The UK Plastic Packaging Tax is now in effect – a springboard for change or is there further to go?

It’s natural then, that driving sustainability legislation would also prove to be another chance for the industry to impress. Taking effect on 1 April 2022, we are now past the UK Plastic Packaging Tax starting gate and getting an initial reading on how the legislation is – or isn’t – affecting change.  

Taking full aim at the volume of plastic waste that ends up in landfill, the UK Plastic Packaging Tax incentivises the use of recycled plastic over virgin material. The scheme charges a £200 per tonne tariff on the manufacturing and import of plastic packaging that does not contain a minimum of 30% plastic recyclate, charged on a per-component basis. The tax is intended to hack away at the inherent demand for fossil fuel-based virgin plastic and encourage a tighter closed loop economy where ultimately, less and less plastic ends up incinerated or in landfill.  

However, a number of important questions remain unanswered. With the rising cost of recyclate – particularly in the face of potential shortages and inflation, does a £200/tonne cost provide enough motivation for packaging businesses to eschew virgin plastics? If it’s not, in the grand scheme of packaging sustainability, will UK PPT even move the needle?  

In addition, if an estimated 20,000 companies are liable for the tax as estimated before its introduction, why have less than 2,500 businesses registered and started submission so far? 

Under present market conditions, it may well be that for businesses that are already stretching their resources to the limit, a levy of £200 per tonne is preferable and possibly cheaper than sourcing and procuring recyclate, particularly in the high volumes required in today’s bulk markets. To this end, it may be more beneficial to look at easing cost pressure in plastic recycling as a starting point, as well as finding ways to increase the availability and accessibility of recyclate.  

Of course, we are only in the very early stages of the scheme and there will invariably be challenges to iron out. We saw this previously with confusion and mixed messaging over the scope of what would, and would not, be subject to the tax. There were initial problems with how ‘packaging’ was defined, although following guideline revisions, this appears now to be clarified.  

With regards to the low number of businesses registering for the tax, within the first month of its inception only the largest businesses were mandated to sign up, but numbers have remained low. Over the coming year, we can expect to see the number swell, although how quickly this happens remains to be seen. The gathering of evidence required for the UK PPT can prove to be particularly burdensome, especially at a time when resources are stretched, and costs are rising across the board.  

As we move forward into 2023 and what many businesses are considering ‘a new dawn of packaging sustainability’, all eyes should be on the success of the UK Plastic Packaging Tax. If we are serious about creating a more sustainable long-term future for the packaging industry, circularity needs to be a top priority – but it also needs to account for the needs and current position of the packaging industry. We must see the scheme working in synergy with the industry, not against it. With today’s incredible technologies and advancements in material innovation, we look forward to seeing it unfold.