As a society, we are still dependent on plastic for our packaging needs. Since its adoption as a packaging substrate in the 1950s, the nation’s appetite for plastic has continued to grow. Around 70 years later, it’s estimated that in 2017, 2.4 million tonnes of plastic packaging was in circulation in the UK marketplace.
In recent times, consumer attitudes have proved volatile, rapidly shifting against the use of single-use plastic packaging. This is in part due to increased consumer awareness of plastic pollution that has been broadcast in the media, highlighted in documentaries and published in scientific studies. Whether plastic is the main culprit of pollution or not, it has become a key point of focus.
In a bid to tackle the nation’s demand for plastic and support global efforts to create a greener world for the future, the UK government proposed a new tax on plastic packaging in 2018 which formed part of their ambitious 25-year environment plan.
The Plastic Packaging Tax
The new tax targets large volume UK plastic packaging producers, importers, business customers and consumers – with some exemptions for smaller businesses to mitigate disproportionate administrative burdens.
The tax applies to plastic packaging produced or imported into the UK that does not contain at least 30% recycled plastic. Following consultations in 2020, the government published that any packaging not containing at least 30% recycled plastic would be taxed at £200 per tonne and set out the process on how the tax will be collected, recovered and enforced. Therefore, any plastic packaging that contains recycled plastic over the 30% threshold will be exempt.
The government’s objective for the policy is to provide a clear economic incentive for businesses first to encourage the packaging industry to move to non-fossil fuel-based materials and secondly, should it need to utilise plastic, then to ensure the use of recycled material in the production process. In turn, it is expected that this will generate greater demand for sustainable solutions, as well as stimulating increased levels of recycling and collection of plastic waste, diverting it away from landfill or incineration and further supporting the drive towards a circular economy.
However, as with all change, there are macro- and micro-environmental influences to consider. Are brands, manufacturers, retailers and other supply chain partners in a position to develop these solutions and iron out packaging design and construction challenges in time for policy changes in April 2022?
One of the main benefits to come out of the new tax is that it seems to align very much with the mood of the public. The view of the consumer is central to its proposition, and this national mindset is encouraging the supply chain to take action.
For years, the media has vilified plastics in a narrative that has often seemed one-sided, when packaging ultimately protects and preserves goods. The reality is that sustainable alternatives and plastic innovation have surged to the forefront – so in many ways, the plastic packaging we see today is not the same as it was when the discussions first began.
Regardless, the threat of imposition of the new tax further drives innovation in substrates inspiring businesses to accelerate their efforts towards a greener packaging sector.
Closing the gap
We all know that innovation doesn’t come cheap, and that can rightly be said about sustainable substrates. In most cases, newly developed substrates do not yet have the market longevity to benefit from economies of scale production. Many are burdened by development costs which makes them unable to compete against commodity plastics – a proven, cost-effective packaging solution with known benefits.
The high cost of these substrates has a significant impact on brand profitability, which has proved to be a barrier for some adopting these materials as a replacement to their current packaging formats. In essence, the new tax will work to close the gap between new sustainable materials and the standard plastic counterpart – creating a more level financial playing field for new packaging designs to compete.
Brands have been aware of the new tax and its timescales since 2018; some may argue that this has given them enough time to find alternative sustainable solutions and in the past 18 months, leading brands, retailers and packaging specialists have announced significant developments in delivering new designs.
For example, the European division of the global drink brand Coca-Cola announced its first paper bottle prototype in October 2020. This first-generation paper bottle includes a plastic closure and thin plastic lining made from 100% recycled polyethylene terephthalate (PET), making the bottle 100% recyclable. Although Coca-Cola’s prototype bottle still contains plastic elements (recycled PET), the overall plastic content has been significantly reduced.
Another key example of leading the charge in sustainable packaging innovation, this time for the flexible packaging sector, is Parkside with its Park2Nature range of home and industrial compostable packaging formats. Park2Nature comprises a diverse range of flexible laminates that meet the needs of a wide range of food product applications. It has already proven success with the likes of Taylors of Harrogate, Riverford Foods and Real Nutrition.
While composting cannot meet the needs of the circular economy from a classical recycling perspective, it can be argued that composting is bio-recycling. It is therefore ideal for those flexible packaging applications that cannot either incorporate post-consumer recycled materials, or ultimately be recycled in today’s waste infrastructure, due to the multi-material nature of the product.
Although great strides have been made towards creating recycled plastic packaging solutions in time for the introduction of the new taxation, there are numerous hurdles and complexities still to address and resolve throughout the supply chain.
The second part of this blog series will examine some of the adverse factors impacting the implementation of the Plastic Tax.