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Plastic Packaging Tax comes into force.

This month marks the introduction of the new Plastic Packaging Tax (‘PPT’), which encourages greater use of recycled content in plastic packaging.  

The hope is that creating a market for recycled plastic will boost demand, encouraging recycling, reducing the amount of plastic going into landfill or incineration, and driving the development of domestic recycling technologies. 

The PPT is charged at £200 per metric tonne on plastic packaging that does not contain at least 30% recycled plastic. The tax is payable by businesses that manufacture or import 10 tonnes of plastic packaging or more per year although some packaging, such as medical packaging, is exempt from the PPT. 

The Government has said the PPT could help to divert plastics from landfill or incineration, and drive recycling technologies within the UK. However, there have been warnings from the waste sector that the tax may instead increase the export of plastic to areas where taxes are lower or the price of quality recyclable plastics is higher. 

While the tax is intended to drive changes in behaviour among retailers and packaging producers, there have also been warnings from numerous sectors that the increased costs, both of packaging materials and ensuring compliance with the new regulations, will be passed on to consumers through higher prices. 

The UK could save an estimated 2.8 million tonnes of carbon emissions every year if all plastic packaging included at least 30 per cent recycled content. Meanwhile, the Treasury expects the plastic tax will generate proceeds in the region of £700m by 2025.  

However, the proceeds of the tax are not ring fenced and will not be re-invested by the Government into improving the UK’s recycling capacity. There are also currently no plans to increase the tax in line with any form of escalator, such as with landfill tax or fuel duty.  

The UK’s Plastic Packaging Tax is the right way to start getting businesses to push sustainability up the agenda and think about their role in the wider production and supply chain. Yet it remains to be seen what the actual effect of the new law will be on producer behaviour and, ultimately, whether it goes on to spark the domestic recycling and investment boom the Government is hoping for.