The UK government’s Plastic Packaging Tax (PPT), introduced in April 2022, aims to incentivise using recycled materials in plastic packaging and reduce plastic waste.
As of April 1, 2025, the PPT rate will increase to £223.69 per tonne for plastic packaging containing less than 30% recycled content.
Background of the Plastic Packaging Tax
The PPT was established to encourage businesses to incorporate more recycled plastic into their packaging processes. Initially set at £200 per tonne in 2022, the tax rate has been adjusted annually in line with the Consumer Price Index (CPI) to maintain its effectiveness.
Upcoming Rate Increase
In the Budget announcement on October 30, 2024, the Chancellor confirmed that the PPT rate would rise to £223.69 per tonne from April 1, 2025. This adjustment reflects the government’s commitment to aligning the tax with inflation and continuing its environmental objectives.
Key Updates and Implications
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Mass Balance Approach for Chemically Recycled Plastic: The government has responded to industry feedback by allowing a mass balance approach to account for chemically recycled plastic under the PPT. This method enables manufacturers to attribute recycled content based on input estimates, potentially facilitating increased use of recycled materials in packaging.
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Redefinition of Recycled Content: Concurrently, the definition of recycled content is being refined. Pre-consumer waste will no longer be classified as recycled plastic for PPT purposes, closing a loophole that previously gave some businesses an unfair competitive advantage.
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Exemption for Human Medicines Packaging: The exemption for the immediate packaging of licensed human medicines will remain in place for the foreseeable future, acknowledging the critical nature of these products.
Industry Reactions
The recycling and waste management sector has expressed disappointment over the modest increase in the PPT rate. Industry leaders had advocated for a more substantial escalation to £500 per tonne and a 50% recycled content threshold over the next five years to drive higher recycling rates for plastics. They view the current increase as a missed opportunity to strengthen the market for recycled plastic and advance circular economy ambitions.
Preparing for the Change
Businesses involved in the manufacture or import of plastic packaging should take proactive steps to comply with the upcoming changes:
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Assess Packaging Materials: Evaluate current packaging to determine the percentage of recycled content and identify opportunities to increase it.
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Stay Informed: Keep abreast of legislative updates and guidance from HM Revenue & Customs (HMRC) regarding PPT compliance.
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Implement Compliance Measures: Establish robust systems for tracking and reporting the recycled content in packaging materials to ensure accurate tax filings.
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