Chase Plastics highlights true cost of PPT for manufacturers
Key Highlights:
- Plastic Packaging Tax (PPT) receipts have exceeded HMRC's initial estimates, indicating many manufacturers haven't fully embraced recycled content to avoid the tax.
- Chase Plastics is concerned that UK manufacturers risk competitiveness by not utilising recycled content, especially with the PPT rising.
- The company's Cost Comparison Guide highlights the cost advantages of incorporating recycled polythene (rPE).
With Plastic Packaging Tax (PPT) receipts having significantly surpassed HMRC’s year one estimate, it seems many manufacturers have yet to embrace the use of recycled content to mitigate the tax. Reflecting their concern that the PPT is impacting the competitiveness of UK polythene packaging manufacturers - especially with the rate increasing to £217.85/tonne on 1st April - Chase Plastics has published a useful Cost Comparison Guide. This handy guide highlights how, for every tonne of polythene packaging made without the required recycled content, the actual cost of the PPT on the 300kg of virgin material used is some £726 per tonne.
Chase Plastics has a genuine concern that UK based manufacturers are risking their competitiveness through not embracing the opportunity presented by rPE. The company highlights that in addition to the relative price disadvantage created by paying the tax, 100% virgin polymer products do not appeal to many end users seeking to embrace the circular economy through the use of more sustainable packaging.
“Understanding how the costs of a virgin polymer formulation compare to one with 30% recycled content is key to protecting margins and competitiveness, especially with the PPT rising again on 1st April,” said David Harris, chairman of Chase Plastics.
“Our Cost Comparison Guide includes a costing ready reckoner which highlights the breakeven price points for the recycled content required in order to avoid the PPT and appreciably reduce overall blend costs.“
He continued: “The PPT was designed to provide an economic incentive for the use of recycled content but as the year 1 tax receipts demonstrate, the financial incentive has not yet been realised by all manufacturers. As we approach year 3 of the tax, it is essential that UK based polythene packaging manufacturers fully appreciate the cost of the PPT.
"To support this, we are publishing a cost comparison guide to highlight the savings possible through the use of our RECOTHENE rPE product. We hope this straightforward guide will encourage greater use of recycled content which, in turn, contributes to the Circular Economy.”
Copies of the Cost Comparison guide are available upon request from Chase Plastics. With over 60 years of recycling experience, Chase Plastics manufactures the RECOTHENE range of recycled polythene pellets at their EUCertPlast accredited factory in Suffolk.