Tax for plastic packaging but ‘latte levy’ shelved

Hammond hopes the levy will “transform the economics of sustainable packaging.” Source: PA

By Karis Hustad

Plastic packaging will need to be eco-friendly or face a heavy levy, as the UK introduced a new tax on plastic packaging containing less than 30 per cent recycled material – rather than the widely anticipated “latte-levy” on takeaway cups.

In a budget address criticised for being light on environmental measures, the new tax on packaging with a low concentration of recycled material will impact both locally manufactured and imported plastics from April 2022. The Packaging Producer Responsibility System will also be reformed to incentivise producers who design more recyclable packaging and penalise the use of difficult-to-recycle plastics.

Hammond hopes the levy will “transform the economics of sustainable packaging” by pushing the adoption of environmentally conscious packaging. “We must become a world leader in tackling the scourge of plastic littering our ocean,” he said.

The chancellor stopped short of implementing a “latte levy” for now. The measure would have added a tax of roughly 25 pence on single-use takeaway cups. Hammond said the isolated tax – which was widely supported in a public survey earlier this year – would not “deliver a decisive shift” to reusable cups. Instead he will let private enterprises lead the way, watch their progress and and only act if businesses are not doing enough. Beyond single-use, the government is putting £10 million more towards plastics R&D and £10 million to encourage innovative approaches to recycling.

The hesitation does put the UK behind the EU on non-recyclable waste. This week the European Parliament voted for a complete a ban on plastic cutlery and plates, cotton buds, straws, drink-stirrers and balloon sticks by 2021, and called for a reduction in other single-use plastics. While the UK recently introduced a similar measure, the plan is subject to a consultation by Environment Secretary Michael Gove.

The UK throws away 295 billion pieces of plastic every year, the majority of which is single-use and cannot be recycled, according to a report published this week by an environmental campaigner. Recent research showed plastics have been found in human stool which suggests that waste is finding its way up the food chain.

Industry groups were frustrated at the lack of action. “It’s astonishing that the chancellor has gone cold on a ‘latte levy’, just when we needed him to turn up the heat on plastic polluters,” Friends of the Earth plastic campaigner Julian Kirby said. “A tax on virgin plastic packaging would be a welcome step – but if we’re going to stem the huge tide of plastic waste pouring into UK waterways every year, far bolder action is needed.”

Hammond also announced he would allocate an additional £10 million to clean abandoned waste sites.

Fuel duties were frozen for the ninth year straight. While the budget allocated £60 million to fund tree planting to offset carbon emissions, the government will purchase up to £50 million of carbon credits for qualifying tree planting through a Woodland Carbon Guarantee.

There was no mention of an increase to the carbon tax or economic incentives to cut carbon emissions, even as the UK will need to create its own nationally determined contributions (NDCs) post-Brexit.

In June, the Committee on Climate Change’s tenth annual report warned that the Government will miss climate goals despite its new clean growth strategy. Such urgency was echoed in a report, published by the Intergovernmental Panel on Climate Change (IPCC) this month, on the impact of global temperatures rising above 1.5 °C. The panel warned that the next twelve years will be the most critical towards halting irreversible global warming.

Following the IPCC’s findings, 131 MPs – one fifth of the House – signed a letter to Theresa May arguing for zero-carbon targets by 2050. On that point, at least, they will be disappointed with today’s budget.

Print Friendly, PDF & Email

Leave a Reply

Your email address will not be published. Required fields are marked *

Skip to toolbar