UK government initiates Plastics Tax technical consultation ahead of 2022 launch

19 Nov 2020 --- The UK government has released draft legislation and a draft policy paper on its Plastic Packaging Tax – effective from April 2022 – for public consultation. The measure is expected to impact around 20,000 plastics packaging producers and importers.

The draft legislation is proposing a £200 (US$264) per ton tax rate for plastic packaging with less than 30 percent recycled plastic produced or imported into the UK.

The tax is designed to provide a clear economic incentive for businesses to use recycled material in plastic packaging. Creating greater demand for the material is expected to stimulate increased plastic waste recycling and collection, diverting it away from landfill or incineration.

The proposed levy exempts producers and importers of small amounts of plastic packaging, mitigating against disproportionate administrative burdens compared to the tax liability. The suggested registration threshold is 10 tons of plastic packaging produced in or imported into the UK annually.

The tax will not apply to packaging not predominantly plastic by weight.

Cellulose-based plastics
The UK government recently consulted on the tax design and implementation, using stakeholder engagement and feedback to help inform the tax design.

Creating increased recycled plastic demand is expected to stimulate waste recycling and collection.The government has now published the summary of responses and draft primary legislation for technical consultation.

Some respondents stressed biodegradable and compostable plastics should not be captured within the tax’s scope. The new draft legislation defines “plastic” as “a material consisting of a polymer, other than a cellulose-based polymer that has not been chemically modified, to which additives or other substances may have been added.”

Several respondents also pointed to challenges relating to regulatory requirements, such as food standards and their interaction with the tax. Some packaging manufacturers stressed they could not meet wider regulatory standards without their products also becoming liable to the tax.

Functional packaging
Some respondents supported the government in excluding plastic products used for longer-term storage, while others argued all plastic packaging products or containers should be included in the tax.

The government has since decided packaging “not fulfilling a packaging function until they are used by the end consumer” will be included in the tax. Further, the draft legislation proposes not excluding plastic packaging items that could also be characterized as longer-term storage items due to the difficulties in distinguishing between them and other types of packaging at the point of manufacture or import.

Consultation respondents included leading packaging suppliers Bericap UK, CCL Label, Futamura UK, Huhtamaki, Klöckner Pentaplast, Sealed Air, Smurfit Kappa, Sulapac and Taghleef Industries.

Proposed revisions
The government is now publishing draft legislation for technical consultation, setting out the key features of the tax, including:

• the £200 (US$264) per ton tax rate for packaging with less than 30 percent recycled plastic
• the registration threshold of 10 tons of plastic packaging produced in or imported into the UK per annum
• the scope of the tax by definition of the type of taxable product and recycled content
• the exemption for producers and importers of small quantities of plastic packaging
• who will be liable to pay the tax and need to register with HMRC
• how the tax will be collected, recovered and enforced
• how the tax will be relieved on exports.

Waste management support
Leading UK waste management authorities, including Veolia, the Environmental Services Association (ESA), and the National Association of Waste Disposal Officers (NAWDO), offered support for the proposed UK Plastics Tax as the initial consultation period closed.The tax is designed to provide an economic incentive for businesses to use recycled plastic packaging..

“Plastic is not the enemy – disposal or loss in the environment is, and we should set up suitable recycling schemes around the world,” Richard Kirkman, chief technology and innovation officer at Veolia UK and Ireland, tells PackagingInsights.

“There is no target group to blame. Everyone has a responsibility to adopt part of the solution. Consumers, manufacturers, local authorities and waste companies all need to do their bit in this supply chain.”

Tim Duret, technology and organics director, Veolia UK and Ireland, describes the tax as “the key the country needs to unlock the next step toward meeting its targets and becoming truly sustainable.”

Likewise, Jacob Hayler, executive director of ESA, explains the sector is “ready to push the button on significant further investment in domestic plastic recycling and reprocessing infrastructure, which will create new circular economy jobs.”

NAWDO agrees the proposed tax signifies “an important and most welcome change in approach from the government.”

By Joshua Poole