29th Jul 2022
Today, 29th July 2022, is the deadline for businesses to submit their first return as part of the new Plastic Packaging Tax here in the UK.
Duo’s Brand Director, Zoe Brimelow, joined Felicity Hannah on @BBC Radio 5 Live’s Wake Up to Money programme to explain more about PPT, what it means for businesses and their customers, and how we believe the revenue generated by the tax should be invested in improving the UK’s recycling infrastructure to meet increased demand.
Here’s Zoe’s recap…
The Plastic Packaging Tax came into effect in April 2022 and was introduced by the Government with the aim of encouraging more recycled material to be used in the production of plastic packaging, as well as increasing recycling processes to divert plastic away from landfill. The tax is set at £200 per tonne and applies to plastic packaging items containing less than 30% recycled plastic – unless they’re exempt. Exempt items include plastic packaging used to immediately package medicinal products, for example.
But what have companies had to do to prepare for the first return submission, and has it all been worthwhile? For manufacturers like Duo, we’ve had to obtain chain of custody documents for our material to evidence that we’re using genuine recycled content in our packaging products. We’ve also had to modify our internal processes to provide evidence of our liabilities to our customers for their submissions, as well as our own.
It’s been a huge administrative task that’s taken a lot of time, investment and resource.
To get ahead, we actually started working with customers early in 2021 to inform them of the implications of PPT and set about redesigning many of our products to include 30% or more recycled content. We developed sample products so our clients could test out the new specifications to ensure that the performance of their product wasn’t affected and still achieved the main objective of packaging – to protect and preserve items.
Has it all been worthwhile?
It’s important to stress that as a business we believe that using more recycled and less virgin material – whether that’s plastic or any other material – should absolutely be encouraged. But in order to meet the demand for recycled content, you need the supply. The increase in demand for recycled content from businesses has caused the price of recycled plastic to surge, and the UK doesn’t yet have the right infrastructure to produce the volume of recycled material that businesses need – even to meet the minimum PPT requirement of 30%. This has left many businesses with no option but to purchase recycled material from other markets, such as the EU, which raises a valid question on how this supports other environmental objectives such as reducing carbon emissions in supply chains.
PPT has come at an extremely challenging time, especially for manufacturers who are contending with rising costs across the board, from energy to interest rates, while at the same time contending with staff shortages and complex supply chain issues.
In light of these rising costs, some businesses have seen it as more commercially advantageous to continue to use virgin material and take the hit on the tax, instead of trying to procure recycled content. Again, this goes against the tax’s main objective and in many cases will mean these cost increases are passed on to consumers.
Could the same objectives of encouraging the use of more recycled plastic and increasing recycling have been achieved by supporting businesses to innovate rather than the introduction of a tax?
I believe it would have met the same goal and helped create a foundation for the future. We need clarification from the Government on how the money generated by the tax is going to be spent. That’s an area that I believe is not fully understood, yet.
In my opinion, for the tax to truly be a success, the money generated should be reinvested into the UK’s recycling infrastructure so we’re able to generate more recycled content right here in the UK for businesses to use when producing new products. This would deliver many more environmental gains than the current ways of working.