New UK government budget offers no change in needed support for plastics R&D, says Aquapack Polymers CEO

27 Mar 2023 --- UK Chancellor Jeremy Hunt presented his Spring Budget just under two weeks ago, laying out tax and spending policies for the year ahead. While R&D is being heavily incentivized in the budget, key industries – such as Britain’s plastic sector – have not been prioritized despite playing a major role in the country’s economy and environmental sustainability ambitions.

The plastics sector is the second biggest industrial employer in the UK, according to the British Plastics Federation (BPF). It has an annual sales turnover of over £27 billion (US$33 billion) and employs approximately 182,000.

There are roughly 6,200 firms engaged in the UK plastics industry, of which about 5,200 are defined as manufacturers of plastics products. Due to the role plastics play in the UK manufacturing supply chain, it is also a large indirect employer – for every job created, a total of 2.74 are created in the wider economy, according to BPF.

PackagingInsights speaks to Mark Lapping, CEO of Aquapak Polymers, about the ramifications of Hunt’s Spring Budget for the industry for his company and the plastics industry at large.

“It certainly doesn't change anything for the plastics sector or the need to pair up research institutions and universities with industry. It was great to hear the government focus in general on those incentives but they were focussed on a core set of industries based around pharmaceuticals and tech and lifestyle.”

“We [Aquapack] already work with nine UK universities, and there is so much going on there that if you could create an aligned structure around these clusters between research and business, it would be a great opportunity.”

Mark Lapping, CEO of Aquapak Polymers.“We’ve had to do this with no public money or government support.”

Disproportionate focus, lack in collection
Innova Market Insights listed plastics circularity as its top trend for 2023, noting that 61% of global consumers believe the increased use of plastic packaging is necessary – although perhaps undesirable – since the COVID-19 pandemic for safety reasons.

“The main focus for governments and the industry should be on delivering recycle-by-design packaging and recycling systems that can help reestablish plastic within a circular economy,” says the global markets researcher.

However, with the shift to fiber-based packaging and other forms of renewable materials rapidly replacing many plastics applications, Lapping says the government’s focus on other industry areas is understandable.

“It’s not something politicians will want to get themselves aligned with, whereas AI, pharmaceuticals and so on are – and that is for good, sound economic reasons but at the same time, plastics is a massive employer and does a really important and ubiquitous job in the UK because it's something we use every day.”

“We just have to make the product circular. We can’t get perfection overnight but you can certainly make things better where the collection is working. All the technology exists to do that and government policy is muddled in this area,” he continues.

“Also, there is an absolute desire by consumers and businesses to create more circularity but the infrastructure has to be made right and the government needs to get on with it. They’re doing it for other industries like AI but not for plastics. Why are there different collection systems in Bradford or Barnet? Let’s sort it out.”

Tax credits and harmonization
Circularizing the plastics economy is an essential and lucrative area for government investment, Lapping says.Improving collection systems in England should raise recycling rates, according to industry experts. This has been approved by the government for implementation through the UK Environment Act but will take time to set into action. In Wales, where a standardized collection scheme runs throughout the nation, recycling rates are some of the highest on earth.

“Harmonization is going to take a long time. That shouldn’t stop private companies designing separable products and sortation technologies,” asserts Lapping.

Under the new rules, companies spending more than 40% on R&D will get 20% back.

“That helps Aquapak, but generally, it doesn't help the manufacturing of some industries and it's created confusion about what they’re trying to do here for the plastics industry,” he says.

“In terms of sustainability, there isn’t much alignment policy with the big goals and how it's going to be achieved. Businesses are on their own and there isn’t much government incentive.”

“Again, there is a lack of policy. Environmental agenda isn’t just about doing the right thing, which it clearly is, but it’s also a value proposition for public companies, for which they’re missing out.”

Boosting investments in R&D for the plastics sector is essential for the UK to compete on the world stage, particularly post-Brexit, says Lapping.

“Now, more than ever, we need an infrastructure to support the scaling of world-leading products to help us compete on the global stage across many sectors. We need a joined-up model which links UK research and innovation with research institutes, businesses and universities to create an environment that simplifies and expedites the development of exciting and game-changing products” he says.

Lapping points to the success of Silicon Valley in the US, which has become a leader in tech innovation. Similarly, the Fraunhofer institute in Germany operates 76 institutes and research units throughout Germany to prioritize key future-relevant technologies and commercialize them through business and industry.

“Here in the UK, the Nonwovens Innovation & Research Institute (NIRI) in Leeds is the closest we have to the much-needed research institute from which to build this model. It supported Aquapak Polymers in the R&D of Hydropol for use in fiber and non-wovens.”

However, we still had to go overseas to Germany and the US to find partners to support the scaling and commercialization of the end product. There’s potential to build on the NIRI approach and form the basis of a new structure for innovation in the future.

By Louis Gore-Langton

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