The UK Plastic Packaging Tax (‘PPT’) will hit firms hard. Are you ready?

Are you ready for the Plastic Packaging Tax (PPT)? If you manufacture or import 10 or more tonnes of plastic packaging within a 12-month period, you may need to register for the tax. You need to register for the Plastic Packaging Tax if you’ve manufactured or imported 10 or more tonnes of finished plastic packaging components within the last 12 months or will do so in the next 30 days. From 1 April 2022 to 30 March 2023, the 12 months threshold will be worked out differently.

For the purposes of Plastic Packaging Tax, plastic means a polymer material to which additives or substances may have been added. Cellulose-based polymers that have not been chemically modified, such as viscose, will not be treated as plastic for the purpose of Plastic Packaging Tax.

Other cellulose-based materials which are chemically modified, such as cellulose acetate, will be considered plastic. Additives include materials such as calcium or dyes. When you assess the amount of plastic in a packaging component, the additives are classed as part of the plastic.

Plastics include polymers which are:

  • biodegradable
  • compostable
  • oxo-degradable

If a plastic packaging component is made from multiple materials but contains more plastic by weight (including additives which form part of the plastic) than any other substance, it will be classed as a plastic packaging component for the purposes of the tax.

The other substances which you need to consider are:

  • glass
  • aluminium
  • steel
  • other metals
  • paper and board
  • wood
  • any other substance

You will need to keep records to show what substances are in plastic packaging.

Recycled plastic

 

Plastic packaging components containing 30% or more recycled plastic are not chargeable for the tax. However, they still count towards the 10-tonne threshold for packaging you manufacture or import in a 12 month period, and you must still keep records of it. For the purposes of Plastic Packaging Tax, all plastic is assumed to be made using non-recycled (virgin) material, unless there is evidence that recycled material has been used.

Recycled plastic is plastic that has been reprocessed from recovered material by using a chemical or manufacturing process. This is so it can be used either for its original purpose or for other purposes. This does not include organic recycling. Recovered material is pre-consumer plastic or post-consumer plastic that both:

  • is no longer suitable to be used in the process from which it was generated and would otherwise have been used for energy recovery (for example, by incineration) or disposed of as waste (for example, by being sent to landfill)
  • has been collected and recovered for use as a material input for a recycling or manufacturing process, instead of new primary material

Pre-consumer plastic

Pre-consumer plastic is plastic that’s recovered from waste generated in a manufacturing process and subsequently processed by a reprocessing facility. It does not include plastic that is reused or capable of being reused in the same manufacturing process from which it was generated and recovered, even if it is reprocessed first. This type of plastic is often known as scrap or regrind. For example, where waste material generated during the extrusion of film is reused in the extrusion process (even where it is re-processed first) it will not count as pre-consumer plastic.

However, where waste material which is generated through a thermoforming process is no longer suitable to be re-used in the thermoforming process, providing it is reprocessed and used in a different process (such as the extrusion process) it can be treated as recycled plastic.

Post-consumer plastic

Post-consumer plastic is plastic that’s generated by the end user of the product. The product can then no longer be used for its intended purpose.

The consumers are:

  • households
  • commercial facilities
  • industrial facilities
  • institutional facilities

This includes returns of material from the distribution chain.

Reprocessing plastic

The reprocessing of pre-consumer plastic and post-consumer plastic can be completed either at a reprocessing site or within your own premises if you have the facilities. Examples of processes involved in reprocessing can include:

  • grinding
  • remelting
  • regranulating
  • compounding

*This list is not exhaustive.

Packaging Subject to the Tax

There are 2 types of plastic packaging subject to the tax. These are packaging designed to be suitable for such as use in the supply chain and single use by the consumer. If your packaging is made up of several packaging components, you must account for Plastic Packaging Tax on each component. Individual packaging components are generally manufactured separately before being assembled into a packaging unit. Examples include:

  • bottles, caps and labels are manufactured separately before being assembled to make packaging units for drinks and liquids
  • trays, boxes and plastic windows are manufactured separately before being assembled to make packaging units for certain foods, such as pies and cakes
  • Packaging designed to be suitable for use in the supply chain

You should check whether each plastic packaging component that you manufacture, or import is subject to Plastic Packaging Tax.

A plastic packaging component is a product that’s designed to be suitable for use in the supply chain, from the manufacturer of the goods to the user or consumer. It can be used alone or in combination with other products. If the packaging component meets the definition, it does not matter if it is produced or imported for use in the supply chain of the goods, or by a consumer or user.

It must do one or more of the following functions:

  • contain the goods
  • protect the goods
  • handle the goods
  • present the goods
  • deliver the goods

Packaging Designed to be Single Use Consumer Packaging

For the purposes of Plastic Packaging Tax, single use consumer packaging is any single use product designed to be used by a consumer or domestic user in performing one or more of the following functions in respect of goods or waste:

  • containment
  • protection
  • handling
  • presentation
  • delivery

These products would be used by the consumer rather than in the supply chain. Plastic Packaging Tax only applies to manufacturers and importers of plastic packaging components which contain less than 30% recycled plastic. Packaging should only contain recycled plastic where it is permitted under other regulations and food safety standards.

Criticism of the Tax

The UK Plastic Packaging Tax is set for enforcement next week, but packaging manufacturers and industry bodies fear the legislation lacks the necessary detail to effectively reduce fossil fuel-based material usage and will instead punish businesses actively attempting to lower their carbon footprint. The tax, which will take effect on April 1, stipulates that any company annually importing more than 10 metric tons of plastic containing less than 30% recycled contact will face a £200 (US$264) levy per ton. Any amount less than 10 metric tons will be exempt.

This tax is not the only anti-plastics legislation to receive criticism from industry bodies and companies in the past year. The EU Single Use Plastics Directive (SUPD) recently came under fire for being rushed into enforcement and failing to take into account innovations that could help diminish the use of environmentally harmful materials. The SUPD made no exemptions for biodegradable single-use items, which many industry players say misses a vital opportunity to keep materials on the market that can break down naturally in the environment.

Activists say the legislation was rushed through the European parliament and missed a vital opportunity to ban certain harmful plastic products and at once a chance to exempt and promote those with a low environmental footprint. However, industry bodies like the Food and Drink Federation (FDF) say the legislation contains a critical oversight – many plastics that come into contact with contaminants such as food cannot be recycled and should be exempt. The UK government, which passed the law in 2018, failed to make exceptions in these areas and will now tax businesses according to standards they cannot heed.

The FDF’s director of sustainability Nicki Hunt, is quoted as stating “Our food and drink manufacturers want to do the right thing and recycle more packaging – in line with the UK government’s, and our own, environmental targets – but efforts are being constrained by restrictions around the materials that can have contact with food, which cannot currently be recycled, and are subject to the new plastics packaging tax. The result of this is that further costs are placed on businesses, which may lead to higher prices for consumers. Our industry would prefer government measures to further support and incentivize innovation in recyclable packaging materials.”

WRAP’s Findings on Fresh Produce and Plastic Packaging

The overuse of plastic packaging is something that we can do something about. WRAP conducted a study on plastic wrappers on fruit, vegetables and other produce.

Supermarkets should stop selling fresh produce such as apples and potatoes in plastic packaging, research suggests, because it does not make them last longer and adds to pollution and food waste. The 18-month study by the sustainability charity Wrap, which also looked at sales of bananas, broccoli and cucumbers, debunks the idea that single-use plastic wrappers help prevent waste. Instead, this packaging often forces people to buy more than they need, increasing the problem of wasted food.

Marcus Gover, Wrap’s chief executive, said that while packaging was important and often carried out a critical role to protect food, its research had found that plastic wrap “doesn’t necessarily prolong the life of uncut fresh produce”, adding: “It can in fact increase food waste in this case.”

Britons throw away almost half a million tonnes of fresh vegetables and salad and a quarter of a million tonnes of fresh fruit – worth a total of £2.1bn – each year because it has gone soft or mouldy, or the date label has expired. This waste is bad for the planet: about one-third of the UK’s greenhouse gas emissions are associated with food and drink. In the battle with food waste, packaging was found to be a less important part of the picture than other factors, such as enabling people to buy the right amount or how it was stored.

“We found that storing food in the fridge at below five degrees gave days, weeks, and, in the case of apples, months more quality product life,” said Gover. “We found that for most items, the plastic packaging they were sold in made little or no difference to their shelf life. “In cases where consumers had no choice but to buy more than they needed in pre-packed packaging, this could actually increase food waste,” he added.

Wrap studied the five items: apples, bananas, broccoli, cucumber and potatoes, stored in the original packaging and loose, and at different temperatures. It calculated that if these five products were sold loose, and the best-before dates removed, it could save more than 10,300 tonnes of plastic and about 100,000 tonnes of food from being wasted each year – the equivalent of 14m shopping baskets of food.

The food waste was prevented because people bought the right amount and used their judgment, rather than date labels, to decide if food was still good. One in 10 people dump groceries based on the date, resulting in good food being thrown out. Most supermarkets sell some of these items loose already but Wrap, whose work helps shape government policy on sustainability matters, said its research presented compelling evidence for a wider range of fruit and veg to be sold this way.

“As people faced rising fuel and food prices, there was a compelling economic as well as environmental case for ringing the changes in grocery aisles”, Gover said, “and retailers should step up and act on Wrap’s findings. This helps save the planet and us money at the same time,” he said. Wrap conceded it would take time for things to change and it will now consult the Food Standards Agency, Defra, and the food industry to make loose produce in supermarkets a reality by 2025.

So, while many enterprises are looking for alternatives to using plastic and groups such as WRAP work hard to educate and change people’s behaviours,  the new measures introduced by the Government come into effect in April and will impact UK manufacturers of plastic packaging, importers of plastic packaging, business customers of manufacturers and importers of plastic packaging. In addition, millions of members of the public buying plastic packaging or goods in plastic packaging in the UK will also be affected by the new tax rule.

In line with other taxes, there will be civil and criminal penalties for failing to comply. These penalties include repercussions for failure to register, failure to file returns and failure to pay the tax. As detailed on the Government’s website, the tax applies “to plastic packaging manufactured in, or imported into the UK, that does not contain at least 30 percent recycled plastic.” Are you ready?