New recycling tax set to drive up use of… plastic ...Middle East

The Government’s long-awaited packaging recycling scheme, due to come into effect this autumn, will lead to a major increase in the use of unrecyclable plastic bags and bottles, The i Paper can reveal.

Ministers waved through the new recycling policy at the end of 2024 that will place green levies on packaging used by retailers and producers in an effort to drive down plastic waste and improve the environment.

But major glass and paper manufacturers have told The i Paper that under the current design of the scheme, the policy will lead to a significant increase in plastic packaging rather than reduce it.

According to industry leaders, plans to charge companies by the weight of packaging used, rather than the number of packaging units, will see retailers and producers switch to lighter plastic wrapping to avoid the extra levies.

The policy, known as the Extended Producer Responsibility (EPR), was originally designed by the previous Conservative administration but was finally pushed through into law by the current Labour Government in December.

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It has prompted glass and paper manufacturers to call on ministers to rethink the scheme before it comes into force in the autumn or risk overseeing a rise in damaging plastic packaging.

Andrew Large, director general of the Confederation of Paper Industries, said: “The Government’s EPR policy goes against the Secretary of State’s ambition to reduce plastic waste.

“In its current form, EPR will drive producers to use more plastic, which will be cheaper than more sustainable packaging materials such as paper or card, due to the EPR fee structure that the Government has chosen.”

Large added: “I urge the Government, even at this late stage, to think again. We would like to see reform to the EPR fee structure so that it promotes sustainable and recyclable packaging materials, and reduces unrecyclable waste.”

His comments were echoed by Dave Dalton, chief executive of British Glass, who warned: “The new administration has waved through policies, such as the Extended Producer Responsibility scheme, that will see retailers and brands move away from endlessly recyclable material, such as glass to plastic because Government are basing the packaging fees paid by businesses, ultimately the consumer, on the weight of packaging rather the number of units of packaging.”

According to British Glass, the design of the scheme will mean glass bottles will incur a levy of 6.4 pence per 330ml container, while plastic bottles and aluminium cans will attract no additional cost. Dalton suggested it could mean brewers increasingly moving away from using beer bottles to cheaper cans.

Major retailers, including supermarket chains, are understood to be privately against the policy design but have yet to speak out against the scheme.

Pippa Heylings, the Liberal Democrats’ Energy Security and Net Zero spokeswoman criticised Tory changes to scheme, adding: “The devil is always in the detail, and it would be highly counterproductive if these unintended consequences came to pass. 

The Government should look carefully at any perverse, unintended consequences and work with partners to make sure this scheme design delivers less plastic pollution, not more.”

Estimates by the British Retail Consortium put the cost of the green levies on plastic packaging at around £2bn a year, which is likely to be passed on to the consumer in price rises.

The scheme was first put forward by Michael Gove, during his time as environment secretary, under what he described as a “polluter pays” policy.

The idea was for companies, rather than local authorities, to bear the cost of recycling waste, but experts believe the cost will ultimately be passed on to consumers at the till.

The Department for Environment, Food and Rural Affairs (Defra) said it was “committed to cracking down on waste and boosting recycling, with the extended producer responsibility for packaging being a vital first step for our packaging reforms”.

“From year two of the scheme, we will introduce discounts to favour the most recyclable materials, including the vast majority of glass packaging, while unrecyclable alternatives will incur higher fees,” a Defra spokesman said, adding: “The Government will continue to work closely with businesses, on our packaging reforms programme, which together will create 21,000 jobs and help stimulate more than £10bn investment in recycling over the next decade.”

The Extended Producer Responsibility scheme

The snappily titled Extended Producer Responsibility scheme has been long in the pipeline for the food and drinks industry, but it has not become any less controversial despite the lengthy lead-in time.

The policy was first put forward in 2018 by Michael Gove during his time running the Department for Environment, Food and Rural Affairs (Defra), as he set out his “polluter pays” principle, which would introduce a circular economy for packaging, wiping out waste and reducing emissions in the process. 

Rather than local authorities incurring the costs for recycling packaging produced by major companies, Gove believed it should be the companies themselves that pay to clean up their own mess with the introduction of a new levy.

While it appeared a simple enough idea at first, the policy has been beset by problems and delays as it has become clear that it will be the consumer who pays in the end. 

Under the eventual terms of the scheme, any UK company that has an annual turnover of more than £1m and manages 25 tonnes of packaging each year will have to abide by the new EPR rules, which include reporting their packaging data to Defra. 

But it is firms with more than £2m in turnover and producing 50 tonnes of packaging, known as “large producers”, that will have to pay the new levy. 

The policy was meant to be introduced under Rishi Sunak, but concerns around the cost of living crisis and adding to what was rampant inflation at the time meant it was delayed. 

The new Labour Government has pushed ahead with the plans, passing the final piece of legislation required to enact it in December. 

Producers are expecting the list of fees for each material to be published in July, with the levies being imposed by October.

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