Draft legislation: Plastic packaging tax — chemical recycling and adoption of a mass balance approach
Consultation description
The draft Regulations set out the conditions that businesses must meet if they wish to use a mass balance approach to account for chemically recycled plastic for Plastic Packaging Tax (PPT) purposes from 1 April 2027. The draft reference document sets out the methodology for applying dual-use factors where required. Both should be read alongside the relevant provisions of the Finance Act 2021, as amended by the Finance Act 2026, in particular sections 49, 49A and 49B.
This technical consultation seeks views on the drafting and technical application of the draft Regulations and reference document to ensure they deliver the policy as intended. This consultation may be of interest to:
- businesses intending to use a mass balance approach to account for chemically recycled plastic for PPT purposes
- businesses in the supply chain that may need to obtain certification
- certification bodies and certification scheme operators intending to provide schemes that meet the minimum PPT requirements
The draft secondary legislation sets out the detailed provisions and conditions for using a mass balance approach under a certification scheme to account for chemically recycled plastic for PPT purposes. This includes requirements relating to attribution methodology, certification, auditing, monitoring and record keeping. The draft Regulations also provide for further operational detail to be specified in notices published at a later date. In general, these are expected to reflect relevant industry and ISO standards.
The reference document, ‘Dual-Use Factors for Refinery and Petrochemical Output Products’, covers the classification of output products, how to determine the dual-use factor (DUF) for each output product and the use of default values where appropriate. The default values will be confirmed before the final legislation and reference document are published.