How the UK & EU plastic packaging tax satisfies the demand of today’s conscious consumer plastic levy

Over the past 10 years there has been a huge shift in consumer perception around products, materials, packaging and services that they purchase. In 2019 the Guardian released a research study which stated that 8 in 10 consumers are trying to reduce their plastic waste and 50% would be willing to pay higher prices for eco-friendly packaging leading to a more conscious consumer*.

Plastic packaging has quickly become of significant interest to the government as consumers interest increases. In response, as from April 2022 the government is introducing a plastic packaging tax whereby any product that doesn’t contain at least 30% recycled content will be taxed £200 per tonne. The EU has also released a similar levy will is due to start as soon as July 2021. This levy requires all EU member states to pay €800 per tonne of plastic packaging placed on the market that is not recyclable/recycled plus member states will also have their country specific regulations.

But what does this tax mean for UK businesses and how will it satisfy consumers demand for less waste? On Thursday 15th April, Anthony Brimelow, Commercial Director at Duo UK hosted a webinar with Martin Hyde, Policy Leader at Comply Direct to explain the upcoming taxes, how to take action, as well as answering the pressing questions. Here we summarise the key points from the webinar and how this helps meet the demands of the more conscious consumer.

Justification for the UK Plastics Tax

The plastics tax existence is to encourage the use of recycled material and minimise the usage of virgin material in packaging. In turn this would help increase the reliance on recycled plastics, the demand, but overall increase the secondary market capacity, leading to more investment into the recycling infrastructure, material collections and recycling facilities. But the UK tax is not ring-fenced. Any tax charges will be diverted into the central treasury rather than set aside for recycling or recycling investment purposes.

The UK plastics tax is being reviewed by the treasury and is being treated as a tax rather than a compliance issue. Plastic taxation is not always linked to or aimed at the environmental measures, sometimes the revenue data factor is as much of an encouragement.

Justification for the EU Plastic Levy

EU plastic levy effectively is a similar tax but isn’t a direct tax on businesses, this is a levy aimed at individual members of state government. It is not a tax but a charge on the material. This tax has been implemented as part of the EU COVID recovery plan to create a specific revenue generation method.

In terms of financial value, the levy is expected to generate £42 billion between 2021-2027 making up to a 4% total EU budget in that time period.

The two EU countries that have made the most progress in terms are Italy & Spain.

Italy’s taxation is planned to be enforced from in July 2021 charging a €450 per tonne which is applicable to all businesses placing virgin plastic packaging on the market. At this point the Italian government haven’t provided any clarification on the level of percentage recycled content they require for an a packaging product to be exempt from their tax. They have stated that the taxation is not applicable for products containing biodegradable or compostable plastics.

Spain planned to enforce their taxation from July 2021 at a charge of €450 per tonne which is applicable to any non-reusable plastic packaging placed on the Spanish market. The companies liable for the taxation are manufacturers of packaging sourced in Spain and importers of packaging which is manufactured outside of Spain. Currently, it is unclear on whether there will be recycled content relief.

Evolving packaging for the conscious consumer

To align with consumer behaviour and prepare for the taxations we suggest 3 immediate actions to take:

Support the circular economy by introducing closed loop recycling. Closed loop recycling makes it easier than ever to reduce, recycle and re-use waste polythene. As part of our closed loop recycling system we offer to collect our clients segregated polythene waste, recycle it and use it to produce new packaging products. This helps keep valuable material in the economy and reduces demand for finite virgin material.
Design out waste by taking a lifecycle view of your packaging. Taking a lifecycle view of the role packaging throughout the entire supply chain ensures consideration is given to all performance criteria and requirements. This view helps reduce material wastage and scrutinises all possible hazards during storage, handling and distribution which can contribute to improved sustainability.
Communicate and communicate some more. Include information about if and how the product can be re-used, where it can be recycled, what material it is made from and what the environmental statics are with the design. Conscious consumers are actively involved with the packaging conversation and will remain loyal to brands that are aligned with their values and passions.

If you want to know more about the upcoming plastics taxes head over to blog here

*Source: https://www.theguardian.com/environment/2019/apr/19/half-of-uk-consumers-willing-to-pay-more-to-avoid-plastic-packaging-survey-shows