After a wait of over a year, the Government delivered its Budget 2020 on taxes and spending. Ecosurety’s head of policy, Robbie Staniforth, shares his views on HM Revenue & Custom’s second public consultation on a Plastic Packaging Tax and explains why the wait for packaging recycling targets is a concern.
While watching the Chancellor’s speech from the comfort of my desk, I felt a strong sense of déjà vu. It wasn’t just because the introduction of a plastic packaging tax was lauded by a previous Chancellor. It struck me that the plastic packaging tax has become the new plastic carrier bag charge.
The carrier bag policy was previously repeatedly rolled-out as evidence of a Government taking action on waste. The Plastic Packaging Tax has now assumed that mantle. I fear it will figure in every Spring Statement and Autumn Budget from now until its proposed launch in 2022.
Of all the concerns, the biggest is whether the Plastic Packaging Tax will prove to be as flawed as the Carrier Bag Charge in terms of reducing resource-use. The carrier bag charge was high profile, targeting single use plastic bags. It got consumers thinking about the waste they were creating as they transported their already packaged goods home from the shops.
While watching the Chancellor’s speech from the comfort of my desk, I felt a strong sense of déjà vu
However, evidence of the charge having reduced the consumption of plastic bags is limited. We have all seen The Times’ study suggesting 44 bags for life are purchased by the average household every year.
Reading the Plastic Packaging Tax consultation document, it was particularly interesting to see that multi-material packaging – where plastic is not the predominant material – will not be in scope of the tax. One hopes this does not pave the way for food manufacturers to shift away from using highly recyclable plastic packaging to harder to recycle laminates, simply because including recycled content is too much hassle for food contact packaging.
As cited in the consultation, the Government hopes Defra’s new Extended Producer Responsibility regime will discourage this shift through the introduction of a modulated fees system.
The introduction of a new flat-rate tax of £200 per tonne on plastic items containing less than 30% recycled plastic also seems far too blunt. As recently highlighted in a report by the Green Alliance, the effectiveness of a flat rate tax depends on market conditions. If the Government genuinely want investors to fund recycling infrastructure that can cope with more than just the easy-to-deal-with plastic bottles, a nimbler approach is required.
It also remains to be seen whether in current market conditions £200 per tonne will be enough to prompt packaging producers to change their habits.
Cause for hope
However, there is cause for hope. I take solace from the fact that the idea of a recycled plastic tax remains part of the Government’s thinking. It would be expecting too much of Defra to create an incentive to use recycled content on top of the plethora of other issues they are trying to resolve with their new Extended Producer Responsibility regime.
It is pleasing to see the burden for improving packaging outcomes being shared across Whitehall. Also, while I’m not certain £200 per tonne on packaging with less than 30% plastic will be enough in the long run, I can imagine declaring a figure will get board rooms around the country thinking about changes that need to be made.
The public consultation itself addresses many of the key concerns highlighted by those of us who straddle both the packaging and recycling industries. It is a welcome shift to see that imported filled packaging will now be in scope of the tax, effectively ensuring operations are not offshored to avoid paying the tax or increasing recycled content.
I was very surprised that no announcement was made on packaging recycling targets for 2021 and 2022.
That said, concern will now inevitably shift to how recycled content will be measured as the list of potential evidence sources given is varied. I fear that without a robust standard for recycled content being developed, we could see the same problem of unverified material coming into the UK, as we currently have with unverified material leaving the UK, supposedly destined for recycling.
I was very surprised that no announcement was made on packaging recycling targets for 2021 and 2022. Usually, these targets are known several years in advance to allow some industry foresight. One of the many failings of the current producer responsibility regime for electronic waste is that targets are not known in advance causing investment paralysis.
A lack of direction can now be added to the already plentiful list of issues with the current PRN (packaging waste recovery note) system.
Defra included a question proposing aggressive recycling targets for all packaging materials, except wood, in their public consultation last year. In the summary of responses released, opinions were mixed and more reasoning for the short-term targets of 2021/2022 being much higher than medium-term targets of 2025/2030 was required by industry.
According to that summary, Defra were due to undertake further analysis, which we must assume is yet to be completed.
The Chancellor is likely to deliver another Budget in its usual slot this Autumn. This is the very latest he can leave an announcement about packaging recycling targets, else an already ailing system may disintegrate altogether. And if he doesn’t mention the Plastic Packaging Tax, I’ll eat my hat, which coincidentally should also be made of recycled content. I’ll leave the need for a textiles waste policy for another day.