“This is a tax I’d rather you didn’t pay,” said Mark Palmer from HMRC, in a run-through of the plastic packaging tax (PPT) at this week’s environment seminar run by the Foodservice Packaging Association.
Palmer wasn’t advocating tax evasion of course; rather that all businesses would use packaging with 30% recycled content. That would require a doubling of UK processing capacity (to 460,000 tonnes), which won’t happen fast.
In fact, sky-high prices for recycled plastic are likely to see some brands shouldering the £200 per tonne tax instead. Whether they’d be more willing to do so if the revenues raised were channelled back into funding new UK infrastructure to plug the capacity gap is moot.
Indeed, there appeared to be renewed support for the FPA and others to lobby the Treasury to hypothecate (or ring-fence) the PPT. Steve Morgan from charity Recoup also suggested tax revenues could help fund a verification scheme for recycled content claims.
Many big food firms have set their own targets to achieve certain levels of recycled content in their plastic packaging. As the prices for plastics, like rPET and rHDPE, keep increasing and supply is squeezed, some companies are “struggling to cope”, explained Egor Dementev, senior analyst on plastics recycling at ICIS.
Could we see a roll back on voluntary commitments? That would have seemed “unimaginable” just a couple of years ago but these conversations are going on as records for recycled plastic polymers keep getting broken, noted Dementev. It would be very difficult to water down any targets but he doesn’t see anyone setting more ambitious goals for the moment.
Some brands are switching to virgin plastic, he added, and prices are not going to fall. Neatly summing the situation up as a “melting pot of fundamentals”, Dementev rolled out a long list of factors for businesses to watch in the coming 12 months. Feedstock prices and substitution, inflation and energy costs are all creating a “volatile environment”.