Consultation outcome

Plastic Packaging Tax - chemical recycling and adoption of a mass balance approach

Updated 30 October 2024

1. Foreword

We would like to thank all those who took the time to respond to this consultation. The breadth and depth of expertise and insight offered from organisations representing the plastics value chain, environmental groups, academics and others has been pivotal to building a robust evidence base and clear case for change. 

Delivering economic growth is the government’s defining mission. Achieving our ambitions to drive growth and raise living standards for everyone will require ambitious cross-cutting action across many policy areas and partnership with business. That is why in this Budget we have published a Corporate Tax Roadmap , and committed to publishing a 10-Year Infrastructure Strategy. This will provide the certainty and stability businesses need to invest in Britain’s future.

Part of our commitment to create the right fiscal conditions for investment and growth includes acting on the evidence provided through this consultation, which shows there is an opportunity to adapt the Plastic Packaging Tax to help create the conditions for the emerging chemical recycling sector to thrive in the UK. Some of these innovative technologies have been researched and developed here in the UK and offer considerable potential to support our circular economy ambitions by recycling more of our plastic waste and producing high quality recycled material, which could be used to package goods in regulated sectors, such as food and drink.  

Policy certainty is key to unlocking further investment in recycling infrastructure projects like the UK’s first commercial scale chemical recycling plant in Teesside, which is helping to divert traditionally difficult-to-recycle plastic packaging from landfill and incineration. This document confirms the government will proceed with allowing businesses to use a mass balance approach to calculate the recycled content in chemically recycled plastic for the purposes of the Plastic Packaging Tax. This approach draws on the views and evidence provided by respondents to strike the right balance between creating the conditions for further innovation and investment, whilst protecting the integrity of the Plastic Packaging Tax.  

The government looks forward to drawing on the expertise of stakeholders to develop and confirm the detailed policy on a mass balance approach for chemically recycled plastic within the Plastic Packaging Tax, and will publish draft legislation in due course.  

James Murray, Exchequer Secretary to the Treasury   

Mary Creagh, Minister for Nature and the Circular Economy  

Sarah Jones, Minister for Industry

2. Introduction

In April 2022, the previous government introduced a tax on plastic packaging to provide an economic incentive for businesses to use recycled plastic in the manufacture of plastic packaging. The aim of the tax is to increase demand for recycled plastic and in turn stimulate increased levels of recycling and collection of plastic waste, diverting it away from landfill or incineration.

The tax complements wider government policies for tackling plastic waste such as Extended Producer Responsibility (EPR), Deposit Return Scheme (DRS), and Simpler Recycling.

Previous consultations during the design and introduction of the Plastic Packaging Tax include:

• Call for Evidence – Tackling the plastic problem: using the tax system or charges to address single-use plastic waste (March 2018)
• Plastic Packaging Tax Consultation (February 2019)
• Plastic Packaging Tax Policy Design Consultation (March 2020)

Plastic Packaging Tax is not charged on plastic packaging components which contain at least 30% recycled plastic. Both mechanically and chemically recycled material can contribute to meeting this recycled content threshold. However, due to the nature of chemical recycling it is not always possible to determine the actual amount of recycled material in a specific output from the process.

Some chemical recycling processes break down plastic to a molecular level to produce a recycled feedstock capable of replacing virgin fossil based raw materials in the production of plastic. This recycled feedstock can be mixed with virgin feedstock to make the chemical compounds which are then used to make plastic. Once the virgin and recycled feedstocks are mixed, it is no longer possible to differentiate between the two substances, and the respective outputs cannot be supplied separately.

A mass balance approach is a chain of custody model that is used by industries to track materials through a complex value chain. It enables recycled or sustainable inputs which are mixed with virgin material during the process to be allocated to particular outputs. The approach is commonly used in sectors such as timber and cocoa to allocate sustainably sourced material to products. In sectors such as biofuel, the use of chain of custody models has helped drive the development of renewable production processes and increase the overall share of renewable energy. 

Chemical recycling can complement the use of mechanical recycling technologies by enabling more types of plastic to be recycled and by producing a higher grade of recycled plastic, which can be used in regulated sectors such as food contact packaging. Chemical recycling therefore has the potential to help increase rates of plastic recycling.

A report produced by the Waste and Resources Action Programme (WRAP) on ‘The Plastics Waste Hierarchy’, which is endorsed by the Department for Environment, Food and Rural Affairs (DEFRA), confirms that recycling can be either a mechanical or chemical process, and that mechanical recycling is the best option for end-of-life treatment for plastic waste. The report also acknowledges that chemical recycling can complement mechanical recycling by accepting plastic waste which may otherwise have been sent to incineration or landfill because mechanical recycling is not economically or technically feasible. The report confirms that mechanical and chemical recycling is preferable to sending waste to landfill or energy from waste facilities in most cases.

2.1. Current consultation 

On 18 July 2023, the previous government launched a consultation on chemical recycling and the adoption of a mass balance approach for the purpose of the tax. The consultation closed on 10 October 2023.

To explore options for adopting a mass balance approach to account for chemically recycled plastic for the purpose of the tax, whilst ensuring the tax continues to meet its objectives, the previous government sought views on the following areas through the consultation:

• different chemical recycling technologies
• the rational for a mass balance approach
• environmental impacts
• mass balance models
• how certification schemes would operate
• accreditation of certification bodies

The previous government also sought views on the use of pre-consumer waste as recycled plastic and the exemption for the immediate packaging of human medicines.

2.2. Overview of consultation respondents

We received a total of 91 written responses:

• 25 were from trade bodies/business representative organisations
• 42 were from businesses
• 7 were from non-governmental organisations (NGOs)
• 17 were from other stakeholders including individuals

3. Responses

3.1. Mass balance approach

Question 1: Do you agree that it is possible to determine actual recycled content in products using the outputs of chemical recycling processes which produce a polymer, such as depolymerisation and dissolution? Please give reasons for your answer. 

Just under half of respondents did not answer the question or said they did not know if it was possible to determine the actual recycled content for chemical recycling process that produce polymers. Of the remaining respondents, a majority indicated it was not possible because processes that produce monomers, including depolymerisation, would require a mass balance approach to account for and verify recycled content.

One respondent suggested that use of a mass balance is not needed for depolymerisation if polymerisation happens in the same process and the output product is not mixed with virgin feedstock in a larger polymer plant.

Several respondents suggested dissolution would not need a mass balance approach as the output from this process is a polymer which can directly be used to make plastic products. Respondents also mentioned the importance of labelling chemical recycling processes correctly, highlighting that dissolution is not widely considered a chemical recycling process as it does not breakdown the polymer chains and is more like mechanical recycling.

Question 2: How should chemical recycling be defined for the purpose of using a mass balance approach for Plastic Packaging Tax?

Several respondents highlighted that chemical recycling should be defined as a process for breaking down plastic waste to its molecular components to produce raw materials or monomers for use in the production of new products. Several trade bodies added that the definition should exclude products that are used for fuel or as a means of generating energy; aligning with the definition developed by The European Coalition for Chemical Recycling. Other respondents highlighted the existing definitions of chemical recycling included in ISO 15270:2008 Plastics - Guidelines for the recovery and recycling of plastics waste.

It was also suggested that chemical recycling processes should be classified as either short loop recycling - processes that produce single or dual outputs such as monomers or polymers which requires only a few processing steps to produce new plastic; or long loop recycling which produces multiple output products such as oil or gases that require multiple processing steps to produce new plastic.

A majority of respondents said the definition should be technology neutral due to developments in new technologies as this would future proof legislation and not stifle innovation.

Question 3: Do you agree that the production of a recycled substitute for virgin feedstock to a cracker is the correct test for when calculations using a mass balance approach should be accepted for the purposes of Plastic Packaging Tax? If not, what test should be used? 

A third of respondents either didn’t answer the question or did not know if production of a recycled substitute for virgin feedstock to a cracker is the correct test for when calculations using a mass balance approach.  The majority of the remaining respondents did not agree that it was the correct test with the majority saying the test should not be based on the cracking process and should be technology neutral. Other respondents suggested it should be based on processes that use a mixture of recycled and virgin feedstock to produce multiple output products. Some respondents also mentioned that due to the complexity of the petrochemical process, the use of a mass balance calculation should not be confined to the point of entry into the cracking process. It was also suggested that packaging convertors should be allowed to use a mass balance approach to allocate recycled plastic to products to avoid creating unnecessary complexity.

One respondent explained that due to the polymerisation process, the polymer pellets may actually contain a mixture of other polymers, for example polyethylene pellets may contain 90% polyethylene and 10% other polymers. The packaging converter highlighted that a business could only base the 30% recycled content calculation for the tax on the original allocation to polyethylene and not the other polymers.

Question 4: Are there other chemical recycling methods or processes for which a mass balance approach is required to account for the recycled content in the outputs? Please provide details and examples.

Several respondents highlighted that processes that produce a feedstock or monomers, such as solvolysis would need to use a mass balance approach. Another view suggested enzymatic recycling may also require a mass balance approach to account for recycled plastic.

One business organisation suggested that a mass balance approach should not be encouraged when accounting methods that maintain identity preservation are viable. However, it said a mass balance approach should be used where segregation of recycled output is not possible due to mixing in the cracker or refinery.

Government response

The government is grateful for the information received from respondents on the different types of recycling technologies, the scope to determine the actual amount of recycled plastic, and the existing definitions for chemical recycling.

The government agrees that the definition of chemical recycling should be technology and process neutral to support innovation and allow for the development of new technologies. The government also agrees that the definition should exclude products that are used in the production of fuel or the generation of energy. Given this, the government does not intend to adopt the definition of chemical recycling included in the ISO standard 15270:2008.

The government intends to introduce a definition of chemical recycling in line with the proposed definition by the European Coalition for Chemical Recycling, for the purpose of the tax. This will enable businesses to use a mass balance approach to account for recycled material produced from any technology or process that meets the definition of chemical recycling.

The rationale for a mass balance approach

Question 5:  What evidence are you aware of regarding the overall environmental impact of chemical recycling and use of the mass balance approach?

Question 6: How does the carbon impact of chemical recycling compare with the impact of using virgin material to produce plastic, and with disposing of waste plastic through landfill or energy from waste?

Respondents provided and directed us to a range of studies on the environmental impact of chemical recycling, including several pieces of peer reviewed research published in academic journals. While the various studies recognise that this is emerging technology and therefore evidence is limited, there is generally a consensus in the research which indicates that chemical recycling is preferable to landfill or incineration, but that mechanical recycling is preferable when possible. Chemical recycling is found to be preferable to using virgin material from an environmental perspective. Some environmental respondents questioned whether the level of emissions from chemical recycling undermined any benefits derive from the process.

Question 7: What is the current and planned UK capacity for processing plastic waste through chemical recycling of your business or the supply chains that include your business?

Some of the trade body responses confirmed that while there is potential for additional UK capacity to come onstream in the future, there is currently very limited capacity for chemical recycling in the UK. However, there are several facilities being considered for the future, and many respondents highlighted the importance of a mass balance approach for Plastic Packaging Tax purposes and certainty in other areas of UK waste policy as key factors in making investment decisions (This is explored in more detail in question 10). Several respondents mentioned that at present investment was more likely to be elsewhere in Europe due to a policy environment that is considered to be more favourable, and that initial plans for UK investment have been scaled back. Respondents also reported that the capacity required will differ if the use of plastic needing to be recycled becomes more limited.

Government response

See response to question 16.

3.2. Impacts on UK investment in chemical recycling and the waste industry

Question 8: How would the adoption of a mass balance approach for chemically recycled content for Plastic Packaging Tax purposes impact on investment in chemical recycling in the UK? 

The view of the majority of respondents was that the adoption of a mass balance approach for chemically recycled content for Plastic Packaging Tax purposes would have a positive impact on investment in this technology in the UK. Some recognised the potential for the UK to have a leading role in the emerging chemical recycling industry.

However, while acceptance of a mass balance approach for Plastic Packaging Tax was identified by the majority as an important factor in investment decisions, the availability of feedstock for chemical recycling facilities was cited as being of critical importance. Trade body respondents emphasised the need for a holistic approach to the circular economy, where plastic waste is collected separately and diverted from incineration and landfill. A few respondents did not think that there is any guarantee about where investment may take place, and that allowing a mass balance approach for Plastic Packaging Tax would drive reliance on chemically recycled material rather than the establishment of UK infrastructure. Respondents also explained that the detail of how a mass balance approach would be applied would be important to ensure that chemical recycling was economically viable and to ensure consistent treatment of recycled material internationally.

The opportunity to use recycled material in food packaging where at present it is difficult or impossible to do so was also mentioned as an important benefit of allowing a mass balance approach for Plastic Packaging Tax, from an environmental perspective. Some respondents commented that demand for chemically recycled material suitable for food applications already greatly outstrips supply, but that offering a tax incentive to use this material would reduce the extra cost of doing so compared with virgin material. A large group of respondents were of the opinion that adoption of a mass balance approach for Plastic Packaging Tax could also help in meeting policy objectives to reduce the export of plastic waste and increasing UK materials security.

Question 9: To what extent is any potential investment in chemical recycling in the UK dependent on the specific details of how a mass balance approach may be implemented?

Many respondents cited acceptance of a mass balance approach for Plastic Packaging Tax as a key factor in investment decisions. They reported the need for certainty on details, such as an allocation method that makes economic sense, commenting that proportional and polymer-only allocation would act as an obstacle to any investment. Many respondents also reported that the wider waste policy framework (covered in question 10) also had a significant role to play in investment decisions.

One respondent suggested that the International Sustainability and Carbon Certification (ISCC) Plus scheme, an existing certification scheme for chemically recycled plastic may be more generous than some of the options set out in the consultation. They and other respondents argued that if UK requirements were stricter than those in the EU, those other markets would likely be favoured for investment.

Trade bodies explained that businesses want to use more recycled plastic but are currently unable to source material that meets their needs. Respondents suggest that acceptance of a mass balance approach for Plastic Packaging Tax using a fuel-exempt allocation method will bring a ready market for chemically recycled material. Others answering this question reported the need for transparency and the avoidance of any appearance of greenwashing in the methodology adopted for a mass balance approach, with a few arguing for a polymer only allocation model for this reason.

Question 10: Are you aware of any other factors or policies that could also impact on inwards investment into UK chemical recycling infrastructure?

Many respondents informed us that a coordinated approach encompassing policies such as EPR and consistent collections of waste ensuring availability of feedstocks are key elements in investment decisions. It was also suggested that chemical recyclers should be able to achieve end of waste status for their output products, and that greater clarity in food packaging legislation is needed. The rate of Plastic Packaging Tax and the amount of recycled content required for exemption were mentioned, with some respondents keen to see a plan for the escalation of both over time.

Other impacting factors cited include costs of labour, availability of specialist staff, infrastructure, planning permission and permits, incentives for green technology, environmental law, food contact and cosmetics regulations, Packaging Recovery Notes (PRNs), deposit return schemes, energy costs, refinery location, and the Emissions Trading Scheme (ETS).

Question 11: Do you agree that increased use of chemical recycling of plastic waste would complement the existing mechanical recycling sector, and not disincentivise further investment in mechanical recycling? Please give reasons for your answer.

Nearly two thirds of respondents answering this question agreed that chemical recycling would complement mechanical recycling, with the remaining third split between disagreeing and being unsure.

Many respondents recognised the need for both methods of recycling to help maximise recycling rates, noting the differences in material that each could use as feedstock and the quality of the outputs. The cost difference between using the two methods is likely to preserve the use of both to some extent, but it is important that the relative costs also consider the differing environmental impacts. It was also suggested that increased use of chemical recycling of plastic waste disincentivises prioritisation for reduction, elimination, and reuse.

Other respondents encouraged the government to take steps to prevent competition between the two recycling technologies for the same feedstock when the cost differential is not sufficient. One respondent suggested that only recycled plastic produced from feedstock which is unsuitable for mechanical recycling should be eligible for chemical recycling and a mass balance approach. It was also suggested that a generous allocation method for chemical recycling could incentivise its use over mechanical recycling.

However, some suggested that the picture is more complex than mechanical recycling, where possible, always being preferable to chemical. While mechanical recycling uses less energy and is more restricted in its feedstocks, greater demand for the food grade material which can only be produced from chemical recycling may lead to more material being recycled in this way. In contrast, some respondents argued mechanical recycling should not always be seen as preferable to chemical because some chemical processes can recycle plastic endlessly whereas the quality of mechanically recycled plastic reduces each time it is recycled.

Question 12: What controls need to be put in place to ensure material which is suitable for mechanical recycling continues to be recycled in that way, if a mass balance approach for chemically recycled plastic is adopted for the purposes of Plastic Packaging Tax?

Many respondents, including several trade bodies, thought that the cost differential would be sufficient for the market to achieve this naturally and that regulation would increase burdens on business and reduce the attractiveness of using recycled material. A few respondents suggested that regulatory controls should be put in place to ensure that material suitable for mechanical recycling was used in that process. A small number of respondents suggested that adopting a polymer only allocation method for chemical recycling would help ensure that economic factors ensured the right destination for feedstocks. However, as reflected in answers to question 11, others painted a more complex picture, citing, for example, the need for chemically recycled plastic to be available to drive greater use of recycled content in food packaging.

It was also brought to our attention that one certification scheme for chemically recycled plastic includes guidelines on when it is appropriate to use the process rather than mechanical recycling, and compliance with this is checked as part of audits under the scheme. A business operating a chemical recycling facility explained that if they were to use feedstock which was suitable for mechanical recycling, this would carry a higher carbon burden and have a negative impact on their sustainability claims.

Environmental groups responding, cautioned that if the environmental impacts of chemical recycling were not carefully considered, allowing a mass balance approach for Plastic Packaging Tax could undo the existing carbon savings from the tax. Many respondents mentioned the importance of better infrastructure for the collection and sorting of waste to provide more feedstocks for all kinds of recycling.

Other suggestions include the need for clear guidelines on which materials should be recycled using each process; tracking and verification systems for recycling streams; education of stakeholders on the importance and benefits of appropriate recycling methods; international agreement on where chemical recycling fits in the waste hierarchy to avoid creating trading frictions; consideration of a cap for chemically recycled plastic; and continued funding for innovative projects.

Government response

See response to question 16.

3.3. Pre-consumer plastic waste

Question 13: Do you agree that pre-consumer waste should be phased out as being classed as recycled material for Plastic Packaging Tax if chemically recycled plastic using a mass balance approach is permitted? Please supply information and comparative costs of recycling to support your answer.

Over 40% of those that answered this question agreed with the proposal to phase out pre-consumer plastic waste being allowed to count towards the recycled plastic threshold, while around 30% were opposed. The remaining 30% that answered were unsure.

Many of those that agreed with the proposal argued that this would adhere more to environmental principles.  Several respondents agreed with the position set out in the consultation document that the current provisions created a possible tax loophole which could undermine the environmental objectives of the tax. Others agreed that it presented compliance challenges and that it may make sense to remove this source of recycled material in the future as more chemically recycled plastic became available.

A small number of respondents raised concerns that pre-consumer material which is currently being recycled could instead go to landfill if this provision were removed. Another respondent agreed with the phasing out of pre-consumer plastic for the purposes of the tax but advocated for its continued use in place of virgin material outside of the tax.  A small number of respondents also reported that they had invested in machinery for reprocessing pre-consumer waste on the basis that it would be classed as recycled. In contrast, other respondents noted that it is good practice to maximise the usage of materials, and that this itself presented a cost incentive for reusing pre-consumer waste without an additional tax incentive. They also agreed that the current provisions do not incentivise resource efficiency.

Those opposed to the proposal suggested that if pre-consumer waste was phased out, a reasonable lead in time for businesses affected should be provided, noting that an abrupt change could undo progress in meeting environmental goals, and that further consultation with businesses impacted should be carried out.

Government response

The government notes and has carefully considered the mixed views on this issue. The significantly lower cost of recycling pre-consumer material compared with post-consumer waste is unfair, and it makes good commercial sense to use material efficiently whether it is classed as recycled for Plastic Packaging Tax or not. Continuing to allow pre-consumer waste as recycled for Plastic Packaging Tax risks undermining the environmental objectives of the tax to drive greater use of recycled plastic in packaging. Much pre-consumer waste which is currently being classed as recycled may be reused whether it was classed as recycled or not, whereas requiring the recycled content for the purpose of Plastic Packaging Tax to be from post-consumer waste only would help to drive up recycling rates and demand for this material. As stated in the consultation document and recognised by some respondents, the current system presents compliance challenges for HMRC and it is difficult to verify and enforce claims made, particularly with imports of plastic packaging.

As set out earlier, the government introduced Plastic Packaging Tax to incentivise the use of recycle plastic in packaging and as recognised in this consultation, it also incentivises innovation in the waste management and recycling sectors. As many respondents noted, a mass balance approach is needed to enable businesses to benefit from relief from the Plastic Packaging Tax, which will make chemically recycled plastic more economically viable.

However, there is still a large disparity between the costs of recycling pre- and post-consumer material and as several respondents identified, making maximum use of pre-consumer waste is best practice regardless of the tax implications. The inclusion of pre-consumer waste has created a tax loophole whereby businesses that reused and recycled pre-consumer waste before the tax was introduced benefit from the tax relief, which is unfair to businesses who have invested in using recycled post-consumer plastic waste.

Having considered all responses alongside the opportunities in the waste management and recycling sector to continue investing and innovating, the government believes the removal of pre-consumer waste as recycled material for the purpose of Plastic Packaging Tax will provide the best economic incentive to support the sector. This will create greater demand for recycled plastic made from post-consumer waste, encourage the uptake of chemical recycling, and address the compliance issues that the current classification causes. It will also address the large disparity between the costs of recycling pre- and post-consumer material.

We are conscious this will represent a significant change for some businesses and have noted the feedback on providing sufficient time to adapt to this change.  We therefore intend to align the removal of this provision with the timeframe for the adoption of a mass balance approach for chemically recycled plastic, which will be set out in the future.

The government recognises that some businesses have invested in making maximum use of pre-consumer waste, which several respondents identified as best practice regardless of the tax implications. Those businesses who have made such investments will continue to benefit from efficiencies in their material usage, and from exemption from Plastic Packaging Tax on this material until the change is implemented.

The government also keeps all environmental taxes under review to ensure they support the waste hierarchy. In this context, the rates of landfill tax will be kept under review to ensure they provide the right economic incentive for businesses to continue to reuse and recycle pre-consumer waste. We will continue to engage with businesses on the implementation of this change.

3.4. Plastic packaging used for human medicinal products

Question 14: Do you agree that chemically recycled plastic using a mass balance approach is likely to meet the regulatory requirements for the immediate packaging of human medicines?

Some respondents confirmed that chemically recycled plastic using a mass balance approach has the potential to meet the regulatory requirements for the immediate packaging of human medicines, although no evidence was provided from any conclusive trials or testing.

A few respondents raised concerns about the lack of available feedstock needed to meet the increased demand, which could increase the price of medicines while other respondents highlighted the need for regulatory alignment and agreement, such as with Medicines and Healthcare products Regulatory Agency (MHRA) and with European markets.

Other respondents also advised that policy as well as regulatory alignment and agreement, (such as with MHRA) would be needed for any changes to be possible, otherwise the administrative burden would be too heavy making the policy ineffective.

One respondent highlighted the international aspect to medicines manufacturing and asked that consideration be given to ensuring alignment with the European markets.

Government response

The government recognises the value of high grade chemically recycled plastic and the potential for it to be used in sectors where mechanically recycled plastic is unsuitable, such as medical packaging.

The government has considered concerns raised by several respondents about the lack of available feedstock needed to meet an increase in demand for chemically recycled plastic, and the need for regulatory alignment with organisations such as MHRA before recycled plastic could be introduced into medical packaging. 

Considering the above, the government has decided not to make any changes to the medical exemption for the foreseeable future. However, the government’s long-term ambition is to remove the medical exemption when more chemically recycled plastic becomes available. Producers and importers of medical packaging are encouraged to start considering how to include more recycled plastic in their packaging as chemical recycling capacity, feedstock levels, recyclate availability increase, and advancements in technology are developed.

Having considered the international aspect of medical manufacturing, the government recognises the importance and unique requirements surrounding the immediate packaging of human medicines and will ensure that any policy developed is compatible with the regulatory framework in this area.   

3.5. Maintaining consumer confidence in recycled plastic

Question 15: How can businesses communicate the recycled plastic content to consumers in a way that does not undermine confidence in claims about recycled content? 

There was general agreement that full transparency and clear labelling is essential in maintaining consumer confidence. The use of certification schemes to verify MBA recycled content can play a role in this, and some certification schemes already offer logos and standard wording which can be used on products. There are already products on the market using material allocated using a mass balance approach, and good industry practice to build on.

Respondents recognised that mass balance is complex for consumers to understand and suggested that to avoid greenwashing a cross-industry group to consider communications should be established. There was also recognition that it may be important to draw a distinction between mechanically recycled content and recycled content allocated using a mass balance approach.

Question 16: Given the issues identified and questions raised in this chapter, do you agree that chemically recycled plastic allocated using a mass balance approach should be treated as recycled plastic for the purpose of the Plastic Packaging Tax? Please provide reasons and supporting evidence for your response.

Over 80% of respondents that commented agreed that chemically recycled plastic allocated using a mass balance approach should be treated as recycled plastic for the purpose of the Plastic Packaging Tax. Key benefits identified include making recycled plastic available for all applications, such as food contact packaging, and creating attractive conditions for investment to help establish the recycling infrastructure required for the UK to meet its recycling targets and circular economy objectives.

Trade bodies and others pointed out that the MBA chain of custody model is used in other industries and reported the need for acceptance of a mass balance approach to be ‘technology neutral’ to allow for future developments in this young industry. They advised that a mass balance approach is needed to enable the recycling infrastructure required for the UK to meet recycling targets and circular economy goals and reported that UK has already missed out on significant investment in chemical recycling due to non-acceptance of a mass balance approach. Alignment with World Wildlife Fund on its 10 Chemical Recycling Implementation Principles was also mentioned by some respondents.

A few other respondents raised reasons for caution, including ensuring that a stringent allocation method is used, that all packaging should not be described as ‘recyclable’ by default because of chemical recycling, and that it is important that packaging is designed to be suitable for mechanical recycling wherever possible. A small number of respondents suggested that chemical recycling was the wrong approach because only a small amount of the plastic input into the process ends up being reused.

Government response

In line with the majority of respondents, the government agrees that allowing use of a mass balance approach to account for chemically recycled plastic for the purpose of Plastic Packaging Tax should be permitted. There was broad consensus for supporting this emerging technology to enable the recycling of hard to recycle plastic material which is currently destined for landfill or energy from waste, and to produce high grade recycled plastic suitable for a wide variety of applications. The government also acknowledges that adoption of a mass balance approach is one of several factors that, when combined, have the potential to encourage investment in UK recycling technology and support the development of the chemical recycling sector.

The government also notes the concerns raised about the potential environmental impacts of this technology and the potential for the adoption of a mass balance approach to disincentivise efforts to move waste up the hierarchy. The government believes that the overall effect will be positive, given the potential to both reuse difficult to recycle material and to produce recycled plastic for food packaging. As with all changes, the impact of the policy will be kept under review once implemented, including environmental impacts as more data becomes available.

4. Mass balance models

4.1. Analysis of mass balance levels

Question 17: Do you agree with the government’s suggested approach to not allow businesses to use the group level calculation? Please provide reasons and supporting evidence for your response.

Three quarters of the respondents provided a reply. Just under a third of respondents agreed with the suggested approach. Several respondents said the group level calculation would provide less traceability and accuracy, lowering the public’s confidence in recycling and recycled content claims which could undermine the aims of the tax. Others cited the risk of greenwashing and false claims for relief from the tax as a concern.

A small majority supported the view expressed by trade bodies who said a group level calculation is the most workable solution for petrochemical companies because of the UK ethylene pipeline and should be allowed, but provided little evidence as to why a group level calculation is essential beyond this.

These respondents also suggested that there needs to be a physical possibility the output products contain recycled material, suggesting the transfer of recycled feedstock credits between a business’s sites should be restricted to within geographical boundaries. Their view was that the recycled feedstock should come from a UK chemical recycling facility, which would not always be the case with a group level calculation.

One respondent advised that UK cracking operations are configured to use gas feedstock and not the oil based recycled feedstock currently produced by some chemical recyclers. They stated that if a group level calculation was not allowed, the recycled material would need to be physically transported to the UK, which is possible but would increase cost and not help to reduce petrochemical companies carbon footprint.

Several trade bodies highlighted the multi-site transfer of recycled feedstock credits approach, which is currently allowed under the ISCC Plus certification scheme. This approach allows a business to allocate a proportion of the recycled feedstock it receives in one of its sites, to another one of its sites. The transfer of credits is only allowed if it meets the requirements set by ISCC Plus, which includes the requirement for each site to keep its own mass balance calculation. Some respondents argued that the transfer of credits should only be allowed if a company’s sites are connected by pipeline or an internal transport connection. Others said that the transfer of credits should not be allowed between unrelated chemical processes.   

Some respondents suggested that only the batch level mass balance should be used as the proportion of recycled feedstock fed into the process is known, providing a better estimate of recycled material in the output products compared to the other levels. Others advised a site level balance was a feasible solution for businesses and gave the end user more confidence that the product may contain recycled material.

Question 18: Do you foresee any practical barriers or risks to using the batch or site level calculations? Please provide details of what those barriers or risks are.

The majority of respondents representing the plastic value chain agreed that calculations at site level mass balance was not practical for petrochemical companies because of the UK ethylene pipeline. These respondents also explained that a batch level calculation was not possible for petrochemical operations as the cracking process is continuous and individual product batches were not produced.

A minority of respondents said there were no practical barriers or risks with either level of mass balance. Other respondents said a site level mass balance is a workable option, highlighting that it is currently used in the ISCC Plus certification scheme.

Question 19: To what extent do the batch and site levels of mass balance support the objectives of Plastic Packaging Tax and incentivise investment in chemical recycling in the UK? Please provide reasons and supporting evidence for your response.

Just under half of those who responded to the question said both levels would disincentive investment in the UK chemical recycling sector, preventing the scale up of chemical recycling. One respondent added that this was due to both batch and site level mass balance being incompatible with the current petrochemical infrastructure.

One respondent explained that both levels of mass balance would not secure adequate levels of recycled feedstock and said allowing the transfer of credits under specific circumstances would be a pragmatic solution to the issue. 

Other respondents said that both levels of mass balance would best support the objectives of the tax, especially the batch level as this provides the strongest possible link between the recycled feedstock input into the process and the output products it produces. Some of these respondents also highlighted that the stronger link would provide the transparency and evidence needed to incentives the use of chemically recycled plastic in plastic packaging products.

Government response

The government understands the practical barriers of applying a batch level mass balance to the continuous cracking processes used in the petrochemical industry. The government also acknowledges the concerns raised regarding the practicalities of operating a batch or site level mass balance within the current petrochemical infrastructure, including the use of the UK ethylene pipeline. However, a site level mass balance is already used by some certification schemes which also include pipeline movements and so appears to be a workable solution.

The government agrees that there should be a physical possibility that the output products contain recycled material. As such, we believe the site level mass balance along with the restricted transfer of credits will strike the right balance between encouraging and facilitating chemical recycling while preserving the integrity of the tax, preventing greenwashing, and maintaining consumer confidence in the recycling process. This approach will help to ensure the tax continues to meet its aims by providing a recycling route for hard to recycle plastic waste and encourage the use of recycled plastic in plastic packaging components. Businesses will also have the option to use a batch level mass balance where a process allows for it.

4.2. Allocation method

Question 20: Do you agree with the government’s suggested approach to not allow businesses to use the free allocation method? Please provide reasons and supporting evidence for your response.

Respondents overwhelmingly agreed that the free allocation method should be ruled out. It was noted that this method of allocation was too broad and did not support the circular economy. Some commented that there was a need for renewable fuels for which chemical recycling could provide a feedstock, but even then, it was noted that the existing legislation does not permit products used as fuels or as a means to generate energy to be classified as recycling. It was also suggested that free allocation would risk creating an unlevel playing field with mechanical and short loop chemical recyclers, who would not be in a similar position benefit from material unsuitable for use in plastics sent for energy recovery. Some did argue that free allocation would provide a faster scale up for chemical recycling capacity, but most making this argument nonetheless recognised that enabling feedstock used in fuel production to be allocated to use in plastic would not be in line with the objectives of Plastic Packaging Tax.

There were concerns from NGOs, food packagers and others that free allocation would misrepresent the level of recycled content in plastic and that this could make consumer communication and messaging very difficult to uphold without breaching the green claims code. There was also concern that that free allocation would not promote investment in more efficient technologies.

Question 21: To what extent do the proportional balance, fuel exempt or polymer only allocation methods, support the objectives of Plastic Packaging Tax and incentivise investment in chemical recycling in the UK? Please provide reasons and supporting evidence for your response.

Question 22: What are the relative advantages with the proportional balance, fuel exempt and polymer only allocation methods? Please provide details of what those advantages are.

Question 23: What risks or practical challenges do you envisage with the proportional balance, fuel exempt and polymer only allocation methods? Please provide details of what those risk and challenges are.

Responses to these three questions tended to cover very similar ground, with different respondents making the same points in response to different questions, or in some cases very similar points in response to all the questions. The responses are therefore considered together here.

Proportional allocation was argued by some respondents to be the method most in line with the recycled content calculation already adopted within the Plastic Packaging Tax, in that where a known proportion of recycled plastic is used in the manufacture of a given number of packaging components, the recycled content within each component is taken to be equal to the proportion of the inputs to the manufacturing process that were recycled. Some, particularly environmental groups and those in the non-plastic packaging sector, felt this to be the fairest approach where the outputs of chemical recycling cannot be attributed to any specific inputs, and the one most likely to preserve a level playing field between chemical and mechanical recycling and to offer the largest potential environmental benefits. This, they argued was the easiest method for those without technical knowledge to understand and provided greater transparency, reducing ambiguity about recycled content in plastic outputs and the associated risk of greenwashing. One respondent suggested that operators should be allowed to divert from the proportional method only if they could evidence that their process would lead to a different distribution.

However, some, particularly in the waste sector, felt that the proportional approach would be difficult to evidence and communicate. These favoured the polymer-only method, with additional conditions on end use. In general, the polymer-only approach was recognised as aligning with the objectives of the Plastic Packaging Tax in so far as it promotes the circular economy in the plastics sector, in that it encourages the use of feedstock from recycled sources in the production of polymers, even if these do not necessarily end up in packaging. However, there was concern, particularly from some environmental groups, that the link between Plastic Packaging Tax exemption and the actual percentage of recycled content would be broken. Some who supported proportional balance saw this as the next best option but were concerned that since a small amount of packaging polymer can take all the recycled content of less technical products that this would give no incentive to increase plastic packaging yields. One respondent argued that the only defendable mass balance approach is to use polymer-only allocation combined with a proportional balance allocation across all of the polymer outputs. 

The concern identified by some respondents in relation to the fuel exempt method was the proportion of material which could go to non-polymer products, such as waxes, tarmacs and pharmaceuticals, with the feedstock from recycled material that goes into such products still being attributed to plastic packaging use.

There was also concern expressed that both the fuel exempt and the polymer-only methods could create an unfair advantage for chemical recycling compared to mechanical, as companies could allocate recycled content to materials or products with higher prices, even if the actual amount of recycled content was relatively low.

However, even some of those who recognised that the proportional or polymer-only methods were more closely aligned to the objectives of the tax, nonetheless argued for the fuel exempt approach, even though this enables a claim of higher levels of recycled content in polymer output than would realistically be achieved.

It was argued that with current capacity in the UK for chemical recycling and that expected in the medium term, that under the polymer-only method, companies would not be able to reach 30% recycled content for their product, and that this problem would be even greater under the proportional approach. One respondent pointed out that the vast scale of petrochemical infrastructure operations can render chemically recycled percentages miniscule in relation to overall production while another argued since so little of the recycled feedstock ended up in plastics that it would be impossible to achieve 30% under the proportional method without diverting huge amounts of material away from mechanical recycling. Another observed in support of the fuel exempt method that other methods limit the credit allocation without any scientific reason, since scientifically there is no proportional link of input and output based on chemical reactions. 

Those respondents in the petrochemicals industry and many of those engaged in the production of plastic packaging and of goods which use plastic packaging felt that that the fuel exempt approach was necessary to make chemical recycling economically viable, argued that the significant investment required to set up a chemical recycling plant requires a high attributable yield. Some supporting fuel exempt approach also argued that the fuel exempt method aligns with the Plastics Waste Hierarchy in trying to minimise the flow of materials to fuel or landfill. Others made the case that it is important that the benefits of chemical recycling are not lost by too restrictive a scheme which on paper sounds like it is closer to the aims of the tax. One petrochemical company argued that the flexibility of the fuel exempt method would provide the confidence to support long-term and substantial off-taker agreements. Supporters of the fuel exempt approach saw it as striking the right balance between ensuring that chemical recycling is contributing to the circular economy and ensuring the technology is investable and able to grow.

However, a few respondents highlighted that this method is more difficult to communicate to consumers and that more work and effort would be needed to build and maintain consumer trust. One trade body suggested that to provide assurance facilities could give evidence of the different outputs they produce, to enable HMRC to make sure that a significant amount is going towards plastic production.

Question 24: To what extent would the requirements and standards need to be tailored to address the different risks associated with proportional balance, fuel exempt and polymer only allocation methods.

Most respondents felt that certification with third party audits would provide reassurance on the use of mass balance across all the different allocation methods. However, some in the waste industry felt that the polymer only method would reduce the need for additional burdensome reporting. It was suggested that to provide reassurance specifically for the fuel exempt model a requirement could be in place that facilities give evidence of the different outputs they produce on an annual basis, which would enable HMRC to make sure that a significant amount of the output material is going for plastic production rather than towards chemical production.

Government response

The government understands the case made for the proportional and polymer-only methods of mass balance allocation as a way of more closely reflecting the recycled content present in plastic packaging. However, the government believes that the fuel exempt method strikes the right balance between providing a strong incentive to invest in the UK chemical recycling sector and maintaining the integrity of the tax and consumer confidence in recycling.

This approach will need to be kept under review as the technology develops and supply increases, in order to ensure that the fuel exempt method of allocation represents and continues to represent value for money and to achieve the best environmental outcome.

4.3. Balancing period

Question 25: If a mass balance approach was adopted and taking into account the impact it may have on the amount of Plastic Packaging Tax chargeable on businesses’ quarterly tax returns, what would be a reasonable balancing period for businesses to equate the amount of recycled feedstock received, to the claims made around recycled content in output products? Please provide reasons for your response.

The large majority of respondents said that the 3-month balancing period allowed by some of the current certification schemes would be reasonable. It was suggested that allowing longer than 3 months would increase the risk of fraud and reduce traceability. Some respondents added that a balancing period shorter than the one currently allowed by these schemes, would increase administrative burdens and have a negative impact on cost. 

Others suggested different balancing periods, including 12 months balancing as this would be desirable for businesses, especially converters, due to the manufacturing process and timeframes for ordering products. Others suggested a monthly balancing period maybe also reasonable as this would give a more accurate picture of the recycled content used in packaging. One business representative organisation said that no balancing period should be allowed as mechanical recyclers are not allowed a balancing period.

Question 26: Do you agree or disagree that businesses should be allowed to have a negative balance during a balancing period for a mass balance calculation allowable under Plastic Packaging Tax? Please provide reasons and supporting evidence for your response.

Over a third of respondents did not answer the question or did not know if a negative balance during a balancing period should be allowed. Of the remaining respondents, a large majority of said a negative balance should not be allowed during the balancing period. Several trade bodies and business from across the plastics value chain said a negative balance gives an unfair advantage to chemical recycling, highlighting a business could claim to have produced more products containing recycled plastic then it has actually used, something mechanical recycling cannot do.

Other respondents highlighted the potential issues for the taxpayers, who would have no control over their supplier’s negative balance and may have already claimed the tax relief before the end of the balancing period, leading to incorrect claims. Some respondents said allowing a negative balance could lead to less actual recycling of plastic waste resulting in greenwashing claims, undermining confidence in the tax and recycling system.

A small minority said a negative balance should be allowed during the balancing period. One respondent said that a negative balance was needed to meet the demand for chemically recycled feedstock, as it currently exceeds the levels the chemical recycling sector can supply.

Government response

The government recognises the concerns raised by the majority of respondents in relation to allowing a negative balance during the balancing period. The potential for a business to claim relief from the tax when it has not received the recycled feedstock could increase the risk of incorrect claims for tax relief and create an unfair advantage to chemical recycling. The government agrees that a negative balance should not be allowed at any point in the balancing period to preserve the integrity of the tax.

The government is grateful for the feedback regarding the balancing periods allowed by existing certification schemes currently operating in the sector, including the benefits of a 3-month balancing period. The government also notes the suggestions for different balancing period and their potential benefits. The government believes a 3-month balancing period without a facility of a negative balance at any point, strikes the right balance between minimising administrative burdens, maintaining a level of traceability and reducing the risk of fraud.

4.4. Measurement units

Question 27: What are the benefits and disadvantages of the different measurement units for a mass balance calculation if it is adopted for Plastic Packaging Tax purposes?

Most respondents argued that using mass would provide a transparent figure for calculating the weight of chemical recycling output. This was argued to be more practical, to enable consistency when considering both inputs and outputs and to be easier to understand. Some felt that molecular units might provide a more useful measurement unit for the process in a refinery. However, those supporting the use of mass felt that the molecular units were well described by the mass of the material and that measuring, for example, the carbon input into the cracking process versus the carbon outputs would unnecessarily complicate calculations. Nonetheless, it was recognised that mass doesn’t take account of the different compositions of the recycled and virgin feedstocks input into the cracking process, and how these can affect processing losses and the proportion of recycled to virgin material in the final output product. There was a suggestion that the use of mass could be an incentive not to clean materials properly.

Lower Heating Value was recognised as being a common unit of measurement used within the chemical and fuel industries, which is used in existing certification schemes. However, most argued that is a more complex measurement which would create an additional administrative burden. 

Question 28: Which measurement unit best supports the environmental aims of the tax?

Most of those who responded to this question argued that mass is directly relatable to the percentage of material included in packaging for the purpose of the Plastic Packaging Tax. Others argued that either mass or molecular units would support a robust and sensible measurement system. One petrochemical company argued that a further discussion on the technical details should take place to ensure alignment with current best practice as also supported by the certification schemes. 

Question 29: Should the government exclude any of the measurement units from being used in a mass balance approach calculation which is allowable under Plastic Packaging Tax? If so, please state which measurement units should be excluded, provide reasons, and supporting evidence for your response.

Most of those who responded to this question were either unsure or felt that some measurement units should be excluded from being used in any mass balance calculation under Plastic Packaging Tax. Some respondents noted that existing certification schemes do use molecular units and Lower Heating Value but felt that in the context of the tax, mass seemed most appropriate. In particular, it was felt that mass was more practical further down the value chain, with some commenting that with the other proposed units of measurement the lack of transparency and data inaccessibility could increase the risk of recycled content fraud.

Some felt that the Lower Heating Value method did not have a role in the polymer only method as it appeared to identify more with fuels than plastics, which could be misleading as to the policy intention. Others argued that it should be excluded as an indirect unit of measurement on the grounds that it is difficult to communicate to consumers.

One respondent argued that since molecular units involve counting individual atoms this would be complex to measure and not practical when dealing with large volumes of material.

Some were concerned that allowing multiple measurement points and units increases the risk of confusion and fraud, so that to maximise transparency, the same measurement units should be used by all parties.

Question 30: Do you think businesses should be required to deduct process losses from a mass balance approach calculation which is allowable under Plastic Packaging Tax? Please provide reasons and supporting evidence for your response.

Respondents overwhelmingly agreed that deducting process losses was essential to maintaining the integrity of a mass balance calculation. The key point was that material which is lost to the circular economy does not contribute to materials that replace virgin fossil-based materials. Other points made included that chemical recycling can result in significant process losses, that inefficiencies should not be incentivised and that some of the losses would be of non-polymers such as sand, metals, and organics. Deducting process losses was also argued to be important to maintaining a level playing field with the mechanical recycling sector, with it being suggested that not doing so could incentivise chemical recycling at the expense of mechanical recycling. There was also concern that deducting process losses was important for purposes of communication and trust with customers and that ignoring them would be open to accusation of greenwashing.

Some felt that more investigation was needed to establish the level of process losses in chemical recycling. However, others commented that existing certification schemes already distinguish between product, by-product, and process losses, and that the latter are deducted from the yield.

One respondent suggested that a sensible approach would be to establish a deemed loss amount for a given group of technologies (e.g., pyrolysis, dissolution, chemical depolymerisation, etc) where the feedstock has undergone a reasonable pre-treatment process (washing, etc). This would need to be set at a realistic best available technology level, and only if a specific facility could demonstrate a more favourable figure would it be allowed to use that rather than the deemed loss amount.

Government response

The government view is that different units of measurement may be appropriate at different stages of the supply chain. In the later stages of the supply chain where polymers are being shipped and plastic packaging components manufactured mass is the commonly used and most easily understood measure, and this is the measure used for tax accounting purposes. However, at the refinery stage where the key mass balance calculations are being made Lower Heating Value is an approach that is consistent with current industry practices. Molecular units might produce a marginally more accurate result, and therefore should not be discouraged, but if this was made a requirement this could impose administrative burdens for minimal benefit. It is not apparent from the responses that the use of any unit would provide a consistent tax advantage. This being the case, the government is not inclined to prescribe a particular unit of measurement or to exclude the use of any units.

Process losses should be deducted and existing certification schemes are quite stringent in this regard. However, as we formulate detailed proposals, the government will do further work with industry to ensure these losses are accurately calculated and are not abused.

5. How certification would operate

5.1. Frequency and nature of audits

Question 31: Do you foresee any barriers or risks with introducing a requirement for businesses to use certification schemes to verify compliance with a mass balance approach, if it is adopted for Plastic Packaging Tax purposes? If so, please provide details and supporting evidence.

While respondents noted that certification could increase administrative burdens on business, there was general agreement that it was necessary to prevent fraud and maintain consumer confidence. Many respondents reported that it would be helpful to use existing certification schemes, and that ISO standards in this area are already in use. Business respondents identified that it would be important to ensure that there were sufficient resources available for the certification, accreditation and auditing processes which would be needed.

Clarity on requirements for international businesses was requested, and the need for equal treatment of UK packaging producers and importers was cited. Retailers raised concerns about burdens on business in conjunction with possible other regulatory requirements around recyclability of packaging. The need for time to implement requirements was also raised as a concern.

Question 32: In what circumstances and at what frequency should a certification scheme check the quality of audits completed by certification bodies? Please provide reasons for your response.

While some respondents suggested annual checks, others advised that certification schemes currently require reports of every audit conducted to be submitted to them to ensure a consistency of approach. Certification schemes also have procedures in place for investigating any issues that arise, and also provide training for auditors on the expected standards. Some respondents also noted that these checks should be carried out sufficiently regularly that any tax which became due if an audit was amended could legally be recovered.

Question 33: Do you agree with the government’s suggested approach of introducing a minimum requirement for the frequency and nature of audits? Please provide reasons and supporting evidence for your response.

All but 1 of the respondents expressing a preference agreed that minimum requirements for the frequency and nature of audits should be prescribed by the government. Respondents suggested that these requirements should include a consistent reporting mechanism, operate to international standards, require annual in person audits, and be affordable while adding value. It was also suggested that audits are particularly important for imported plastic packaging which is claimed to contain 30% recycled plastic.

Question 34: If a mass balance approach was adopted for the purposes of Plastic Packaging Tax, do you have any suggestions for minimising the administrative burdens on business while ensuring compliance with the minimum requirements.

There was a divided response to this question, with just over a third of those expressing a preference favouring all businesses in a supply chain being certified under the same scheme, and the remainder disagreeing. Those in favour suggested that the use of the same scheme offered the greatest protection against fraud, while others suggested that setting minimum standards for schemes would lead to alignment, and that schemes should be encouraged to recognise each other. The issue of costs for SMEs required to be certified under more than one scheme was raised in support of not mandating a single scheme approach. We were also told that multi-scheme approaches operate successfully in other areas, and that a single scheme approach could contribute to a monopoly.

5.2. Status of certification

Question 35: Should all businesses in a supply chain from the recycler to the packaging manufacturer be certified under the same scheme to enable the recycled material to be taken into account for the purposes of Plastic Packaging Tax?

There was a mixed response to this question, with just over a third of those expressing a preference favouring all businesses in a supply chain being certified under the same scheme, and the remainder disagreeing. Concerns about costs to small businesses and the creation of a monopoly were raised in opposition to a single scheme requirement, while guarding against fraud was cited as a reason for mandating a single scheme.

Government response

The government welcomes confirmation that verification by an independent certification scheme based on prescribed standards would be an essential requirement when using a mass balance approach to calculate the amount of chemically recycled plastic.  We note the potential benefits of using existing mass balance certification schemes where possible and will work with scheme operators and interested parties to draw up a set of standards to ensure the policy objectives and integrity of the tax are maintained.

We also agree that the standards should include requirements for frequency of audits of certified businesses, and for reporting of audits to scheme operators.

The government accepts that there is not a compelling case to require all members of a supply chain to use the same certification scheme, as all schemes will be required to meet the same standards. This will also reduce the administrative burden and cost to businesses of having to be part of more than one scheme because they are part of several different supply chains. 

5.3. Accreditation of certification bodies 

Question 36: Do you agree with the proposed accreditation requirement for certification bodies who complete the certification scheme audits? Please provide reasons and supporting evidence for your response.

Just under a third of respondents did not answer the question or did not know if an accreditation requirement for certification bodies should be introduced. Of the remaining respondents, a large majority agreed with the proposal to introduce an accreditation requirement for certification bodies. Respondents said accreditation for certification bodies would ensure transparency and build trust throughout the plastics value chain. Others also said accreditation would maintain the consistency and quality of audits.

Other respondents pointed towards some of the current certification schemes which require accreditation against ISO standards 17065 or ISO/IEC 17021 and suggested any existing accreditation needs to be recognised. Several trade bodies highlighted that there is a multilateral agreement (MLA) in place between some members of the International Accreditation Forum (IAF) which allows for the mutual recognition of accreditation awarded by other accreditation bodies.  

A small minority of respondents did not agree with the proposal, suggesting accreditation would add additional burdens on businesses and certification from one of the current certification schemes should be enough. One respondent said the accreditation from United Kingdom Accreditation Service (UKAS) would also be too UK centric.

Government response

The government welcomes the broad support for the introduction of an accreditation requirement for certification bodies to protect the integrity and ensure validity of mass balance calculations.

The government acknowledges the concerns raised regarding the potential additional administrative burdens on businesses. The proposed accreditation requirement will require businesses to be certified by an accredited certification body   This approach is in line with the approach taken by some known certification schemes currently operating in this area, which requires certification bodies to be accredited by a national accreditation body or competent authority.

The government also recognises the need for a clear accreditation system that supports a global supply chain whilst ensuring transparency and compliance with the requirements. As detailed in the consultation, the International Accreditation Forum Multilateral Agreement allows for the mutual recognition of certification and reports issued by accreditation bodies who are signatories. The government will continue to work with UKAS to establish the process for accreditation, including the use of mutual recognition agreements.

6. Understanding commercial practices

Question 37: Unless already covered in your responses to other questions within this document, please tell us how you think your business would be impacted by being permitted to use chemically recycled plastic accounted for using a mass balance approach as recycled for the Plastic Packaging Tax, including additional administrative burdens?

The government is grateful for the responses to this question and will make use of these in developing the detailed policy.

7. Assessment of impacts

Question 38: Do you have any comments on the assessment of equality and other impacts in the Tax Impact Assessment?

The government is grateful for the responses to this question. All impacts will be reviewed, and the government will publish the Tax Information and Impact Note alongside legislation.

8. Next steps

The government intends to proceed with developing the approach as set out in the document, which will allow chemically recycled plastic accounted for using a mass balance approach to be accepted as recycled plastic for the purpose of Plastic Packaging Tax. In particular, it will be a legal requirement for a certification scheme meeting prescribed requirements to be used to ensure that the integrity of the tax is maintained, and we will follow the principle that it must be possible for outputs to which recycled content is allocated to include some of that content.

The government believes that this is the best way to encourage greater recycling of difficult to recycle plastics, such as films, and to enable greater use of recycled plastic in applications where there are other regulatory requirements, such as food packaging.

This is a complex area, and the government welcomes the constructive input we have received from stakeholders to date. We will continue to engage with key stakeholders to work with us on the detailed proposals.

The environmental objectives of the Plastic Packaging Tax will remain at the forefront of our consideration whilst implementing this change, including issues raised by respondents to this consultation. We will continue to review evidence on the environmental impact of this emerging technology as it matures and evaluate the potential impacts of these proposals.

The government will also remove the use of pre-consumer waste as recycled plastic for the purpose of Plastic Packaging Tax from the same date that a mass balance approach for chemically recycled plastic is introduced. The exemption for the immediate packaging of human medicines will remain in place for the foreseeable future, however the government’s long-term ambition is to remove this once virgin quality recycled plastic from chemical recycling becomes more widely available.

Annexe A: List of stakeholders consulted

• Alupro (Aluminium Packaging Recycling Organisation Limited)
• Amcor Flexibles EMEA
• arc21
• Arla Foods UK
• Associated British Foods
• Joint submission from:
  • Association of the British Pharmaceutical Industry (ABPI)
  • the British Generic Manufacturers Association (BGMA)
  • the Proprietary Association of Great Britain (PAGB)
• Barry M Cosmetics
• BASF PLC
• Beyondly Global Ltd (formerly Comply Direct)
• Bio-based and Biodegradable Industries Association
• British Plastics Federation
• British Adhesives and Sealants Association (BASA)
• British Beauty Council
• British Retail Consortium
• British Soft Drinks Association (BSDA)
• Britvic Soft Drinks
• Chartered Institute of Taxation
• Chemical Industries Association
• Chemical Recycling Europe
• Coca-Cola System GB
• Cosmetic, Toiletry and Perfumery Association
• Crown Packaging Manufacturing
• UK Limited
• Dairy UK
• Danone UK and Ireland
• Dart Prroducts Europe
• DEFRA Expert Advisory Committee on Packaging
• Ecosurety
• Enerkem
• Enval Ltd and Greenback Recycling Technologies Ltd.
• Environmental Services Association
• Evelyn Partners LLP
• FAERCH
• Food and Drink Federation
• FoodService Packaging Association
• Green Alliance
• GreenBlue Institute
• ICAEW
• Imperial Brans Plc
• Incpen
• Ineos
• Institute of Materials, Minerals & Mining (IOM3)
• Itero Technologies Limited
• Johnson and Johnson Limited (‘Kenvue’)
• Larac (Local Authority Recycling Advisory Committee)
• LEGO Group
• Mars Incorporated
• McDonald’s UK and Ireland
• Metal Packaging Manufacturers’ Association
• Mura Technology
• Nestlé
• OPRL Ltd
• Plastics Energy Ltd
• Plastics Europe
• PricewaterhouseCoopers LLP
• Procter and Gamble
• Provision Trade Federation
• RECOUP
• Re-Gen Waste Ltd
• Reliagen Projects Ltd
• Roberts Metal Packaging Ltd
• SABIC
• Sanita UK
• Seafish
• Sealed Air Limited
• Suez Recycling and recovery UK Limitye
• Suntory
• Tetra Pak Limited
• The Chartered Institution of Wastes Management (CIWM)
• The Co-operative Group
• The Waste and Resources Action Programme (WRAP)
• Tinmasters Limited
• Trivium Packaging
• UKAS
• UKELA (UK Environmental Law Association)
• Unilever UK and Ireland
• United Kingdom Without Incineration Network (UKWIN)
• University of Manchester, Sustainable Materials Innovation Hub, ReCon
• Valpak
• Viridor
• Wildlife and Countryside Link

The government also received responses from 2 individuals who responded in a private capacity and 8 organisations who wished their responses to be confidential.