The Government’s Plastic Packaging Tax (PTT) was introduced three months ago, in April, to tackle single use plastic, however, it has already come under fire as campaigners and industry critics are concerned it isn’t working out quite as they planned.
The impact of PPT has never been 100 per cent clear, something to watch in the coming months. It is undeniable that external factors have had an impact on the introduction of the new tax, as it hit the UK at a time when many sectors face significant inflationary pressures affecting the price of goods, energy and materials, along with growing demand for wage increases. Resulting in the tax representing another additional cost for businesses falling above HMRC’s threshold.
However, long before the tax was introduced, thoughts on welcoming the PPT have always been mixed.
Those who have felt they have been hit the hardest is food manufacturers, who have argued that the government has not provided any exemptions for materials that come into contact with food and cannot be recycled. As a result, such businesses have had no choice but to pay the tax, which consequently could lead to increased costs that could then be passed on to consumers. Now the tax has been introduced, for many small businesses especially, it seems the general consensus is that the cost of recycled material is so great now, that they are deciding to take the hit and pay the tax.
While the PPT has had an impact on us at Southgate, we are still very welcoming of the change, and we already see the positive impact. For example, over the past three months the PPT has meant we have been able to move what was previously virgin products to what is a minimum of 30 per cent recycled. Plus, only around 15 per cent of our products are taxable now, which certainly proves that the tax can have a positive impact.
As the UK’s levels of virgin plastic continue to rise, it’s important to focus on the long-term benefits of this new tax and as one of the top five processors of plastics in Europe, the introduction of the bold new tax might still be the ultimate solution the industry was waiting for.
As it provides clear incentive for businesses to use recycled material in the production of plastic packaging, we’re excited to see the benefits as we protect ecosystems, save energy, reduce the demand for raw materials and cut carbon emissions.
Once the initial adjustment starts to settle and external challenges hopefully level out, we look forward to watching the industries involved in plastic production working together to introduce solutions that protect our environment and support circular economy principles. With the use of virgin plastic dropping, we’ll be sure to see the benefits as we protect ecosystems, save energy, reduce the demand for raw materials and cut carbon emissions. This is an exciting time for positive change, and we plan to continue to educate and support our customers and demonstrate the benefits while working with them to develop new products.