Major changes in UK plastic packaging tax include chemical recycling!
The Bioplastics Research Institute reported that the UK HM Revenue and Customs (HMRC) has released a significant update to the Plastic Packaging Tax (PPT), which will officially recognize chemical recycling as a recyclable component from April 2027, and pre consumer recycled components will no longer be eligible for tax exemption. These two major policy changes will reshape the landscape of the UK plastic packaging industry.
What is plastic packaging tax? If the regeneration content is less than 30%, a tax of 2146 yuan per ton will be levied
In recent years, global environmental awareness has been continuously increasing, and countries have introduced policies to address plastic pollution. In the UK, plastic packaging accounts for 44% of the domestic plastic usage and constitutes 67% of the main source of plastic waste. A large amount of packaging uses new materials, and the use of recycled plastics is insufficient.
In this severe situation, the UK will implement a plastic packaging tax from April 1, 2022, hoping to promote the sustainable development of the plastic packaging industry through tax measures. Its core purpose is to improve the level of plastic waste recycling and strengthen the management of importers. This policy stipulates that plastic packaging with a recycled material content of less than 30% will be subject to taxation.
Starting from April 2024, companies producing or importing such packaging will be required to pay a tax of £ 223.69 (2146 RMB) per ton. This measure aims to use economic means to force companies to increase the use of recycled plastics, reduce their dependence on virgin plastics, and thus reduce plastic pollution.
What changes will happen in 2027? Chemical recycling is recognized, and pre consumer waste is eliminated
This policy adjustment presents a significant feature of "one plus one reduction".
'Add' refers to the inclusion of chemical recycling as a recoverable component. Starting from April 2027, the recycled plastic content generated by chemical recycling will be officially included in the statistics of plastic packaging tax on recycled content. To adapt to the characteristics of chemical recycling products often being mixed with raw materials and difficult to physically trace, the UK has introduced the Mass Balance Approach (MBA) as a method for calculating the regeneration content. This regulatory chain model allows companies to calculate the recycling content through quality balance when mixing recycled materials with raw materials, expanding the statistical scope of plastic packaging tax recycling content from traditional physical recycling to two major fields: physical recycling and chemical recycling.
What is' reduced 'is that the pre consumption regeneration (PIR) content is excluded from the statistical range. In the past, recycled ingredients before consumption, such as production waste, could be included in the tax exemption conditions. But after the implementation of the new regulations, only post consumer recycled materials, whether processed through mechanical or chemical means, will be counted towards the 30% threshold.
What does this mean for the enterprise?
These updates will require companies to rethink their material procurement and compliance strategies earlier than expected. The reform was originally planned to be implemented in 2029, but now it has been advanced to 2027, two years ahead of schedule.
Enterprises, including international suppliers who import 10 tons or more of packaging to the UK annually, must ensure full traceability of their recycled ingredients, especially when using chemically recycled raw materials.
For flexible packaging enterprises that rely on pre consumer materials, if they cannot adjust their production mode in a timely manner and increase the proportion of chemically recycled materials, they will face a high tax burden of 223.69 pounds (2146 yuan) per ton.
This adjustment has a huge impact on flexible packaging companies that rely on pre consumer materials, such as manufacturers of plastic bags and functional films. If they cannot adjust their production mode in a timely manner, increase the proportion of chemically recycled materials used, or cannot increase the recycled content to 30% before the implementation of the new regulations, they will face high tax burdens.