In the March 2020 budget, the UK Government announced a tax on plastic packaging which will take effect in 2022. A £200/t tax will be levied on plastic packaging with less than 30% recycled plastic content. The tax will be levied on UK users of plastic packaging, with an exemption for producers and imports of small quantities (less than 10 kt of plastic p.a.). While the tax represents additional tax revenue in the short to medium term, the goal is to encourage the use of recycled plastic packaging and other sustainable options.
Tax revenues are expected to fall as switching from virgin plastic packaging increases. In recent years, overall plastic packaging use has declined faster than consumer spending. The plastic tax is expected to accelerate this trend, in particular for virgin plastic packaging. In this Insights, Simon Ede, Yassir Ahmed, E Wah Wan, and Kitty Stacpoole analyze how the new policy on plastic packaging creates risks and opportunities for UK companies.
Learning from the leaders: Value creating strategies in the chemical sector
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