UK food manufacturers: Global shortage of food-grade recycled resin makes it difficult to comply with plastic packaging tax

From April 1, 2022, the United Kingdom will officially impose a plastic packaging tax of £200 (about 1,900 yuan) per ton on plastic packaging that is manufactured or imported into the UK in an annual volume of more than 10 tons and uses less than 30% of recycled plastic
.
However, many food manufacturers have objected to the implementation of the new packaging tax in the UK
.

Three categories of products are exempt from tax

It is understood that there are three categories of products that are defined as not within the scope of taxation, and enjoy tax exemption regardless of the proportion of recycled materials used
.
The first category is that the product in the package needs to be used together with the package throughout the product life cycle, such as: tool kits, first aid kits, earphone or earplug cases, nail art sets, glasses cases, CD, DVD and video game cases, board game cases, etc.

.

The second category is packaging that is an integral part of the product, including water cartridge filters, printer or toner cartridges, inhalers, tea bags, room deodorants, perforated rice bags, lighters, dental floss boxes,
etc.
The third category is designed to display commodities, including commodity shelves, commodity display stands,
etc.

Questions about the new packaging tax continue

Public information shows that many food manufacturers have raised objections to the implementation of the new packaging tax in the UK, because it will force them to raise prices and may increase inflation
.
Several major food companies and industry representatives are understood to have told the FT that businesses are having difficulty understanding and complying with the plastic packaging tax, which will take effect on April 1
.

The food manufacturers said the government did not provide any exemptions for materials that come into contact with food and cannot be recycled
.
As a result, these businesses have no choice but to pay the tax, a move that increases costs that may be passed on to other businesses
.

Image from: Financial Times

Nicky Hunter, Director of Sustainability at the Food and Drink Federation, said: "Food and drink manufacturers want to do the right thing and recycle more packaging, which is in line with the UK government and our own environmental targets
.
The production of food-grade recycled resin is very limited globally, and the end result is that companies bear more costs, which may lead to higher consumer prices
.
Our industry hopes that the government will take measures to further support and encourage recyclable packaging.
material innovation
.
"

According to the ICIS Mechanical Recycling Supply Tracker, food-grade resins currently account for only 10% of the global annual capacity of over 45 million tonnes of recycled polymers
.
The study included recycled polyethylene terephthalate (rPET), recycled polyethylene (rPE), and recycled polypropylene (rPP)
.

Image via: Recycling Today

Helene Roberts, chief executive of Robinson Packaging, a plastics recycling company, and head of the plastics and flexible packaging group at the British Plastics Federation, said inflation would be an unintended consequence of the tax
.

It argues that food-grade items that cannot use recycled plastic — such as soup plates — should be exempt until technology advances in a few years
.
"It just creates inflationary pressures in the supply chain,
" Helene Roberts said
.

Advisers to RSM, a leading global accounting firm, said the new tax would affect a wide range of businesses, including retailers importing items such as luggage liners, beverage bottles and tote bags, publishers importing plastic for laminated books, and importing foam.
Freight suppliers of plastic packaging such as blister paper, but food manufacturers will be among the hardest hit
.

Importers will also find it "difficult and expensive" to obtain proof of recycled content in packaging from overseas suppliers, warns Andrew Thurston, a customs adviser at MHA, another accounting group
.
This could lead businesses to ignore calls to use more sustainable materials
.