Plastics packaging tax to fund waste management from 2022
The UK government this week announced that it would introduce a new tax in 2022 to discourage the use of non-recycled plastic packaging. The exact details are subject to consultation, but it is likely to apply to manufacturers or retailers, in a similar way to the soft drinks “sugar tax” introduced earlier this year.
Hammond said in his Budget: “There will be a new tax on the manufacture and import of plastic packaging which has less than 30% recycled plastic content.”
He said 2.26 million tonnes of plastic packaging were used in the UK each year, most made from new plastic because of the higher costs of recycled material.
The Treasury document made it clear that, subject to consultation, the new tax would take effect from 1 April 2022, hitting any business that produces or imports plastic packaging that does not contain at least 30% recycled content.
It said: “The tax will provide a clear economic incentive for businesses to use recycled material in the production of packaging which, in turn, will create greater demand for this material.”
Creating the new normal for plastic
The new tax, described by the Treasury as “world-leading”, will work alongside planned reforms to the packaging producer responsibility system that would encourage businesses to ensure that far more packaging can be recycled and to use more recycled plastic in their products. There will be a separate consultation on these.
Hammond also allocated £10m more for plastics research and development work and £10m for recycling innovations such as smartbins.
The Treasury said it shelved ideas for a tax on disposable plastic cups, despite the popularity of this in a public consultation last summer.
“The Government recognises this is a problem, but has concluded that a levy on all cups would not at this time be effective in encouraging widespread reuse,” it said. “Businesses are already taking steps to reduce the impact of disposable cups. The Government expects industry to go further and will return to the issue if sufficient progress is not made.”
Hammond also shunned an incineration tax, which some had expected might figure in the Budget. The Treasury said that, in the long term, the Government “wants to maximise the amount of waste sent to recycling instead of incineration and landfill”.
If this did not happen as a result of other policies, it would “consider the introduction of a tax on the incineration of waste, operating in conjunction with landfill tax, taking account of the possible impacts on local authorities”.
Ambitious 2025 targets
The commitment’s targets include:
Eliminating problematic or unnecessary plastic packaging and moving from single-use to reuse packaging models
100% of plastic packaging to be easily and safely reused, recycled, or composted by 2025
Significantly increasing the amounts of plastics reused or recycled and made into new packaging or products
Signatories include Danone, L’Oréal, Mars Incorporated, PepsiCo, The Coca-Cola Company and Unilever. Commenting on the announcement, Nestlé CEO Mark Schneider said: “This Global Commitment is a step-change we urgently need in order to move from a linear to a circular economy. We want to act and lead by example. We will do our part to ensure that none of our packaging, including plastics, ends up in the natural environment.”