Industry welcomes ‘game-changing’ plastics tax

Following yesterday’s (11 March) Budget 2020 announcement, industry stakeholders have welcomed the confirmation of the Plastics Packaging Tax, though doubts remain over the practicalities of implementing such a policy.

An image of the HM Treasury building

Unveiling his first spending plan, newly-appointed Chancellor Rishi Sunak announced that a tax of £200 per tonne will be placed on all domestically-manufactured or imported packaging containing less than 30 per cent recycled content from April 2022 – a measure originally proposed in the Treasury’s 2018 Autumn Statement.

Sunak has launched a further consultation on the detailed design and implementation of the tax, after the first consultation attracted an unprecedented number of public responses.


The waste and resources industry has largely shown approval for the tax proposal, with Recycling Association Chief Executive Simon Ellin describing the policy as a “game-changer” that will stimulate the use of recycled plastic and boost the development of plastic recycling infrastructure in the UK.

Individual waste management companies have also lauded the announcement, with John Scanlon, CEO of SUEZ recycling and recovery UK, arguing that the Budget demonstrates that the government is “serious about delivering a circular economy”, while Viridor Managing Director Phil Piddington claimed that the move will “unlock the crucial investment in recycling infrastructure”.

Scanlon continued: “The initial £200 per tonne rate applied will help redress the imbalance between the cost of virgin material and the cost of equivalent recycled options. The Budget has also set the direction of travel, leaving the door open for future increases in the tax, making clear the scale of its future ambition whilst giving time for systems to change and adapt.”

Sian Sutherland, Co-founder of plastic pollution campaign group A Plastic Planet, said: “We’ve lobbied Whitehall for years for a tax on plastic packaging and we’re delighted to see the Chancellor backing our calls.

“The government now has an opportunity to position the UK as a world leader in tackling the plastic crisis. We strongly urge them to seize it with both hands.”

Filled packaging

With the government announcing that the scope of the tax will extend to the importation of filled plastic packaging, Pat Jennings, Head of Policy Knowledge and External Affairs at the Chartered Institute of Wastes Management (CIWM) commented: “On the proposals for the plastic packaging tax, which will come into force from April 2022, CIWM welcomes the confirmation that it will apply to both domestic manufacturers and importers and will include filled packaging.

“This should ensure that UK manufacturers are not disadvantaged and that the tax does not incentivise the offshoring of filling operations to avoid the tax.”

Robbie Staniforth, Head of Policy at Ecosurety – a compliance scheme that helps packaging producers fulfil their obligations under the Packaging Recovery Note (PRN) system – was equally pleased to hear that the government has amended its original plan to extend the tax to filled plastic packaging: “It looks like HM Treasury have got a handle on the key failings of their previous proposal. We’re glad to see they have recognised our, and any others’ point, that excluding imported filled packaging from the tax could have led to packaging production being offshored.”

“The devil will be in the detail”

While the tax has been largely welcomed, industry figures have called for further clarity on the details of the policy, with Jennings explaining that CIWM has “raised questions about the appropriateness of a fixed tax to change behaviour in a market that is heavily dictated by global oil price fluctuations.”

Calling for the tax to be reviewed at appropriate intervals, Jennings said: “As always, the devil will be in the detail and it is important to understand how the tax will impact on different polymer types to reduce the risk of market distortion and unintended consequences.

“Policing of the tax, particularly around imports, was also an area of concern in the original consultation and CIWM welcomes further detail on this in the second consultation launched today.”

Likewise, Staniforth stressed that “there is a lot of work to be done” before the tax is ready to be launched, explaining that Ecosurety is “looking forward to digging into the detail in the coming months.”

The British Plastics Federation (BPF) said: “Questions remain regarding whether the tax will apply to packaging that cannot incorporate recycled content due to existing legislation. We look forward to working with the government during the upcoming consultation to address these matters.”

Calling on the government to invest in domestic recycling infrastructure, BPF said that it “hopes that the money raised by this tax is invested appropriately and where it is badly needed: in upgrading the UK’s recycling infrastructure. In the interim, our recycling infrastructure could be improved via reforms to the existing PRN system, which the industry has been requesting for many years.”

Jacob Hayler, Executive Director of the Environmental Services Association (ESA), has argued that while the tax will have a positive impact on UK recycling infrastructure, the policy must be accompanied by additional measures – Hayler described the tax as “a starting point” which must “go hand-in-hand with other measures to stimulate local markets for recycled content and discourage manufacturers from using complex, wasteful packaging that cannot be reused or recycled.”


Several aspects of the Budget have been met with disapproval from the waste sector, with Staniforth commenting: “We are disappointed that packaging recycling targets were not included in the announcement made today. Not having foresight of recycling targets for 2021 and 2022 further exacerbates the issues with the current system.

“The government proposed steep increases in their consultation last year, which would have effectively been unachievable without exporting even more waste in the hope it is recycled, or significant investment in the UK. The sooner we get clarity on these targets, the sooner we can start planning how we achieve their ambition.”

Moreover, Hayler has raised concerns with the government’s commitment to lift tax relief for red diesel – which is used by many waste and recycling operators to power heavy machinery –  explaining that this will be a “major blow for the recycling and waste management sector, which relies on diesel fuels to keep vital public facilities, like recycling centres and waste transfer stations, running efficiently.”


Meanwhile, the Chancellor has also outlined the government’s plans to extend the Renewable Heat Incentive (RHI) – an initiative to boost the uptake of renewable and low-carbon heating – until 31 March 2022.

This announcement has come as welcome news for the anaerobic digestion (AD) sector, which uses food waste to produce biomethane for the gas grid, though key stakeholders called for more ambitious action to support the industry in fulfilling its potential.

Dr Nina Skorupska CBE, Chief Executive of the Renewable Energy Association (REA) said: “This budget provides some welcome fiscal support for the renewable energy and clean technology; there are clear steps in the right direction especially around extension of the domestic RHI, Carbon Capture and Storage, decarbonising transport and R&D funding. This budget, however, does not make the strides needed to fully unleash the potential of the sector and pave the way to net-zero.”

Charlotte Morton, Chief Executive of the Anaerobic Digestion and Bioresources Association (ADBA), added: “As our recent report ‘Biomethane: The Pathway to 2030’ demonstrated, there is no net-zero without biogas. Whilst it is good news that there is commitment to support biomethane injection into the gas grid post-March 2021, the government’s ambition to see a tripling of the current level of production by 2030 is only around 38 per cent of the AD industry’s potential. 

“In the year the UK hosts COP26, we encourage the government to treble its ambition so that our industry is able to fully support the decarbonisation of agriculture, heat, transport and waste management to reduce total UK emissions by six per cent whilst also creating 30,000 new green jobs throughout the UK by 2030, and we look forward to continuing to work with Government to this end.”

You can read the Budget 2020 in full on the government website.

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