FBOs must begin to prepare for a plastic packaging taxPrint publication
In the March 2020 Budget, the Chancellor announced a new tax that will apply to plastic packaging produced in, or imported into, the United Kingdom that does not contain at least 30% recycled plastic. Government explains on its website that the policy objective behind the tax is to ‘provide a clear economic incentive for businesses to use recycled material in the production of plastic packaging which will create greater demand for this recycled material and in turn stimulate increased levels of recycling and collection of plastic waste, diverting it away from landfill or incineration‘.
The tax will take effect from April 2022 and draft legislation setting out key features of the tax is promised later in 2020. One such headlined feature is the tax rate which will see businesses whose products have less than 30% recyclable material in their plastic packaging being charged £200 per tonne of packaging.
The use of plastic packaging is widespread in the food and drink sector and so many food and drink manufacturers must start planning now for a fundamental change in how their products are packaged. If you add the plastic packaging tax to the increasing cost of Packaging Recovery Notes and the incoming Extended Producer Responsibility rules, manufacturers are heading towards a perfect storm of rising costs.
Food and drink manufacturers need to examine the sustainability of their products and understand the impact that the upcoming changes to taxation and regulation will have on the profitability of their products. This may involve re-formulation or re-engineering of current products to ensure that they can be made from the maximum recycled content.
The overall message is that action is required now to be ready for the changes and to be in a position to take advantage of any opportunities that might arise.