Getting ready for the plastic packaging tax ahead of 2022 – we explore the issues


The urgency of the climate change agenda continues to gather momentum and the UK is making strides in waste reduction and the improvement of recycling rates. Large businesses and governments around the world are responding to the burgeoning influence of activists such as Greta Thunberg and the impact of TV documentaries like Blue Planet II.

While consumers can take personal action to avoid single-use plastics, only businesses and brands are able to make decisions that affect the use of plastic across the entire supply chain.

The UK government is set to introduce a new tax on plastic packaging from April 2022 that will prompt producers and high-volume users to consider the alternatives or face a financial consequence.

There is no doubting the scale of the problem. The figures speak for themselves with 2.4m tonnes of plastic being produced and used in the UK annually.

According to WRAP, plastic packaging accounts for 70 per cent of plastic waste which led to the development of the UK Plastics Pact which brings together producers and policymakers to develop new ways to boost recycling and the use of recycled content.

At PDS, we are working closely with our clients and supply chain partners to help everyone prepare for the changes ahead to successfully reduce their exposure to the plastic tax and make a positive contribution to the environment. In this blog, we explore the key issues and provide some pointers.


What is the plastic tax?

From April 2022, producers and users of plastic packaging will need to ensure that it contains at least 30 per cent recycled content by weight. Only those that produce less than 10 tonnes each year will be exempt.

Any packaging that fails to comply becomes liable for a tax of £200 per tonne to be collected by HMRC. Exceptions include plastic packaging for medicines and imported goods as well as those in transit through the UK.

It is anticipated that manufacturers of plastic packaging will pass on their costs to businesses, spreading the load across multiple sectors. The government expects to raise around £240m in year one and forecasts that revenue from this levy will gradually decrease over time as providers find greener alternatives.

The predicted impact of the plastic tax is that 75 per cent of packaging will contain more than a third of recycled content by 2021 (an increase of 50 per cent on 2017 levels). If the tax applies to your business you will need to register with HMRC and put in place processes to collect data, retain evidence and supply details as part of your business tax return.



What type of plastic does the tax affect?

Plastic has become ubiquitous ever since 1907 when Bakelite was first developed by Leo Baekeland in New York. In packaging, it is widely used to make bags and covers, in films and sheeting, and for wrapping and hooding. Many industries rely on plastic packaging such as machine-stretched film for palletised goods, food-grade Dolav liners for specialist containers, and mailing packs to fulfil e-commerce orders.

The tax will particularly affect items where plastic forms a greater proportion of the finished product by weight, such as Easter eggs, for example.

UK retailers have already started to address this by using alternatives including Waitrose whose Easter egg packaging used 80 per cent recycled content this year and Aldi which is switching to pulp trays in a bid to eliminate all plastic packaging from its Easter eggs.

The main types of plastic packaging are:

  • PET – polyethylene (used in water bottles and some food trays)
  • HDPE – high density polyethylene (used in food packaging and carrier bags)
  • PDPE – low density polyethylene (used in refuse sacks and squeezable bottles)
  • PS – polystyrene (used to pack large or delicate items for protection in transit)
  • Bioplastics (made from plant-based ingredients instead of petroleum).

What are the issues facing producers?

This is a complex issue and manufacturers are working on new alternatives all the time. It is expected that the plastic packaging tax will provide further impetus to the development of viable solutions as producers come under pressure from businesses, brands, and consumers.

For the purposes of plastic tax legislation, ‘recycled content’ must include resin produced from post-consumer waste (PCW) also known as post-consumer recycled (PCR) content. Waste generated from the manufacturing process, known as post-industrial waste (PIW), cannot be used to circumvent the tax because its impact on the environment is not as great. Inks, labels, tape, and adhesives mean that post-consumer waste is potentially more damaging to the natural world.


The most significant issue facing manufacturers is that non-virgin polymers create packaging that is not as strong as original materials. It may be possible to switch from using single-layer mono bags to co-extruded (co-ex) bags that encompass three layers (with researchers looking to increase this to five layers). This method enables packaging to trap content that is more than 30 per cent recycled within virgin material to fulfil its strength objectives.

However, this could lead to a concomitant increase in the overall use of non-recycled plastics. With a global shortage of plastics since the explosion in demand for pandemic PPE helping to driving prices up, businesses urgently need to find alternative viable solutions.

Options to boost the amount of recycled content in packaging could include air pillow film or bubble wrap, embossed or void fill paper which works in a similar way, kraft tape which contains no plastic, or cardboard which can itself be recycled. Increasingly, bioplastic alternatives are reaching the market including packaging made from sugar cane, mushroom-root, pressed hay, seaweed, and banana leaves.

However, industry has voiced concerns that these are insufficiently robust. In addition, the carbon footprint of moving raw material like these around the world could outweigh the benefits.

Despite forecast future demand, the availability of suitable PCR polymers currently remains limited from both a technical and supply point of view. The process could benefit from an increase in chemical recycling which uses heat and to convert waste into food-grade though this is not yet being delivered at sufficient scale.

Until robust and scalable solutions containing recycled content are more readily available and affordable, businesses may instead focus on reducing or replacing the overall amount of any type of plastic that they use in packaging. 

How we can help

At PDS, we source, store, fulfil and distribute packaging materials across a broad range of industry sectors from food manufacturing through to retail and promotional. We work closely with our materials specialists to help deliver solutions to plastic packaging challenges and have access to the latest research and newest ideas. As part of our full-service offering we begin with a full audit of plastic packaging use, followed by an in-depth review of the business’ objectives that then enables us to present specific recommendations that align with your business goals.

We are keeping a watching brief on this issue and looking out for further plastic packaging tax guidance due later this year on how the levy will be applied. In the meantime, we can support you through this transition – let’s talk about the implications of the plastic packaging tax on your business.
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