Plastic packaging tax

Updated 19th June 2022

About

The government implemented the Plastic Packaging Tax on 1st April 2022. It taxes producers of plastic packaging that consists of less than 30% recycled plastic.

Main points

• Rate of taxation = £200 per tonne. ⁽¹⁾
• Biodegradable and compostable plastics will incur the tax. ⁽²⁾
• Mixed packaging will be included if it is predominantly plastic by weight. ⁽¹⁾
• Exemptions:
  • Manufacturers and importers of less than 10 tonnes of plastic packaging per year. ⁽¹⁾
  • Exported goods, provided that they are exported in 12 months. ⁽²⁾
  • Licensed human medicines. ⁽²⁾
  • As transport packaging on imported goods. For example, packaging to secure safe transit of goods. ⁽²⁾
  • Recycled plastic is only used for packaging where permitted under food safety standards and other regulations.

Analysis

Would this tax be effective in reducing plastic pollution? On careful examination, this tax would seem to be unfit for purpose.

• We calculated the taxation for plastic bottles. For a 330ml bottle, there would be taxation of 0.2862p. For a 1.5l bottle, there would be taxation of 0.652p. Such scant taxation wouldn't seem to provide much incentive to use recycled plastic and could easily be passed on to consumers.
  Show the maths

  330ml bottle:

  Weight of a 330ml plastic bottle = 14.31g ⁽³⁾
  Number of 330ml plastic bottles in a tonne = 1000000/14.31 = 69881.201956674 = 69881 to 0 dp
  Taxation per 300ml plastic bottle = 200/69881.201956674 = £0.002862 = 0.2862p

  1.5l bottle:

  Weight of 1.5l bottle = 32.6g ⁽³⁾
  Number of 1.5l plastic bottles in a tonne = 1000000/32.6 = 30674.846625767 = 30675 to 0dp
  Taxation per 1.5l plastic bottle = 200/30674.846625767 = £0.00652 = 0.652p

• The government claim that this tax aims to increase the use of recycled plastic. A system of recycling plastic is not ideal (see our article on recycling and our resource, The Life of a Plastic Bottle). Recycled plastic costs more than virgin plastic. Given the lack of movement to sustainable packaging by most businesses of their own accord, it seems doubtful that they would use more than the minimum requirement of 30% recycled plastic.
• Packaging that contains less than 50% plastic by weight will not be included. Given the comparably low weight of plastic, this could potentially omit a lot packaging that contains plastic from taxation.
• Why 30% recycled plastic as a minimum? Given the amount of plastic currently wasted, why not 100% recycled plastic?
• As compostable and biodegradable plastics will also be taxed, there are no incentives to move away from plastics derived from fossil fuels. We need to keep fossil fuels in the ground if we are to meet climate targets.

Correspondence

The Swindon Advertiser published our letter on this tax.

We wrote to both local MPs who passed on correspondence to the relevant government minister:

• Correspondence with Justin Tomlinson

9th June 2021

Dear Justin Tomlinson,

I am writing to you on behalf of the Plastic Free Swindon campaign about the proposed plastic packaging tax due to come into effect in April 2022. There are several problems with it, which call into account its efficacy:

• Why legislate for plastic packaging to contain at least 30% recycled plastic? Why not 100%? We need action urgently on all forms of fossil fuel pollution.
• Recycled plastic costs more than virgin plastic. So for businesses who are looking to maximise profits, why would they use more than 30% recycled plastic packaging? The state of our environment clearly evidences that the market does not self-regulate and that environmental concerns came behind profit.
• The legislation defines plastic packaging as "packaging that is predominantly plastic by weight". What problems may arise out of the use of mixed packaging? Will some mixed packaging containing plastic not be considered as plastic packaging? If so,how will that be covered by the legislation and what steps will be taken to reduce it as it is notoriously difficult to recycle?
• The legislation mentions that "if all the tax is passed on to individual consumers, the cost to consumers will be small as plastic packaging usually makes up a very small amount of the total cost of goods". So what then would the incentive be to reduce plastic production if neither consumer of business were adequately affected to make change? This legislation would then seem to be a way to make money only.

We urgently need strong legislation rather than such weak measures. We have written to you many times about the clear case to do so. Without any guarantees from both of Swindon’s MPs that trade deals won’t hinder our ability to deal with plastic pollution, we are deeply concerned by the government’s ineffectual offering thus far.

I look forward to your response to the points raised.

Yours sincerely,

Helen H
Plastic Free Swindon

9th June 2021

Hi Helen,

I actually think you have raised a very fair point here. I am surprised we aren’t mandating for plastic bags (which we are taxing) to be 100% recycled materials (presuming that is possible). I will write to the Minister with your points to offer my support.

Kind regards,

Justin Tomlinson MP

8th October 2021

Dear Helen,

Further to your correspondence with Justin regarding plastics, we now have the attached update from the Minister.

I hope this update proves helpful.

Best wishes,

Kassim Qureshi
Office of Justin Tomlinson MP

Here is that letter from Helen Whately MP:

8th October 2021

Dear Justin,

Thank you for your email of 10 June to the Department for Business, Energy and Industrial Strategy enclosing correspondence from your constituent, Helen [personal info], regarding the Plastic Packaging Tax. Your letter has been passed to the Treasury and I am replying as the Minister responsible for this policy area. Please accept my apology for the delay in responding to you.

A £200 per tonne rate for plastic packaging that does not contain at least 30% recycled material will provide a clear economic incentive for businesses to use more recycled plastic in the production of packaging.

The Government believes that setting the threshold for the level of recycled plastic in plastic packaging at 30% is ambitious, reflecting the pressing need to act on this issue whilst ensuring it is achievable in the foreseeable future for many types of packaging.

The Government expects the tax to create greater demand for recycled material and in turn stimulate increased levels of recycling and collection of all plastic waste. Since the announcement of the tax at Budget 2018, we are already seeing increased investment in the UK’s recycling capacity, partly due to the tax. An increase in capacity alongside technical advancements should lead to an increased supply of recycled materials over time, which may lower the cost of recycled plastic and encourage more businesses to increase the level of recycled content in their packaging beyond 30%, where it is feasible to do so.

The Government will keep the level of the rate and threshold under review to ensure that the tax remains effective in increasing the use of recycled plastic.

Mixed multi-material packaging that is ‘predominantly plastic by weight’ will be classified as plastic packaging and will be subject to the tax. Some responses to earlier consultations suggested that the tax should include all packaging which contains any plastic, to discourage businesses shifting to difficult to recycle multi-material packaging.

However, the Government is confident that the reformed producer responsibility system for packaging will complement the Plastic Packaging Tax and discourage the manufacture of difficult to recycle multi material packaging. These reforms will incentivise businesses to design and use packaging that can be recycled and discourage packaging that cannot be or is difficult to manage when it becomes waste.

As noted by Helen, while some businesses may be in a position to choose to pass the cost of the tax on to consumers, the Government expects the impact on consumers to be negligible. This is because the tax targets businesses who manufacture and import plastic packaging, in many cases making using recycled content the most cost-effective option for these businesses. In addition to the economic incentive, some businesses have started reformulating packaging to increase the recycled content for marketing purposes, with many signing up to the UK Plastics Pact which has a target of 30% average recycled content by 2025.

Please pass on my thanks to Helen for taking the trouble to make us aware of these concerns.

Yours sincerely,

Helen Whately MP
Exchequer Secretary to the Treasury

A reply is being composed...

• Correspondence with Robert Buckland

9th June 2021

Dear Robert Buckland,

I am writing to you about the proposed plastic packaging tax due to come into effect in April 2022. There are several problems with it, which call into account its efficacy:

• Why legislate for plastic packaging to contain at least 30% recycled plastic? Why not 100%?
• Recycled plastic costs more than virgin plastic. So for businesses who are looking to maximise profits, why would they use more than 30% recycled plastic packaging? The state of our environment clearly evidences that the market does not self-regulate and that environmental concerns came behind profit.
• The legislation defines plastic packaging as "packaging that is predominantly plastic by weight". What problems may arise out of the use of mixed packaging? Will some mixed packaging containing plastic not be considered as plastic packaging?
• The legislation mentions that "if all the tax is passed on to individual consumers, the cost to consumers will be small as plastic packaging usually makes up a very small amount of the total cost of goods". So what then would the incentive be to reduce plastic production if neither consumer of business were adequately affected to make change? This legislation would then seem to be a way to make money only.

We urgently need strong legislation rather than such weak measures. We have written to you many times about the clear case to do so. Without any guarantees from both of Swindon’s MPs that trade deals won’t hinder our ability to deal with plastic pollution, we are deeply concerned by the government’s ineffectual offering thus far.

I look forward to your response to the points raised.

Yours sincerely,

Ben Bell
Co-ordinator, Plastic Free Swindon

14th June 2021

Dear Ben,

Many thanks for your questions about the proposed plastic packaging tax.

I will pass these onto my Government colleagues in the Department for Environment, Food & Rural Affairs and ask them to provide me with a substantive response.

As I am sure you appreciate from our previous emails, due to the volume of correspondence each Department is receiving at the moment, it is taking considerably longer for replies to be sent out. But I will of course share it with you once it has been received.

Yours sincerely,

Robert Buckland MP

14th June 2021

Hi Robert,

Thanks, we will await your response.

Ben Bell
Co-ordinator, Plastic Free Swindon

30th September 2021

Good evening Ben,

I hope that all is well with you.

I apologise for the delay, but I have now received a response from Helen Whately MP, the Exchequer Secretary to the Treasury in relation to your correspondence with me about the plastic packaging tax.

A copy of the response has been attached to this email for your information.

Yours sincerely,

Robert Buckland MP

Here is that letter from Helen Whately MP:

30th September 2021

Dear Robert,

Thank you for your email of 14 June to the Department for Environment, Food and Rural Affairs enclosing correspondence from your constituent, Mr Ben Bell of Plastic Free Swindon, about the Plastic Packaging Tax. Your email has been passed to the Treasury and I am replying as the Minister responsible for this policy area. Please accept my apology for the delay in responding to you.

A £200 per tonne rate for plastic packaging that does not contain at least 30% recycled material will provide a clear economic incentive for businesses to use more recycled plastic in the production of packaging.

The Government believes that setting the threshold for the level of recycled plastic in plastic packaging at 30% is ambitious, reflecting the pressing need to act on this issue whilst ensuring it is achievable in the foreseeable future for many types of packaging.

The Government expects the tax to create greater demand for recycled material and in turn stimulate increased levels of recycling and collection of all plastic waste. Since the announcement of the tax at Budget 2018, we are already seeing increased investment in the UK’s recycling capacity, partly due to the tax. An increase in capacity alongside technical advancements should lead to an increased supply of recycled materials over time, which may lower the cost of recycled plastic and encourage more businesses to increase the level of recycled content in their packaging beyond 30%, where it is feasible to do so.

The Government will keep the level of the rate and threshold under review to ensure that the tax remains effective in increasing the use of recycled plastic.

Mixed multi-material packaging that is ‘predominantly plastic by weight’ will be classified as plastic packaging and will be subject to the tax. Some responses to earlier consultations suggested that the tax should include all packaging which contains any plastic, to discourage businesses shifting to difficult to recycle multi-material packaging.

However, the Government is confident that the reformed producer responsibility system for packaging will complement the Plastic Packaging Tax and discourage the manufacture of difficult to recycle multi material packaging. These reforms will incentivise businesses to design and use packaging that can be recycled and discourage packaging that cannot be or is difficult to manage when it becomes waste.

As noted by Mr Bell, while some businesses may be in a position to choose to pass the cost of the tax on to consumers, the Government expects the impact on consumers to be negligible. This is because the tax targets businesses who manufacture and import plastic packaging, in many cases making using recycled content the most cost-effective option for these businesses. In addition to the economic incentive, some businesses have started reformulating packaging to increase the recycled content for marketing purposes, with many signing up to the UK Plastics Pact which has a target of 30% average recycled content by 2025.

Please pass on my thanks to Mr Bell for taking the trouble to make us aware of these concerns.

Yours sincerely,

Helen Whately MP
Exchequer Secretary to the Treasury

18th October 2021

Hi Robert,

Thanks for the reply from yourself and Helen Whately MP.

We worked out the taxation using a couple of different plastic bottle sizes. Taxation on each 330ml bottle would be 0.2862p. Taxation on each 1.5l bottle would be 0.652p. So it would seem that this tax could easily be passed onto the consumer. That's not encouraging for plastic reduction. Even if the 30% recycled plastic content was achieved, the bar is set too low to be effective at stemming plastic pollution, especially considering the current situation.

So this tax seems unfit for purpose. The government have bypassed strong, effective legislation (The Plastic Pollution Bill) for a range of ineffective measures, such as this tax, which would facilitate continued plastic production. That is despite clear evidence that we need to drastically reduce plastic production by moving towards reuse and the use of natural materials. The government's connection to the World Economic Forum, consisting of the oil / plastics industry and its funders, is noted.

Sincerely,

Ben Bell
Co-ordinator, Plastic Free Swindon

Awaiting response...

References

1. https://www.gov.uk/government/publications/introduction-of-plastic-packaging-tax-from-april-2022/introduction-of-plastic-packaging-tax-2021
2. https://packagingeurope.com/everything-you-need-to-know-about-the-uks-incoming-plastic-tax/
3. https://www.researchgate.net/figure/Average-and-median-weight-of-plastic-Bottles_tbl1_324151712

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