Comment: New UK tax on plastic packaging seems to be working

Abigail McGregor suggested “progress may stall if additional recycling capacity isn’t built.”

Share of UK businesses using recycled plastic in packaging rising from 31% to 44%

A new UK tax on plastic packaging already seems to be working with the amount of packaging in the UK* containing recycled plastic rising from 31% of all packaging when the tax was introduced to 44% within the first six months, says multinational law firm Pinsent Masons.

The UK Plastic Packaging tax places a £200 per tonne levy on plastic packaging with less than 30% recycled content. The objective of the tax is to encourage greater usage of recycled plastics in packaging plastic, by making non-recycled packaging more expensive.

Abigail McGregor, Legal Director at Pinsent Masons, says that the surge in business usage of recycled plastic within the first two quarters suggests that the tax has had the intended impact. However, she cautions that figures in the third and fourth quarters show the use of recycled plastic packaging level off, suggesting progress may stall if additional recycling capacity isn’t built.

Says Abigail McGregor: “The new plastic packaging tax has provided extra income for the taxman, and prompted behavioural change, encouraging UK businesses to rapidly shift to using recycled plastics.”

“Whilst a lot of companies felt that the introduction of the tax was not particularly smooth and required a lot of guidance to get right, the tax does at least seem to be working.”

“There is a risk that demand from businesses on plastic packaging producers to include increasingly more recyclables will soon outstrip the supply of these materials. Building greater capacity for recycling is imperative.”

There is a shortfall in the current UK’s forecast domestic capacity for recycling plastic packaging, which currently stands at just 700,000 tonnes a year, representing approximately just 20% of the nation’s estimated annual 3.5 million tonnes of plastic packaging waste.

A total of 4,140 companies paid the Plastic Packaging tax over a twelve-month period.

* Produced by businesses that manufacture or import 10 tonnes or more of plastic packaging within a 12-month period