OPINION – Two years in, is the Plastic Packaging Tax working?

“Misguided” or not “meaningful” enough? Now two years in, the Plastic Packaging Tax has divided campaigners and business leaders on whether it is effective for both the environment and businesses.

The Plastic Packaging Tax was introduced in April 2022, in a bid to incentivise the use of recycled plastics, increase demand for plastic recycling, and prevent up to 200,000t of CO2 emissions a year. Any plastic packaging produced in or imported into the UK containing less than 30% recycled content is now subject to a levy of £210 per tonne (applicable to businesses using more than 10 tonnes of plastic packaging per year). The tax rose from £200pt to £210pt in April 2023, before rising again to £217pt in April 2024.

However, the tax appears to have been met with resistance right across the divide – from some calling for it to go further, to others suggesting it be scrapped entirely.

Campaign group A Plastic Planet has called for the scheme to be made more “meaningful”. The group wrote directly to the Chancellor calling for the levy to be raised to £400 per tonne and the threshold for recycled content to be raised to 50%. This, it says, would deter businesses from continuing to use virgin plastic, as Packaging News reported.

But some business leaders believe the tax has been misguided or would be better scrapped and revisited with a clearer focus. Some businesses are so frustrated with the Plastic Packaging Tax, they have taken stances that threaten to wipe out the positive safety and environmental implications of the scheme.

Findings from 2023 showed that the tax has raised close to 15% more for the public purse than HMRC had forecasted. Around £200m of tax revenue was paid in its first 9 months, as businesses pay the levy for using virgin plastic packaging products.

It’s our view that far from operating irresponsibly, many of the businesses paying the tax will be seeing that using virgin product and paying the tax is still the best option for product safety, the environment and their bottom line.

Robert McEwan, Managing Director of MorsaPack, explains: “All packaging exists to perform a function – primarily, to protect products, in some way. Whether its for commercial or consumer use packaging protection is vital not only for products, but people too. As such, we always place priority on safety. Second to that, we seek to focus on limiting environmental harm, followed by carefully managing costs.

“I would confidently bet that many of the businesses paying, seemingly, ‘over the odds’ on the plastic tax are prioritising the safety of their products, over the overall costs – even when factoring in the £217pt Plastic Packaging Tax.

“At the recent EUMOS Conference we heard a good example of this. A business was using virgin plastic in its pallet wrap. To achieve the product security required under EUMOS 40509 protocols, they needed 167gr of wrap, which costs €0.45 per pallet and generates around 418gr of CO2. Under the Plastic Packaging Tax, the business ‘needed’ to switch to recycled content. However, to achieve the product security required, needed 264gr of film – which would still contain around 184gr of virgin content… This also cost them 68c per pallet and generated 655gr of CO2. So, this business used 10% more virgin plastic, generated 56% more CO2 emissions and spent 58% more overall. No-one is better off in this scenario. And it’s a scenario we’ve seen again and again in the last 12 months.

Our priorities for packaging:

  1. Safety
  2. Environment
  3. Cost

“One of our specialisms at MorsaPack is pallet stability. For this area of packaging and logistics, safety is paramount. Compromising on the pallet wrap product will either compromise safety or, as the example above demonstrates, deliver worse environmental outcomes, just to tick a box. There has to be some nuance and flexibility applied for businesses, along with a wider acceptance or understanding that ‘plastic does not = bad’.

“We appreciate there are other plastic products that the aims of the Plastic Packaging Tax are absolutely right for. Limiting the production of single-use plastic products and finding more sustainable alternatives is the right approach.  But we agree with the many other businesses calling for more nuance to be given to the products subject to the tax.”

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