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22nd Jun 2021
As the UK plastic tax and the EU plastic levy approaches, businesses are being proactive and seeking clarification on the implications for their businesses and kick start the changes needed to comply. The UK plastic tax will apply to any business manufacturing or importing more than 10 tonnes of plastic packaging per year (including finished products) and this will come into force as of April 2022.
The EU plastic levy will start as soon as July 2021 in Spain & France. As with any change, preparation and understanding is key to a successful roll out. In April we hosted a webinar with Comply Direct to discuss the details of the regulatory requirements and help provide clarity of areas of uncertainty. Here we answer the most frequently asked questions surrounding the UK plastics tax and EU plastics levy.
Q1. From 1st January 2021, all EU member states are required to pay €800 per tonne of plastic packaging places on the market that is not recyclable/recycled. What is the definition of non-recyclable?
This is probably the core issue with the EU levy, there is very little information available at present as to what they consider as a recyclable item.
The EU levy is aimed at the government rather than businesses, there is very little known about what businesses can actually do in terms of demonstrating whether or not their packaging is recyclable at present to comply with the specific nations obligation. So, what we are expecting to see is the decision on the measurement point will be made by the EU commission.
One problem we do have across Europe and the wider world is that every country has their own way of measuring their performance on recyclability and recycling. So, at this point in time, it is something that is quite vague and we’re hoping that clarity over what is non-recyclable will be provided over the coming months.
Q2. The UK has stated a minimum requirement of recycled content of 30%, has the EU stated a minimum requirement?
This is the difference between the UK tax and EU levy. The EU levy, looks at the recyclability or recycling so, a requirement for a minimum level of recycled content is something that would fall under an individual member of state tax. For example, in the UK we have the 30% figure, another country might decide on 40%, 50%, 10% so on. But at present, this kind of requirement sets the tone that countries in the EU will begin in their own methods of taxation. The EU hasn’t necessarily clarified a minimum requirement at this point.
Q3. How will the EU levy impact on business that distribute products from the UK to the EU?
Currently there is mixed dynamic in terms of how compliance works with international trade. We expect, as each member state begin their own taxation policy, businesses in the country who would pick up the obligation or liability will be looking to offset that cost.
So, in the UK the point of liability is going to be the importer or manufacturer of packaging. If we were to draw that comparison to another country for example, Germany, and they put a taxation in place that has a similar definition to the UK, then the business in Germany will have to pay that liability. When paying for the liability, the business needs to look to their suppliers in the UK for evidence that a minimum of recycled content has been met, or to adjust the price of material if possible, on the basis of that tax being a cost to the business.
To draw a comparison, this is actually that is something that’s quite commonly used with compliance regulations on continent. With the waste electronic equipment directive we often see businesses that are importing and picking up liability offset the costs back to the supplier in the UK. So, its likely we will see this happening in the UK. It’s a benefit to have as much information as possible about the destination or end destination of your packaging material as a business trading in the EU.
Q4. Italy has announced that the EU packaging tax will not be applicable to biodegradable/compostable plastics and those with recycled content. How will the products containing biodegradable additives be identifies?
This is a key issue with any form of plastic taxation. When something has been manufactured into plastic it is really difficult to test and demonstrate recycled content. This is why a tax rather than a compliance obligation seems to be the best way to address this. The government in each member state can say to the producer or business placing goods onto the on the market to demonstrate that they can meet the recycled content. If they can’t demonstrate that they can meet the recycled content, then they would have to pay the tax.
Currently, here isn’t any commercially available and affordable method of demonstrating the percentage of recycled material or additives in plastic.
Q5. Three different ‘properties’ of plastic products have been referenced; compostable, biodegradable and recycled. What is the impact of these properties on the recyclability of the material?
Yes there will be an impact on the recyclability of the product and that issue is being reviewed in the UK. How to distinguish an additive, whether that be compostable or biodegradable, in a plastic product is an unknown area.
Q6. A product such as a mailing bag can be re-used as a bin liner or if it has a second glue strip used to return any unwanted items, would this exclude them from the Spanish tax which proposes that all none reusable packaging items would attract a tax?
That opens a really interesting debate about the use. It’s harder at this point on the certainty but, the general consensus is when they say “non-reusable” they are looking at long-term re-use ie a water bottle that is used multiple times. What is being considered in the UK is that an item is called as “re-usable” if it is in the same condition and is able to be used multiple times without any change to the item. However, there is a role for reusable certainly when we look at the environmental attributes and lifecycle assessments and minimises the actual carbon footprint. Using a plastic bag as a bin liner can significantly reduce the carbon impact as a new packaging item is avoided.
Q7. Regarding the UK plastics tax, what do you advise companies do if a plastic products they use cannot perform or be produced using 30% recycled material?
This is a common issue across the food industry. There are a couple exemptions, but the problem that we continue to notice is that it is difficult to meet that percentage yet some businesses have managed to move achieve 30% recycled content and have it food safe. But the problem now is getting hold of the material to meet that demand.
It now costs increase for recycled material on the current market is more expensive than paying the UK plastic tax of £200 per tonne. Many companies are now having commercial conversations, do we or don’t we pay for the taxation.
Most people who choose to pay the tax, aren’t environmentally successful. But, from a government’s perspective, that would be successful financially because you’re getting the guaranteed funds coming in
When it comes to making changes to your packaging material to include 30% just treat it as though you would a normal design change. For example, adding 30% recycled content to a mailing bag will not change the performance of the products however you may want to change the design and communicate how much recycled content is in your bag, how consumers can re-use or recycle the product.
Q8. Where should we start?
Arrange a meeting with your packaging supplier and your team. This is a good opportunity to revisit how your packaging is used, re-used and recycled. Areas to review include the messaging and how this could be connected with your off-line communication, if and how the product can be re-used, how and where it can be recycled, what material it is made from and what the environmental statics are.
If you are not already doing so, this change provides an opportunity to start recycling polythene waste generated as part of your business processes. Segregating any waste polythene into different recycling streams: clear and mixed helps generate a better quality of recycled pellet and can be re-used to manufacture new products you require. The introduction of the tax has created an increased demand for recycled material so it’s important that businesses work together to recover and recycle waste material to feed so this valuable material is available.
To find out more about the UK & EU plastics tax, watch our webinar ‘Unpacking the plastics tax’, which was hosted by Anthony Brimelow, Commercial Director at Duo UK and Martin Hyde, Policy Leader at Comply Direct, here