September 23, 2022
What’s In A Name?
How Should Meat Substitutes Be Named? The growth of the...
Initially announced by the Treasury pre pandemic days, the Plastic Packaging Tax was hardly a bolt out of the blue when it came into force on April 1 2022. However, according to research by Veolia over three quarters of businesses remained unaware of the penalty of £200 per tonne for post-consumer recycled content (PCR) of less than 30%.
At first glance the tax looks like a great sustainable initiative but concerns have been raised about the charge inflating costs and adding to supply chain disruptions due to a shortage of recycled plastic. Less plastic could also impact on packaging’s quality and protective characteristics. On the other hand, it could lead to more innovative designs using alternative materials.
Some businesses might even be weighing up what is more cost-effective – paying the tax or investing in PCR for their packaging. Measuring their plastic footprint and the amount of plastic used could be the deciding factor.
It’s also likely that extra costs will filter downstream and eventually hit the pockets of hard-pressed consumers already grappling with the cost-of-living crisis. Shoppers impacted by green initiatives is nothing new – the charge on single use plastic bags and discounts offered for reusable coffee cups spring to mind.
Then there is the question of where the extra revenue will go when it’s collected by HMRC. Unlike the National Insurance hike which has been ring-fenced for the NHS, apparently the plastic packaging tax will go into a central government pot and not towards boosting domestic recycling capacity.
The Government predicts that the introduction of the plastic packaging tax will deliver a 40% rise in recycled plastic being used in 2022/23, diverting plastics from landfill or incineration while boosting recycling technology. But who will police it to ensure compliance? And what about materials that come into contact with food?
Food manufacturers are arguing that the tax is too strict and would like to see more exclusions. The flip side is environmental groups believe it’s not taxing enough and the penalties will not incentivise a shift away from virgin plastic.
Currently there are four categories of packaging exempt from the tax:
Should food packaging unable to have recycled content (flexible packaging and lidding films on ready meals, plastic soup containers etc) be on the exemption list? Should an outer wrap also be taxed despite not being part of the resaleable item? If plastics can only be recycled a number of times, how best to separate out virgin plastic?
Plastic packaging protects food in transit and extends shelve life preventing food from going to waste. We need to consider these environmental benefits before turning off the plastic tap. Alternatively, we don’t want see our oceans and natural ecosystems blighted by single use plastic waste. Allotts believes further Investment in the UK’s plastic recycling infrastructure is needed to help create a world leading circular plastics economy which could achieve the best environmental outcome.
Some of the major players in the food industry have already moved to 30+ percent recycled plastic packaging to meet the material requirements. If the long-term aim is to keep plastic packaging as long as possible in a circular loop system to significantly reduce the amount of virgin plastic, then more investment is needed for developing material for recyclability.
As mentioned earlier some fear the plastic packaging tax could affect the quality of packaging to keep costs down, but there are opportunities for brands to rethink their requirements, opening the way for more innovative eco-friendly packaging designs.
April could have seen another major change with high-street retailers next in line due to government legislation for ‘unhealthy products’. HFSS (high in fat, salt and sugar) restrictions for media and in-store promotion of these foods were initially scheduled for April but the deadline has been extended to October 2022. Just thought we’d let you know!