The UK Government’s proposes to introduce, from April 2022, a world-leading new tax on the production and import of plastic packaging with less than 30% recycled content.

 In July 2019, HM Treasury published the government response to its February 2019 consultation on a plastic packaging tax, which sets out its approach and areas where further work is required. The government will set out the next steps at Budget 2019 in Autumn 2019.  HMRC will publish a technical consultation on the detail of the tax design later and publish draft legislation for consultation in 2020

Plastic packaging is typically only used for a short period of time and then disposed of. It accounts for 44% of plastic used in the UK, but 67% of plastic waste. The government’s aim in introducing the tax is to encourage businesses to ensure that far more packaging can be recycled and to use more recycled plastic in their packaging. Recycled plastic packaging is currently more expensive to produce. This proposal will work alongside planned reforms to the packaging producer responsibility system as announced in the government’s 25-year plan for the environment.

As for the scope of the new tax, the Government proposes adoption of key definitions of “plastic” and “packaging” in EU legislation

In the case of “plastic” this means the Single-Use Plastics Directive(2019/904/EU) and the REACH Regulation (1907/2006/EC).

Under Article 3 of the Single-Use Plastics Directive “plastic” means a material consisting of a polymer within the meaning of Article 3(5) of the REACH Regulation, to which additives or other substances may have been added, and which can function as a main structural component of final products, with the exception of natural polymers that have not been chemically modified.

Under Article 3(5) of the REACH Regulation, a “polymer” is a substance consisting of molecules characterised by the sequence of one or more types of monomer units. Such molecules must be distributed over a range of molecular weights wherein differences in the molecular weight are primarily attributable to differences in the number of monomer units.

The guidance on Article 3(5) of the REACH Regulationrecognises that natural polymers are not covered as they occur naturally in the environment. This definition would include bio-based plastic and plastics that are compostable, biodegradable or oxo-degradable, as well as fossil-based plastic.

The objective of the tax is to shift demand towards the use of recycled material, while recognising that bio-based, compostable and biodegradable plastic is important in certain applications. Therefore, the government’s initial proposal is that the tax will not distinguish between different types of plastic or different ways of design for disposal.

In the case of “packaging”, the Government proposes adoption of a definition of packaging based on definitions in the Producer Responsibility Obligations (Packaging Waste) Regulations 2007, which follows the Packaging Waste Directive (94/62/EC).This defines “packaging” as:

“all products made of any materials of any nature to be used for the containment, protection, handling, delivery and presentation of goods, from raw materials to processed goods, from the producer to the user or the consumer. Non-returnable items used for the same purposes shall also be considered to constitute packaging.”

Therefore, this covers primary, secondary and tertiary packaging as defined by the Packaging Waste Regulations 2007; reusable plastic packaging, as currently defined by the Packaging Waste Regulations 2007; consumer-facing packaging and distribution and transit packaging; and component parts such as labels or lids used to present or protect a product (even if provided by different manufacturers). Components of packaging that can be easily separated will be treated as individual items of packaging.

The government’s preferred option is to set a single threshold at 30% recycled content with a definition drawing on ISO 14021, which can include some pre-consumer and post-consumer material, whether mechanically or chemically recycled. The government proposes setting a flat rate per tonne of a plastic packaging product. It has not yet announced what this will be. It will continue to consider which approach will best support the objectives of the tax and is most administratively feasible. The government proposes charging the tax at the point of production.