fair, Robbins concludes.

By Laxmi Haigh