Budget: Tax on plastic packaging; £20m investment in recycling; PRN reform

The Chancellor Philip Hammond has outlined several new measures relating to reducing plastics waste in his Autumn 2018 budget.

In a long-awaited statement for the industry, the Chancellor confirmed that a new tax will be introduced from 1 April 2022 on produced or imported plastic packaging that does not include at least 30 per cent recycled content.

The Government said the tax will “encourage businesses to ensure that far more packaging can be recycled and to use more recycled plastic in their packaging.”

PRN Reform

The planned plastic packaging tax will be implemented alongside confirmed plans to reform the Packaging Producer Responsibility System.

In a much-sought after move for the industry, the Government said plans will be set out later in 2018 to reform the existing system to makebusinesses who make and use packaging, including plastic, more responsible for the clean-up and recycling cost of that packaging.

It said the reform will also encourage the design and use of plastic packaging that is easier to recycle, and discourage use of plastics which are difficult to recycle.

The future revenues collected from these measures, Government confirmed, will enable investment in actions that will address the issues surrounding single-use plastics, waste and litter to help improve the waste system in the UK.

It says a consultation on both these new policies will take place in the coming months to "ensure that they work together in a coherent way."

£20 million recycling investment

The Chancellor’s Budget also set out plans for a £20m investment to tackle plastics and boost recycling.

£10million will be allocated for research and development to fund research into new packaging materials, new recycling processes, and smarter plastic and packaging waste management.

A further £10m funding will be used in 2019-20 to support wider initiatives to tackle plastics, boost recycling and minimise litter, such as installing ‘smart bins’ on streets. Further details, Government says, will be confirmed in due course.

No ‘latte tax’

Many of those who responded to the Government’s call for evidence on tackling waste plastics earlier this year specifically highlighted disposable cups as aproblematic item, highlighting the fact that they are difficult to recycle due to their plastic lining.

The Government says it “recognises this is a problem,” but has concluded that a levy on all cups, nicknamed the 'latte levy', would “not at this time be effective” in encouraging widespread reuse.

It says where Businesses are already taking steps to reduce the impact of disposable cups, it expects industry “to go further” and will “return to the issue if sufficient progress is not made.”

In the meantime, the government will look in the Resources and Waste Strategy at the best way to tackle the environmental impact of cups.

Reducing Incineration and Landfill

Government says where incineration currently plays a significant role in waste management in the UK, it expects this to continue. However, it says in the long term the Government wantsto maximise the amount of waste sent to recycling instead of incineration and landfill.

It says should wider policies not deliver the government’s waste ambitions

in the future, it will consider the introduction of a tax on the incineration of waste, operating in conjunction with landfill tax, taking account of the possible impacts on local authorities.

Bans and Restrictions

The Government said the changes announced in the Budget build on its other planned action taking place to address single-use plastic waste, including plans to ban or restrict the use of plastic straws, stirrers and cotton buds.