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Big step for taxing plastic packaging in the UK

A tax on plastic packaging that does have a required proportion of recycled content is due to be levied in the UK within the next two years.

Following a consultation process in 2019, the government has published draft legislation for taxing plastic packaging that does not contain at least 30% recycled plastic. The suggested rate for the Plastic Packaging Tax is £200 (EUR 220) per tonne, starting in April 2022.

However, it will be imposed only on those businesses using more than 10 tonnes of plastic packaging per annum. An estimated 20 000 producers and importers will be affected.

The tax will apply to packaging produced both in the UK and imported. An earlier suggestion that filled imported packaging should be exempt has been dropped but exemptions for medicine packaging, ‘unmodified’ cellulose, and packaging used in the transport of imports and exports are reported.

The intention is to give businesses a financial incentive to use recycled material in the production of their plastic packaging, stimulating more recycling and higher collections of plastic waste.
The formal announcement states: ‘It is anticipated that as a result of the tax there will be a significant increase in the amount of plastic packaging with greater than 30% recycled plastic. Recycled plastic has a carbon footprint than can be up to four times lower than that of virgin plastic. The policy may also help to divert plastics from landfill or incineration, and drive recycling technologies within the UK.’

It has been estimated that plastic packaging accounts for 44% of plastic used in the UK but 67% of plastic waste. More than 2m tonnes of plastic packaging is used each year, mostly from virgin plastic.

The Treasury does believe there will be a significant cost to consumers. ‘It is expected that if all the tax is passed on to individual consumers, the cost … will be small as plastic packaging usually makes up a very small amount of the total cost of goods. On this basis we expect customer experience to stay broadly the same.’

It estimates that the tax will generate revenue of £240 million in the first year, dropping to £220 million by 2025. It expects to spend nearly £18 million on IT and staff costs to establish the system.

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