The Plastic Packaging Tax (PPT) is not working, says waste management group Veolia, which has called for the tax to be further increased, saying it could unlock over £1 billion in investment.
The PPT, introduced in April 2022, is aimed at reducing plastic waste by encouraging sustainable packaging practices. In its first year, HMRC collected £276 million in PPT.
In a bid to encourage businesses to use more recycled plastic in packaging, the government introduced a new rate of £217.85 per tonne on plastic packaging that contains less than 30% of recycled content, from April 1 this year.
But waste management group Veolia is calling for the tax rate to be further hiked. It said the current tax is not achieving its aim as only 22% of the material used in plastic packaging is from recycled sources.
In its Resource the Future report, Veolia calls for the minimum amount of recycled material to increase from 30% to 35% this year and for the tax to increase from £217.85 to £275 per tonne. It then should increase to 50% and £500 per tonne by 2030.
To achieve this the UK will need to invest £1.1 billion in building ten new plastic sorting and 30 new plastic reprocessing facilities, creating 2,500 new jobs and reducing annual carbon emissions by 1.8 million tonnes of CO₂ equivalent, it said.
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Furthermore, it said increasing the tax would mean that UK brands, manufacturers and recyclers would be able to continue to trade across both UK and European markets without falling behind European Union (EU) legislation.
The EU is targeting mandatory recycled content, rather than incentives, reaching up to 65% by 2040.
Veolia said that 7 in 10 Brits support an increase in the tax on companies who do not use recycled content and want to see a higher percentage of recycled materials in the packaging they buy.
Gavin Graveson, Veolia senior executive vice president, northern Europe zone said: “The recycled plastic industry cannot be ignored if we are serious about building a green economy. The Plastic Packaging Tax is a crucial lever to stimulate growth in the sector, but it needs recalibrating so we create a market where it is cheaper to be sustainable and more expensive to pollute by using virgin polymers.
“We need to bring thousands of tonnes worth of recycling capacity online – and fast. But this can be a great opportunity for the Government to unlock private investment, new jobs and carbon savings. Backing green policy isn’t a zero sum game.”
Last year, the Department of Environment, Food & Rural Affairs (Defra) researched the effects of microplastics in household goods, and may consider policy changes as part of its commitment to tackle plastic pollution.
