Plastic packaging tax

The measure

To help achieve its aims to reduce excessive and environmentally harmful plastic packaging and to address the problem of single-use plastics, the government has announced three initiatives:

• The introduction of a new tax from April 2022 on the manufacture and import of plastic packaging which contains less than 30% recycled plastic
• A reform of the existing packaging producer responsibility system to further incentivise manufacturers to increase the recycling potential of their products
• An action plan to be set out in the government’s resources and waste strategy plan later in the year.

The first two initiatives will be the subject of a consultation in the near future. If they are introduced, the government plans to invest the revenues arising from the first two measures in an effort to achieve the third.

As part of the same overall strategy, it was announced that a tax on waste incineration could be introduced in the future if recycling targets appear to be in jeopardy.  

Who will be affected?

The plastics manufacturing sector appear to be the prime focus for these changes. However, the nature of the tax may to lead to increased costs for sectors that use taxed packaging.

If a waste incineration tax is introduced this will be of particular concern for local authorities who have made long term commitments to incineration solutions and made investments in energy from waste (EfW) facilities. The government have acknowledged that the impact on local authorities would need to be taken into account.

When will the measure come into effect?

The single-use plastics tax will not be introduced until 2022 and even then, only after consultation.

A tax on waste incineration appears to be even further away – the Government referring to it as a ‘long term’ initiative and dependent on lack of improvements in rates of waste recycling.