Veolia's UK subsidiary is calling on British policymakers to shore up recycled plastics markets and provide the recycling industry greater certainty on green policies by committing to substantial increases in the country's plastic packaging tax (PPT). The tax, which went into effect in April 2022, currently stands at £217.85 per tonne (ca. €254/t) and is levied on plastic packaging with a recycled content of less than 30 per cent. Veolia UK argues that to provide sufficient incentive for the use of recycled plastics, the tax should be raised to £500/t for producers who do not incorporate 50 per cent recycled plastic in their packaging.
By increasing both the tax and the recycled content threshold, government could ensure that the less sustainable choice was made more expensive, said the environmental services company in a recent position paper, "Resource the Future; Plastic Packaging Tax". In the paper, the company describes the tax as "a critical lever to incentivise recycled content and address the uncertainty that is the boom and bust periods the industry is currently facing". But at the current level, the tax is not achieving its aims, in Veolia's view. The average recycled content of plastic packaging entering the market was only 22 per cent, according to data collected for the project by the environmental NGO Wrap (Waste Action and Resources Programme).
Veolia recommends a phased increase in the tax rate and recycled content thresholds over the coming years. In the short term – before the end of 2024 – the recycled content required for exemption from the tax should be raised to 35 per cent and the tax itself be hiked to £275 per tonne. Over the next five years, the rates should undergo a further escalation to 50 per cent recycled content and £500 per tonne. Tax revenues could be reinvested into recycling innovation and infrastructure development, the company wrote. They estimate that the changes would result in carbon dioxide emission savings of 1.8 million tonnes per year.
To produce the needed recycled content for British packaging domestically, a total investment of around £1.1bn would be required. Estimated at around £900m, the largest cost item would be the 30 new facilities needed to reprocess an additional 621,000 tonnes of plastic waste per year. The number of specialised plastic waste sorting plants would also have to be doubled from 10 to 20, incurring investment costs of around £200m.
However, Veolia noted that there were also costs associated with a failure to act. The UK had set binding net zero targets for 2050 and commercial players on other markets were moving ahead. Recalling that both the EU Single Use Plastics Directive (SUPD) and the forthcoming Packaging and Packaging Waste Regulation (PPWR) set minimum recycled content requirements for plastic packaging, Veolia said: "Falling behind European targets will disadvantage UK brands, manufacturers and recyclers who trade across both UK and European markets".
Increasing incentives for recyclate use and investment in recycling, on the other hand, would cut CO2 emissions, create around 2,500 "green collar jobs" and ensure a level playing field for UK businesses trading across Europe and around the globe, according to Veolia UK.
A similar call for higher PPT rates was made by the Environment Services Association (ESA) after the release of the government's spring budget report. ESA executive director Jacob Hayler said "escalating the plastic packaging tax, and perhaps a widening of this tax to all forms of packaging, remains a crucial policy instrument". The association, of which Veolia is a member, represents the private sector waste management industry in the UK.
