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UK outlines details of plastic packaging tax amid waste system overhaul

The UK government has launched a series of consultations into a wide-ranging overhaul of the waste and recycling system, including details of its proposed tax on plastic packaging.21 Feb 2019

The consultations follow on from the Resources and Waste Strategy published in December, and give more detail on areas including plans to make packaging producers pay the full cost of dealing with their waste, to introduce a consistent set of materials collected across England from households for recycling, and to bring in a Deposit Return Scheme (DRS) for cans and bottles.

The changes will eventually form a large part of the planning Environment Bill, which will be introduced into Parliament after Easter.

Under the proposals, the plastic packaging tax will apply to all plastic packaging with less than 30% recycled content which is manufactured in the UK, as well as unfilled packaging imported into the country.

In situations where there is only one manufacturer the tax would apply when the product or component is made available for use or onward sale. The government is seeking views on what happens when multiple manufacturers are involved.

Unfilled packaging would be taxed when it is placed on the UK market as packaging or packaging material used to make packaging. Unfilled packaging which is exported will not be subject to the tax.

The packaging tax consultation (51 page / 439KB PDF) defines products proposed to fall into scope, asks about the threshold for recycled content, when the tax would be charged, the applicable rates and who would have to pay it, and raises the issue of minimising administrative burdens for companies.

The government has also proposed handing the full cost of recycling to the producers of plastic packaging waste through an extended packaging waste producer responsibility system (125-page / 2.1MB PDF). This should also incentivise the use of less packaging and making more of it easier to recycle.

Following the proposed overhaul of the packaging regulations, the government has said it will explore extended producer responsibility schemes for other items that can be harder or costly to recycle. It said it would improve existing schemes for cars, electrical goods and batteries, and extend the list to items such as textiles, fishing gear, vehicle tyres, certain materials from construction and demolition, and bulky waste such as mattresses, furniture and carpets.

Waste expert James Nierinck of Pinsent Masons, the law firm behind Out-Law.com, said: “The government has issued four complementary consultations, which together seek to radically alter our relationship with packaging waste and drinks containers, in particular plastics. The consultations take a lifecycle approach, seeking to influence the design, labelling, manufacture and recycling of packaging."

"There are commercial, technical and legal issues with each of the proposed reforms. There are complex issues surrounding the scope of plastics within the tax; the tax point; relevant threshold for recycled plastic content; imported packaging materials, and how in practice businesses can prove that the prescribed recycled content has been met," he said.

“With respect to the Deposit Return Scheme, the DRS consultation raises key issues in relation to the scope of the scheme, its management and how and where returns will be able to be made by consumers. As the DRS is established, it will alter the flow of recyclates, which in turn will alter the financial flows. For example a DRS is likely to move higher-value recyclables away from pre-segregated local authority collections, which will, unless mitigated through the scheme, reduce local authority’s recyclate income," said Nierinck.

“Overall, the consultations will affect a broad base of businesses, local authorities, waste management companies, reprocesses and manufacturers, and consumers. The next 12 weeks offers stakeholders the opportunity a chance to reflect on how these proposals will impact their businesses and operations, and influence government as it refines these proposals," he said.

The other consultations launched include proposals to introduce a consistent set of recyclable materials (65 page / 1MB) for collection across England. The government is, alongside this,suggesting a food waste collection service for all households.

There is also a consultation on a DRS (69 page / 2.7MB PDF) for cans and plastic and glass bottles. The government is proposing two options: an ‘all-in’ model which would target a wide range of containers used for drinks; and an ‘on-the-go’ model restricting containers to those under 750 millilitres in size. The on-the-go model would cost around a third of the all-in model, according to the government’s cost estimates.

The DRS would require the establishment of a new not-for-profit Deposit Management Organisation to run the scheme. Containers could be returned through automated return points or over the counters of smaller retailers, according to the proposals.

The plastic tax consultation closes on 12 May, the others close on 13 May.