Plastic Packaging Tax

Overview

In March 2018, the government launched a call for evidence on using the tax system or charges to tackle single-use plastic waste. This received a record 162,000 responses, highlighting the strong public interest in action in this area.

Plastic packaging is typically only used for a short period of time and then disposed of, and accounts for 44% of plastic used in the UK,[1] but 67% of plastic waste.[2]

Over 2 million tonnes of plastic packaging is used in the UK each year.^[[3] The vast majority of this is made from new, rather than recycled plastic. Using new plastic typically has greater environmental impact: it requires unnecessary resource extraction and processing, with higher energy use and emissions than using recycled material. It also results in significant amounts of additional plastic waste on the market, which is generally sent to landfill or incinerated. The process of consuming recycled material drives the recycling market and helps to reduce the rate at which plastic is sent for waste treatment/disposal further down the waste hierarchy.

The government’s call for evidence highlighted that using recycled plastic is often more expensive than using new plastic, despite its lower environmental impacts. Significant variations in the price of new plastic over time can also discourage businesses from committing to using recycled plastic instead of new plastic in the long term. The government wants to encourage the sustained use of more recycled plastic in the production of plastic packaging to help tackle plastic waste. This will help to drive the treatment of plastic waste up the waste hierarchy so that more plastic is recycled rather than being sent to landfill or incineration, to improve resource productivity and make more plastic waste a useful and valued resource.

At Budget 2018, this government announced its intention to introduce a new tax on plastic packaging. The tax will apply to businesses that produce or import plastic packaging which uses insufficient recycled content, taking effect from April 2022. The tax will be set at a rate that provides a clear economic incentive for businesses to use recycled material in the production of plastic packaging, which will create greater demand for recycled plastic, and in turn stimulate increased levels of collection and recycling of plastic waste.

This tax will complement reformed Packaging Producer Responsibility regulations, discussed in this parallel consultation. The Packaging Producer Responsibility reforms will encourage businesses to design and use plastic packaging that is easier to recycle, and discourage them from creating plastic packaging which is difficult to recycle, which will increase supply of easier-to-recycle plastic. The government believes that the tax and Packaging Producer Responsibility regulations will provide business with the right incentives to recognise the impact of their plastic packaging decisions and drive the development of more sustainable packaging.

Proposals for consistent collection of waste, being consulted on in parallel to this, will help households to more easily separate recycling and set minimum standards for local authorities. This will help to increase supply of plastic waste for recycling. The government is also consulting on proposals to introduce a Deposit Return Scheme for drinks containers, which would aim to boost recycling materials and reduce the amount of littering.

What happens next