There are major changes to plastic packaging tax in the UK !
author: Annie
2025-06-06
The Bioplastics Research Institute reports that the UK's HM Revenue and Customs (HMRC) has issued a major update to the Plastic Packaging Tax (PPT). From April 2027, chemical recycling will be officially recognized as a countable recycled component, and pre-consumer recycled components will no longer be eligible for tax exemption. These two major policy changes will reshape the UK plastic packaging industry.
What is the plastic packaging tax? If the recycled content is less than 30%, a tax of 2,146 yuan per ton is imposed
In recent years, global environmental awareness has been increasing, and countries have introduced policies to deal with plastic pollution. In the UK, plastic packaging accounts for 44% of domestic plastic usage and is the main source of 67% of plastic waste. A large amount of packaging uses new materials, and recycled plastics are insufficient.
Under this severe situation, the UK will implement a plastic packaging tax from April 1, 2022, hoping to promote the sustainable development of the plastic packaging industry through taxation. Its core purpose is to improve the level of plastic waste recycling and strengthen the management of importers. The policy stipulates that plastic packaging with a recycled material content of less than 30% will be taxed.
From April 2024, companies that produce or import such packaging will have to pay a tax of 223.69 pounds (2,146 yuan) per ton. This measure aims to use economic means to force companies to increase the proportion of recycled plastics and reduce their dependence on virgin plastics, thereby reducing plastic pollution.
What will change in 2027? Chemical recycling is recognized, pre-consumer waste is excluded
This policy adjustment shows the significant characteristics of "one plus one minus".
What is "added" is that chemical recycling is included in the countable recycled content. From April 2027, the recycled plastic content produced by chemical recycling will be officially included in the statistical scope of recycled content of plastic packaging tax. In order to adapt to the characteristics that chemical recycling products are often mixed with virgin materials and difficult to physically track, the UK introduced the Mass Balance Approach (MBA) as a method for calculating recycled content. This chain of custody model allows companies to calculate recycled content through mass balance when recycled materials are mixed with virgin materials, expanding the statistical scope of recycled content of plastic packaging tax from traditional physical recycling to the two major areas of physical recycling and chemical recycling.
What is “reduced” is that pre-consumer recycled (PIR) content is excluded from the statistical scope. In the past, pre-consumer recycled content, such as production waste, could be counted towards the tax exemption. But after the implementation of the new regulations, only post-consumer recycled materials, whether processed by mechanical or chemical means, will be counted towards the 30% threshold.
What does this mean for businesses?
The updates will require companies to rethink their material sourcing and compliance strategies earlier than expected, with the reforms originally scheduled to be implemented in 2029 but now brought forward by two years to 2027.
Businesses, including international suppliers importing 10 tonnes or more of packaging into the UK each year, must ensure full traceability of their recycled content, particularly when using chemically recycled feedstock.
For flexible packaging companies that rely on pre-consumer materials, if they fail to adjust their production models in time and increase the proportion of chemical recycled materials, they will face a high tax burden of 223.69 pounds (2,146 yuan) per ton.
This adjustment will have a huge impact on flexible packaging companies that rely on pre-consumer materials, such as manufacturers of plastic bags and functional films. If they fail to adjust their production models in a timely manner and increase the proportion of chemically recycled materials, or fail to increase the recycled content to 30% before the new regulations are implemented, they will face high taxes.
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