On the day the Plastics Packaging Tax comes into force, Philip Law, Director-General of the BPF, tells InterplasInsights where the confusion still lies. Plus, he looks at the ongoing war in Ukraine, and how it is affecting UK resin supplies.
The Plastics Packaging Tax comes into force today. Whilst it has generated much administrative confusion for many companies, let’s hope that in time it will ultimately acts as a platform for greater levels of recycling and innovation, and in doing so takes some of the heat out of the public debate on packaging. The proceeds on the tax will be considerable and BPF will continue to press government to invest it in improvements to the plastics recycling infrastructure.
To help members gain a deeper understanding of the tax and its implications, BPF has teamed up with consultancy EY to publish an explanatory guide available to BPF members. An offshoot of this is an online tool – a decision tree – to provide a quick and simple way for companies to ascertain whether or not their products are in scope to the tax. This tool is freely available on www.bpf.co.uk/PackagingTaxTool
The motivation for this came from survey we carried out which indicated that less than a third of companies feel that they fully understand the upcoming tax. Even as I write this in late March, the government’s guidance on the tax is still not complete and BPF is continuing to press government hard to accept the adoption of mass balance methods to measure the quantities of chemical recyclate in products. Not surprisingly members are inundating the BPF with calls seeking clarification on vexed points.
Areas of uncertainty include the evidence companies are required to submit to the authorities and at what point companies are eligible for tax credits. Uncertainty also exists around calculating the amount of tax liable (if any), how VAT is to be applied and on the information required on invoices for tax-eligible products.
Meanwhile we are considering the impact of the Russian-Ukrainian War on the UK plastics industry. It is likely to vary from country to country. The direct effect might not be as small as was initially thought. Government statistics indicate that imports from and export to Russia were less than 1% of UK trade in plastics materials and products.
However some are now pointing out that exports of polymer from Russia were increasing when raw material shortages were biting hard. Additionally, as substantial volumes of polymer enter the UK from Rotterdam this disguises the original provenance of the material.
The UK, although it has a lower dependence on gas from Russia than some other European countries, will not escape the inflationary effects of rising prices of gas and oil generally. The effects on the availability of steel and other commodity metals will have an impact on the supply of equipment and on some customer sectors. Post Brexit, transport difficulties were given a high profile and the news that a disproportionately high number of lorry drivers are of Ukrainian provenance and that many have returned home, will certainly not help.
On related themes, BPF maintains a strong seminar and webinar programme. On April 27th we are hosting a seminar on ‘Sustainability and Plastics’ and followed by a gathering on ‘Productivity’ at the British Motor Museum in Warwick on 28thApril. May 5th sees us exploring ‘Know Your Carbon Footprint, The Route to Net Zero’. If you have an interest in attending please contact my colleague Paul Baxter on pbaxter@bpf.co.uk.