What to expect from the new plastic tax

With more than five mil­lion tonnes of mate­ri­als processed every year and a com­bined turnover of £19 bil­lion, the UK is one of the top five proces­sors of plas­tics in the Euro­pean Union. But the major­i­ty of plas­tic pack­ag­ing, which account­ed for 44 per cent of the UK’s plas­tic use in 2017, is made from vir­gin rather than recy­cled plas­tic.

In March 2018, the gov­ern­ment announced it will intro­duce a plas­tic pack­ag­ing tax aimed at reduc­ing the envi­ron­men­tal impact of the two mil­lion tonnes of plas­tic pack­ag­ing used each year. Com­ing into effect from April 2022, plas­tic pack­ag­ing pro­duced in, or import­ed into the UK, which does not con­tain at least 30 per cent recy­cled plas­tic, will be sub­ject to a levy of £200 a tonne.

Giv­en that vir­gin plas­tic is esti­mat­ed to be around £500 a tonne cheap­er, the new tax is intend­ed to cre­ate an eco­nom­ic incen­tive for busi­ness­es to use recy­cled mate­r­i­al, stim­u­lat­ing demand and increas­ing rates of recy­cling col­lec­tion, shift­ing away from dam­ag­ing land­fill or incin­er­a­tion process­es.

Improving plastic waste infrastructure

Research by Impe­r­i­al Col­lege Lon­don esti­mates that if it is trans­ferred to house­holds by pack­ag­ing pro­duc­ers, the cost of the plas­tic pack­ag­ing tax would be around 16p a week per house­hold, while encour­ag­ing invest­ment in the domes­tic recy­cling infra­struc­ture and incen­tivis­ing green­er prod­uct design and resource secu­ri­ty.

“It’s a good start,” says Tim Duret, tech­nol­o­gy and organ­ics direc­tor for Veo­lia UK and Ire­land, a lead­ing recy­cling and waste man­age­ment com­pa­ny. “The plas­tic pack­ag­ing tax could be a key incen­tive. It will cre­ate a more cir­cu­lar econ­o­my and will dri­ve man­u­fac­tur­ers to more eco pack­ag­ing designs. It will also cre­ate more jobs and bet­ter infra­struc­ture in the recy­cling indus­try.”

Duret believes a “grad­ual, incre­men­tal increase” above the cur­rent tar­get­ed amount of recy­cled plas­tic pack­ag­ing should be rolled out over time, point­ing to the exam­ple of PET (poly­eth­yl­ene tereph­tha­late) plas­tic bot­tles, which can already be made entire­ly from recy­cled mate­r­i­al. But key to that growth will be invest­ment. “The UK needs bet­ter recy­cling infra­struc­ture,” he adds.

How the plastic packaging tax might impact businesses

Bar­ry Turn­er, direc­tor of the BPF Plas­tics and Flex­i­ble Pack­ag­ing Group, con­sid­ers this a major prob­lem. Unlike the rest of Europe, most coun­cils in the UK do not col­lect all plas­tic pack­ag­ing from con­sumers and busi­ness­es. As a result, Turn­er says, the UK has an under­in­vest­ed waste man­age­ment infra­struc­ture and is high­ly depen­dent on export­ing its plas­tic waste and import­ing qual­i­ty recy­clate to meet domes­tic needs.

He says to ensure the suc­cess of the plas­tic pack­ag­ing tax, whose con­sul­ta­tion con­clud­ed last month, the UK must rein­vest the income to guar­an­tee it has the capac­i­ty to col­lect and process all plas­tic. “Not all coun­cils col­lect pots and trays and very few col­lect film,” he says.

Accord­ing to Turn­er, the tax could also, due to reg­u­la­to­ry, sup­ply, qual­i­ty or func­tion­al con­straints, result in an extra cost to busi­ness of £300 mil­lion a year, giv­en that, for exam­ple, recy­cled plas­tic is banned for uses includ­ing phar­ma­ceu­ti­cal pack­ag­ing. He claims this cost applies to 26 per cent of the weight of all plas­tic pack­ag­ing in use and around 70 per cent of all the items sold by gro­cery out­lets.

“What the tax will do is pro­vide an incen­tive to use recy­cled con­tent where it is not being used; what it wont do is enable it to be used in those appli­ca­tions where reg­u­la­to­ry restric­tions pre­vent it being used,” he adds. “They should be exempt­ed.”

Reaching recycled material sustainability

Indus­try experts agree that while the plas­tic pack­ag­ing tax is like­ly to improve long-term sus­tain­abil­i­ty, man­u­fac­tur­ers will also require sig­nif­i­cant prepa­ra­tion to adjust in time. David Hard­ing Brown, chief exec­u­tive of ecoVer­i­tas, a pack­ag­ing com­pli­ance provider that has around 70 UK clients, says that com­pa­nies that don’t adapt could go to the wall as com­pli­ance costs rise.

Pack­ag­ing recov­ery note charges, the com­pli­ance fees com­pa­nies must pay towards the col­lec­tion and dis­pos­al of plas­tic pack­ag­ing waste, have risen from an aver­age of £50 a tonne in 2017 to more than £400 in 2019. How­ev­er, when these costs are mod­elled for large and mid-sized busi­ness­es, it is cal­cu­lat­ed that for every £1,000 a com­pa­ny was spend­ing on plas­tic com­pli­ance in 2017, they are now spend­ing more than £8,000.

“When you have a busi­ness that oper­ates on very small mar­gins, either the com­pa­ny will go out of busi­ness or the cost will be passed on to the con­sumer,” says Hard­ing Brown. “They need to iden­ti­fy their lia­bil­i­ties and opti­mise where pos­si­ble. There’s a storm com­ing.”

When you have a busi­ness that oper­ates on very small mar­gins, either the com­pa­ny will go out of busi­ness or the cost will be passed on to the con­sumer

Despite these caveats, it is wide­ly thought the plas­tic pack­ag­ing tax will rev­o­lu­tionise the UK’s recy­cling indus­try. “The prob­lem with recy­cled plas­tics is that vir­gin plas­tic has tend­ed to be less expen­sive,” says Dr Tere­sa Domenech, lec­tur­er in indus­tri­al ecol­o­gy at Uni­ver­si­ty Col­lege Lon­don. “But this tax should make sec­ondary plas­tics more attrac­tive.”

There is a risk that mate­ri­als oth­er than recy­cled plas­tics could be incen­tivised, accord­ing to Domenech, or that recy­cled plas­tics will be import­ed from oth­er coun­tries rather than being pro­duced in the UK. But if the cor­rect sys­tem is in place, she believes the recy­cling tar­gets could be exceed­ed. “It will take time and invest­ment to reach the tar­gets, but you could reach even high­er lev­els of recy­cled mate­r­i­al in the future,” she con­cludes.

Three companies’ plastic pledges

Coca Cola

By 2025, Coca-Cola has pledged to ensure its pack­ag­ing is 100 per cent recy­clable and that at least 50 per cent of the con­tent of its plas­tic bot­tles comes from recy­cled con­tent, with an aim to achieve 100 per cent in the future. Coca-Cola in west­ern Europe is set to reach 50 per cent recy­cled con­tent in 2023, two years ear­li­er than its stat­ed goal. The Hon­est, Glaceau Smart­wa­ter and Chaud­fontaine brands have already tran­si­tioned to 100 per cent recy­cled plas­tic. It has worked to remove all unnec­es­sary or hard-to-recy­cle plas­tic through light­weight­ing and the removal of all sec­ondary pack­ag­ing made from plas­tic.

The Co-op

The Co-op super­mar­ket chain has com­mit­ted to only using 100 per cent recy­clable plas­tic pack­ag­ing where it helps reduce food waste and extends longevi­ty. In Novem­ber 2018, the Co-op became the first UK retail­er to replace sin­gle-use plas­tic car­ri­er bags with com­postable alter­na­tives, remov­ing around 40 mil­lion sin­gle-use plas­tic bags from cir­cu­la­tion. By the end of 2021, it has pledged to make 100 per cent of its own brand pack­ag­ing easy to recy­cle, a move which will be facil­i­tat­ed by the roll­out of the UK’s largest scheme to recy­cle plas­tic film, and to use a min­i­mum of 50 per cent recy­cled plas­tic in food pack­ag­ing, bot­tles, tubs and trays.

Mat­tel

Toy man­u­fac­tur­er Mat­tel has set the goal of achiev­ing 100 per cent recy­cled, recy­clable or bio-based plas­tic mate­ri­als in its prod­ucts and pack­ag­ing by 2030. It has looked to adopt pio­neer­ing, sus­tain­able mate­ri­als such as the sug­ar­cane-based plas­tics used in its Fish­er-Price Rock-a-Stack and Baby’s First Blocks toys, which also come pack­aged in 100 per cent recy­cled or sus­tain­ably sourced mate­r­i­al. Cur­rent­ly, Mat­tel uses 25 per cent recy­cled mate­r­i­al with­in most of its plas­tic pack­ag­ing and the com­pa­ny says it is active­ly work­ing to increase this fig­ure.

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