The latest news and views from Gibson Lamb

The place for updates on financially significant world events; our views on market developments; and news about our approach to doing business, including our focus on sustainability.

Addressing the plastic problem

Addressing the plastic problem

By

Date published

It’s no surprise to hear that we have a plastic problem. We use 5 million tonnes of plastic each year in the UK. Half of that is packaging. Put another way, households collectively throw away an estimated 100 billion pieces of plastic packaging each year. Most of it ends up either in landfill, incinerated or exported (although the export markets are getting smaller).

Part of the government’s proposed solution, aimed at eliminating avoidable plastic waste by 2042, is the Plastic Packaging Tax (PPT). But the first time I’d heard of this tax was when I was recently chatting with a client who works for a pharmaceutical packaging manufacturer.

Originally introduced in April 2022 at a rate of £200 per tonne of plastic packaging, the levy was increased in April of this year to £210.82 per tonne. It was raised in line with the Consumer Price Index.

Now, when we say plastic packaging, this tax applies to packaging that is made up of less than 30% recycled material. All UK producers and importers are subject to PPT.

What this tax aims to do is provide a clear economic incentive for businesses to make their plastic packaging using recycled materials, which will create a greater demand for recycled plastics. In turn, this will promote more collection and recycling of plastic waste, diverting it away from landfill and incineration. Logic dictates that the more demand there is for recycled material, the more investment there will be in recycling facilities.

Although from my conversation with another client who – entirely coincidentally – imports pharmaceuticals from China, it sounds like the supply hasn’t yet caught up with the demand, leaving smaller businesses to pay more tax as the ‘big boys’ buy up all the available recycled materials for their own use.

As always, there are exemptions to the tax. These include packaging with a longer-term primary use (like DVD cases, although who’s buying DVDs these days?) and items where the contents are reliant on the packaging (like printer cartridges and tea bags. Yes, I said tea bags. Not going to look at my Tetley in quite the same way again…).

Clearly the Plastic Packaging Tax is aimed at the top of the supply chain. It’s likely that you’ve also recently heard about measures taken by the government aimed more directly at consumers. Several single-use plastic products were banned in England in 2020 including straws, hot drink stirrers and cotton buds and the ban was extended at the beginning of this month.

Business are no longer allowed to sell plastic cutlery, balloon sticks and polystyrene cups. Consumers will also no longer be able to buy single-use plastic plates, bowls and trays, unless they come with prepared food. So, your takeaway treat may still arrive looking the same, but you won’t be able to find plastic bowls and spoons next time you’re looking for party supplies in the shops.

There’s a long way to go – including items like single-use plastic packaging in supermarkets on your salad, fruit, snacks and ready-meals – but each step is moving in the right direction and will hopefully shift our attitudes towards plastics, both as consumers and corporations.