Market Updates

Plastic Tax! New Tool to Help Recycling?

November, 2018

On 30th October, the UK announced the budget and thus the intentions to introduce new tax on plastic packaging which does not include specified minimum level of recycled content. Europe has always been leader for consumer protection and environmental friendly sustainable solutions. The announcement included minimum limit of 30% recycled plastics and mentions about planned introduction aim of year 2022. The government documents do not set boundaries to which plastics are going to be included in the definition of aforementioned ‘plastic packaging’ category, although pots, trays, and bottles are to be part of this category. The government has also announced about allocating total £40 million with objective of plastic handling and increasing R&D in plastic recycling.

Plastic Vs rPlastic

Currently the UK has a market demand of around 2.26 million tons of plastic packaging per year. Out of this, majority of the packaging is using new plastic, being the cheaper option. Most of the plastic utilized in the one-time disposable packaging ends up either in the landfills or in the ocean polluting environment every year. The current recycling rate of plastic

The government has announced the plastic tax with objective of incentivizing the recycled plastic via balancing the cost parameters. The UK government has been planning to allocate the funding to increase options for plastic recycling and making it lucrative for the players working in the industry. Further, the intended time allocated before introduction of tax is expected to enable market players to adjust to suitable processes and supply options.

Other Side View

The announcement has taken the market by surprise and not many people from the industry have supported the thought of plastic tax. The Food & Drug Federation (FDF) has highlighted the potential cost impact of such taxes on Food and Drinks in the UK. The industry participants have been highlighting the problems and challenges faced by industry in collection and effective recycling of plastic waste, which makes it difficult to match the required quality for final packaging. Currently many of the leading players in the Food and Beverage companies are already utilizing the recycled plastic in their packaging and have targeted to increase the same in foreseeable future. The big brands of Coca-Cola, PepsiCo, Britvic, and Ribena are part of these players encouraging the use of recycled plastic reducing the pressure on natural resources.

How the market will evolve, only time will tell. However, the announced step definitely shows definite intentions of the UK government to take decisive action for environmental protection. From a point of view of a common resident, the view is definitely welcome in longer term, which will result in relatively better environment for current and future generations.

– Ankur Kalra,
Manager – Chemicals and Materials,
Infoholic Research