Industry calls for more changes to the plastic packaging tax

Plastic Packaging Tax current threshold is more than 30% recycled content in a plastic packaging product

The PPT rate has changed twice since the tax came into effect in April 2022. The levy was first charged at £200 per tonne of any plastic packaging not containing at least 30% recycled content. It increased to £210.82 per tonne in April 2023 and then rose again in April this year to £217.85 per tonne.

Legislation passed as part of the Autumn Finance Bill 2023 means the PPT rate will increase in line with the Consumer Price Index (CPI). There have been calls from industry for the PPT rate to be higher and to also increase the threshold for the level of recycled content in plastic packaging. 

Waste sector trade body The Environment Services Association has called for a stronger PPT escalator. Their suggestion is for a taxable rate of £500 per tonne and for the current threshold of 30% to increase to a minimum of 50% recycled plastic content.

Similar suggestions have been made by waste management company Veolia. The company’s Resource the Future report recommends that the recycled content threshold should rise to 35% this year, with the taxable rate increasing to £275 during the same period. Longer term, the business believes the rates should escalate to 50% and £500 per tonne by 2030.

Credible views support the calls to increase the PPT, as it is expected that the proposed changes could help to stimulate greater demand for recycled plastic packaging. Higher rates would also, in theory, make it cheaper for businesses to use more sustainable and resourceful packaging, rather than opting for virgin plastic polymers because these are liable for expensive taxes. 

Having established up a closed-loop recycling business in 2022, Duclo Recycling, Duo has first-hand experience of the volatility of recycled plastic prices. Driving up market demand and prices for recycled plastic pellets and packaging would be most welcome.

However, increasing the recycled content threshold may deter research and development, and innovation in other sustainable plastics such as renewable bio-based plastics such as GreenPE and risk losing focus on the merits and possibilities of alternative materials.

HMRC data shows that in its first year, the tax generated £276million in revenue. This was above the predicted target of £235million for 2022 – 2023. During this period, 65% of packaging contained 30% or more recycled plastic content.

The Government is due to produce an evaluation of the PPT and make further changes to the levy.

Keep up to date with the latest views and insights about packaging, recycling and circularity to inspire new thinking and conversation by subscribing to our newsletter LoopedIn over on LinkedIn.

Featured in Packaging News