Covid-19 may have put government policies on ice, but anyone hoping they will melt away is set for disappointment, argues Sancroft International’s Felix Gummer.
The Covid-19 outbreak has caused the largest disruption to business in the UK since the Second World War. The plastics and packaging industry is certainly no exception, but it would be a mistake to think that the drivers for change in government policies and business commitments have gone away. At most they have only been put on hold. There are businesses with vested interests who will be making the case for a dilution of the current government policies and that is their prerogative. However, they assume that this will be ultimately successful at their peril.
The environmental imperatives and their graphic depiction that led us to this point have not gone away. Indeed, the current crisis has made the world much more conscious of human impact on the environment. That is why climate change, loss of biodiversity, and other damage to the planet is often second only to Covid-19 updates in the news. Our current lockdown and consequent relative inactivity is already seen to have a stark effect on nature.
When we emerge from this virus, the government will still be on the hook to deliver on these issues. Firstly, they still have the same looming deadlines and targets on plastics, set by the EU and translated into British law. They have promised to maintain these standards, even exceed them. They are determined not to incur the inevitable reputational damage of falling behind the EU.
Secondly, the clock also continues to tick on the deadline of the current packaging recovery note (PRN) system. The government does not have the choice of kicking the can down the road.
However, perhaps the most important reason is the government needs the money. If cash were sorely needed before the crisis, it will be desperately needed now. The plastics tax will be a nice little earner and a green tax to boot. Whatever the percentage of recycled content they set initially, once the tax is implemented there will be an almost irresistible temptation to increase it to raise more money.
Extended producer responsibility (EPR), whereby businesses pay the full net cost of recovery for packaging placed on the market, is the next piece in the economic jigsaw. The higher the recycling rates, the more industry will pay, as more waste is diverted from our black bins into recycling streams. Have no doubt, the money that industry will pay to local authorities to perform recycling services will soon be taken out of councils’ grants by the Treasury.
Yet, not all will be exactly the same. There are two areas where the current crisis may cause some change in attitudes.
The first is plastic reduction. Last year, businesses were being asked to sign up to plastic reduction targets and, frankly, many signed without knowing how they would meet them, knowing that not to do so would undermine their reputation. Today’s huge focus on plastic PPE and the safe handling and preservation of food will change the debate so that it recognises the value of plastic. But, this will increase demands towards the removal of unnecessary material and an insistence on the necessity of recycling.
The second is deposit return schemes (DRS). It would be foolish for businesses not to engage with and plan for DRS, probably firstly in Scotland and then rolled out across the UK. However, the minimum £1bn start-up cost and similar annual running cost may well give the UK government pause for thought. This Conservative administration may, in the end, baulk at this cost to industry, not least because a DRS system would not benefit the exchequer in any way.
Felix Gummer is a director at Sancroft International
