Three years on, is Plastic Packaging Tax Working?

The UK introduced Plastic Packaging Tax (PPT) in 2022, and it will increase again on 1st April to £223.69 per tonne. Three years on, how close is the government to meeting the aims of PPT and what difference has it made to businesses and consumers?

Plastic Tax was introduced as one of a range of measures designed to help build a more sustainable model for plastic packaging. The aim was to dissuade the use of virgin plastic by making it more costly, whilst creating market demand for recycled plastic by making products made from at least 30% recycled plastic PPT exempt. Market data shows that plastic tax has led to several areas of innovation, including packaging that uses less plastic and packaging made from recycled or alternative materials.

Businesses use less plastic packaging

Plastic tax is calculated by weight, so one of the most effective ways to mitigate the tax is to minimise the amount of plastic used in packaging. Companies have harnessed this strategy in a number of ways. Using oversized containers to make customers think they are getting more value is dying out. When tax is calculated on the size of a container it pays to be small.

Removing empty space keeps plastic packaging volume to a minimum. This is one of the reasons there has been an increase in the use of vacuum packs by supermarkets. Sainsbury’s calculates that their vacuum-packed mince uses 55% less plastic compared to their previous packaging, a reduction of 450 tonnes of plastic annually.

Weight reduction is why some cosmetics and toiletries are now packed in soft tube bottles, rather than heavier hard plastic bottles. Rigid packaging manufacturers have optimised their plastic buckets and bottles for weight and performance, ensuring they weigh as little as possible without compromising quality. Companies have also removed unnecessary plastic packaging, keeping only those essential elements that are necessary to do the job.

An increase in recycled plastic packaging

The availability of recycled plastic packaging has increased as the sector looks to innovate. There has been a gradual increase in the volume of plastic packaging containing 30% or more recycled plastic. Many multi-national companies, such as Unilever now use containers made with at least 30% recycled content as standard.

Coca-Cola, one of the biggest users of single-use plastic bottles now use 100% recycled plastic for their smaller bottle sizes in the UK, with a global pledge to use 35% to 40% recycled primary packaging by 2035. Industrial packaging, such as jerry cans, IBCs and barrels are now available in recycled plastic, making it easier for manufacturers and wholesalers to use more sustainable containers.

A rise in the use of alternative materials and innovative ideas

An increasing number of businesses are now using metal or paper-based packaging instead of plastic. Paint tins and aluminium cans are gaining popularity once again, although it remains to be seen what the impact of trade tariffs will be on metal packaging. One of the biggest switchovers has been from plastic to paper-based products for secondary packaging. Bubble wrap and polystyrene are being phased out in favour of alternatives such as honeycomb paper and cellulose foams.

Change is not always without controversy. When Quality Street switched to wax paper wrappers from the iconic (but plastic) shiny ones, it made headlines. However public opinion is widely in favour of measures that address the issues of plastic waste. Bioplastic technology is evolving. Packaging made from seaweed, mycelium and corn starch is becoming more widespread. Bioplastics can be a practical alternative to single-use plastics, and because they degrade without releasing harmful petrochemicals or microplastics they are a better choice for the environment.

The Key Challenges

Whilst PPT has led to positive changes in the plastics industry significant challenges remain. The UK’s plastic recycling rate has seen significant improvement, with the recycling and recovery rate of plastic packaging reaching 52.5% in 2023, the highest recorded figure, and a 2.14% increase from the previous year. However, there is still work to do to hit the British Plastic Federation’s target of a reuse and recycling rate of 70% by 2035.

Issues remain around compliance and verification, and the supply and quality of recycled plastic still has peaks and troughs. Plastic waste exports have been on a downward trend since 2011, and increasing the UK’s capacity to recycle is still central to the success of PPT. Recycling for businesses and consumers must be as straightforward as possible and public education and engagement are also key to boosting recycling rates. Improved kerbside schemes and supermarket return initiatives are helping consumers recycle a wider range of plastic products more easily.

What’s Next for Environmental Taxation?

Environmental taxes are here to stay and are growing in scope. In the UK the much anticipated EPR (extended producer responsibility) will put the onus on producers to pay for waste, and similar initiatives are being rolled out in other countries. Waste and plastic pollution is a global issue so the solutions need to be global too. The EU has introduced a levy on plastic packaging waste. China has outlawed certain types of plastic packaging and Rwanda became a “plastic-free” nation way back in 2008 through a ban on plastic bags and packaging.

The long-term effectiveness and broader economic impacts of environmental taxation are still being evaluated. But one thing is certain, how we use plastic needs to evolve to ensure we use this most useful resource in a sustainable way.

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