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Plastic Packaging Tax

Some 2.3 million tonnes of plastic packaging was placed on the UK market in 2019 but according to Greenpeace less than 10% of plastic household waste is actually recycled.

However, there is growing consumer, industry and government understanding of the damage single-use plastics can cause the environment. This means there are now voluntary and legislative initiatives designed to significantly reduce single-use plastics and accelerate recycling.

The UK government’s Plastic Packaging Tax – which started1st April 2022 – is the most significant measure in that. It is estimated around 20,000 packaging producers and importers will be affected.

Polytag Plastic Packaging Tax

Understanding the UK Plastic Packaging Tax

The UK Plastic Packaging Tax will applies to plastic packaging produced in, or imported to, the UK that does not contain at least 30% recycled plastic. The tax, which applies whether the packaging is filled or unfilled, will be charged at £200 per tonne of chargeable plastic packaging component.

EU member states have already introduced a similar levy as part of the Green Deal, which aims to reduce the consumption of raw materials and shift toward a circular economy. Starting in January 2021, each EU country now contributes a levy to the EU, based on the amount of non-recycled plastic packaging it produces at a rate of €800/tonne. Individual countries are now in the process of either paying the levy from national budgets or framing legislation for a plastics tax.

Who pays the Plastic Packaging Tax

The tax will impact businesses in the value chain producing, importing, and buying plastics containing less than 30% recycled materials. The government estimates that the tax will have little or no impact on individuals or households, even if businesses choose to pass it on to consumers because packaging typically makes up a small percentage of the total cost of goods.

The tax is only applicable to manufacturers and operators who place more than ten tonnes of plastic packaging on the market per year.

The Plastic Packaging Tax is liable for those who meet the below definition of ‘packaging’:

“Is a product that is designed to be suitable for use, whether alone or in combination with other products, in the containment, protection, handling, delivery or presentation of goods at any stage in the supply chain of the goods, from the producer of the goods to the consumer or user.”

Is the tax beneficial

The tax is intended to provide an economic incentive for businesses to increase their use of recycled materials in the production, importation and use of plastic packaging. In fact, the UK government estimates that the tax will yield more than £240m in its first year.

The tax is also expected to drive greater demand for recycled materials, in turn increasing the collection and recycling of plastic waste – diverting it away from landfill.

Overcoming an ethical challenge

Recently an interesting dynamic has emerged, with more brands trying to secure a supply of high quality, food-grade rPET.

While larger brands are in a position to buy vast quantities of recycled plastic to launch 100% recycled plastic bottles, smaller brands are struggling to source recycled material for their packaging needs. This is down to a lack of visibility across the plastic circular economy, which disadvantages the smaller brands that don’t have the buying power. This raises interesting questions about how the market for recycled plastic can be managed in a more equitable way, enabling brands to get their plastic quota back to be reused again.

How Polytag can help

Polytag’s Describe, Tag and Trace technology is applied to packaging during the production process. This enables businesses, governments, and consumers to understand how packaging is handled, sorted and managed ‘post-consumption’.

Polytag solutions also give visibility of ‘ownership’ of plastic, so that when it is being sorted in Material Recovery Facilities (MRF) or Plastic Recovery Facilities (PRF) there are records of how much of a particular brands plastic is being handled and sorted.

The cloud-based technology holds information such as who produced the plastic, when and where the packaging was produced and the percentage of recycled materials it includes.

Once disposed of, Polytagged packaging is scanned at the Materials Recovery Facility (MRF) and/or Plastics Recovery Facility (PRF), where it is ‘marked’ as recycled. The plastic is then bailed, ready to be recycled and returned to the circular economy.

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Polytag under UV light

Helping governments better monitor and enforce the tax

Data from each Polytag is held in the cloud and is openly accessible. This will be particularly useful to HMRC, the Treasury and local authorities to understand how much plastic packaging is in circulation, where it is, how much new product is made from recycled material, and how much is returned to the circular economy.

This will be particularly pertinent to the Plastics Packaging Tax, because businesses will initially ‘self-report ‘ underpinned by spot-checks, making monitoring, validation, and enforcement difficult when it comes to tax collection.

Helping brands tell their sustainability stories

Polytagged, recycled plastic will tell brands exactly how much recycled material they have purchased, allowing more accurate tax calculations.

Polytag technology can also give brands better visibility of how much of their original material is being recycled and this data can potentially be used to allocate a ‘quota’ of rPET to smaller brands who want their virgin plastic back to be reused in their own bottles.

Additionally, the full traceability also allows brands to craft CSR stories around the sustainability of their products for all stakeholders, offering a distinct USP to products in non-Polytagged packs.

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