RECOUP Calls for a more Effective Plastic Packaging Tax

Plastics resource efficiency and recycling charity, RECOUP, has called for a more effective Plastic Packaging Tax in its new position statement.

As of April 2024, the tax is applied at a cost of £217.85 per tonne for plastic packaging placed on the UK market that is not claimed to contain 30% recycled content. However, there have been a number of issues identified during the two years the tax has been in place.

An unintended consequence of the Plastic Packaging Tax is happening right now.

The Plastic Packaging Tax was set up as an ‘environmental tax’, but there have been many examples of where packaging claims to meet 30% recycled content to avoid paying the tax – with some examples either not being technically possible or cleverly using the term ‘pre-consumer’ material that might not actually have any recycled content at all.

Simply put, claims of recycled content is not being sufficiently verified or enforced, particularly for packaging (filled and unfilled) that is imported into the UK.

Calls for the cost or 30% percentage of the tax are not sufficient to incentivise use of recycled content, but if these increase without proper enforcement, false claims of recycled content will inevitably also increase, and UK recyclers could further struggle in already acutely challenging commercial conditions.

Steve Morgan, Head of Policy & Infrastructure at RECOUP said: “An incentive to include recycled content, even if it has to be a tax, is a force for good as long as it’s properly enforced. However, the UK imports around half the plastic packaging it places onto the market, and this includes packaging with claims of recycled content.

“Lack of enforcement is increasingly making the UK recyclers commercially unviable due to having to compete with cheap imports of virgin packaging and packaging with recycled content from countries with significantly lower cost base and greater access to material.

If these false claims, particularly from imported material continue, we could see a collapse of the plastic packaging recycling system in the UK as we know it, and urgent action is needed.”

Lack of enforcement also means HMRC are losing revenue for an unknown quantity of packaging that does not contain 30% recycled content. That revenue, of course, is leaving our recycling systems, and an opportunity remains to align with packaging EPR and include recycled content as part of the eco-modulation framework, and thus incorporating a more holistic environmental impact of the packaging. Revenue like this for including recycled content, if ring fenced for the reprocessing sector, would provide game changing technical strengthening and ultimately commercial transformation for UK plastic packaging recyclers.

With packaging EPR and the Plastic Packaging Tax there are significantly increased administrative burdens on producers and users of plastic packaging. Any use of an enforcement and verification framework will have an impact on producers and users of plastic packaging and changes should ensure, as much as possible, that no avoidable burdens are placed on these businesses.

RECOUP also calls for an urgent review and overhaul of the Packaging Recovery Note (PRN) system to provide a more stable, commercially supportive and modulated PRN for plastic packaging formats where targeted funding is needed the most.

RECOUP’s new position statement, Considerations & Recommendations for a more Effective Plastic Packaging Tax can be downloaded here.