The plastic and packaging challenge

In January 2018 Theresa May pledged to eliminate avoidable plastic waste by the end of 2042 in the government’s 25 Year Environment Plan. It was, however, criticised as being vague with no definite plan or policy.  Concerns about plastic continued to hit the headlines: ‘Supermarkets flooding UK with 59 billion pieces of plastic packaging a year’‘UK plastics recycling industry under investigation for fraud and corruption’‘One-third of UK plastic is not easily recyclable analysis shows’. One year later, in December 2018, the government released its Resources and Waste Strategy paper for England, their ‘blueprint for eliminating avoidable plastic waste’, with the hope of being able to tackle these issues.

Key Aims
  • Ensure producers, rather than councils, pay the full net costs of managing packaging waste
  • Drive the production of more resource-efficient products
  • Ensure the export of packaging waste is done in an environmentally responsible way and secure a level playing field between accredited domestic reprocessors and exporters
  • Ensure it is easier for consumers to know what packaging they can recycle
  • Stimulate demand for recycled plastic and reduce the use of the single-use plastic
Key Initiatives
  • Introduce extended producer responsibility for packaging by ensuring that producers pay the full costs of disposal for the packaging they place on the market
  • Introduce mandatory labelling on packaging and improved communications (funded by producers)
  • Introduce legislation to specify a core set of recyclable materials to be collected by all local authorities and waste operators
  • Invest £3 billion by 2042 on developing new waste infrastructure
  • Introduce a plastics tax – this tax will apply to plastic packaging containing less than 30% recycled plastic
  • Set minimum design requirements which consider whole lifecycle impacts and aim to drive the production of more resource efficient products

How will the new regulations impact businesses?

Extended Producer Responsibility

One of the biggest impacts on businesses will be the extended producer responsibility charges on the packaging. ‘Producers’ refer to businesses who place disposable packaging on the market including retailers, supermarkets and manufacturers.

The current system requires companies that handle over 50 tonnes of packaging a year and have a turnover above £2m to comply. Currently, these producers are required to pay approximately 10% of the total cost required to collect and sort waste.  They are required to purchase packaging waste recovery notes from UK reprocessors or waste exporters to show that they’ve recovered and recycled a minimum level of packaging waste.

Local authorities foot the remaining 90% of the costs. The proposed changes will require producers to cover the total cost of managing their waste and is also likely to extend to smaller producers.  This means not only more producers will be responsible for paying for the cost of recycling and recovering any packaging waste they put on the market, but also that those currently paying should expect fees to increase.

This initiative is also likely to include modulated fees. This means producers will have to pay more if products are harder to reuse or recycle and contain a higher proportion of virgin raw materials, although details of this are reliant on government consultation.

Many other European countries already have extensive producer responsibility schemes where producers fund the collection of key recyclables and pay up to 5 times more than producers in the UK.

This has helped countries such as Germany and Austria to achieve some of the highest recycling rates in the world, at 66% and 55% respectively, according to Eunomia’s ‘Recycling – Who Leads the Way?’ report. The UK, in comparison, has recycling rates of 43%, showing there is significant room for improvement.

Plastics Tax

In addition to the extended producer responsibility scheme which will cover all types of packaging, the government is also set to introduce a new plastics tax that will apply to all plastic packaging that includes less than 30% recycled material.  Whilst this is not due to come into effect until April 2022, the paper has outlined that businesses are expected to change their practices before the tax is introduced.

Businesses are already doing this and at present over 72 retailers have voluntarily signed the UK Plastics Pact aiming to ensure 30% average recycled content across all plastic packaging by 2025

You may also like to read: Debunking the compostable myth

What is the policy missing?

While the government’s Resources and Waste Strategy is a great start to tackling the UK’s recycling and waste issues, many of these policies lack clear timelines and are reliant on several government consultations as shown in the diagram below.  However, all businesses should be prepared for a number of changes to come into force by no later than 2023.

Our Waste, Our Resources: A Strategy For England

It is also unclear how new funds from extended producer responsibility and the plastic tax will be used.  The government has not outlined whether these taxes will be an additional source of income to councils for funding waste management or if the taxes will replace current funding.  There is an urgent need to invest in the UK’s recycling infrastructure if the UK is to cope with an increase in recyclable materials.

At the Whitehall and Industry Group Plastic Waste Reduction and Recycling Workshop it was estimated that even if we continue to export recycling at our current rate, we will still need another 600 tonnes of capacity in the UK.

Whilst the government has committed to spending £3 billion on waste infrastructure by 2042 this seems minimal compared to the £700 million plus currently spent by councils on waste management in England alone per year. There is also no clear guidance on what types of packaging and materials producers should turn to. The government is awaiting a review of bio-based and biodegradable plastics and it is still unclear when the government will put forward a list of core materials to be collected by all authorities.

This lack of guidance puts the onus on businesses to innovate themselves.

How should your business respond?

Despite some of the limitations of the resources and waste policy, we think overall it provides a real opportunity for businesses.  As the strategy points out “we use five million tonnes of plastic in the UK every year, nearly half of which is packaging”.

Consumer awareness and customer pressure is growing as the environmental implications of this volume of packaging and plastics are becoming increasingly evident.

In the last two years, we have already seen a boom in re-usable coffee cups, metal straws and bamboo toothbrushes ousting conventional uses of plastic. With the onset of taxes and legislation from the government, now is the time for businesses to reconsider their packaging options, innovate and start future proofing.

We have outlined a four-step approach for businesses to minimise the environmental impact of their packaging-

  • Firstly, businesses should review what packaging is necessary and what can be phased out
    Ecover has invested in refilling stations where customers can save both money and plastic by taking their old bottles to stores to refill washing up liquids, laundry liquids and all-purpose cleaners, thereby reducing the number of plastic bottles produced.
  • Where it is not possible to reduce or remove packaging businesses should increase the recycled content of their packaging to minimise the amount of virgin material needed
    In June 2018 Highland Spring introduced a trial of the UK’s first 100% recycled bottle, labelled eco bottles. Last month in January 2019 it was announced they will now be permanently launched as customers expressed ‘significant desire’ for more eco bottles.
  • Thirdly, businesses should ensure they procure products which can be easily recycled by customers and staff
    Co-op provides clear instructions on how to dispose of packaging with 3 labels – green means widely recycled, black means check your local recycling and black with a cross means not currently recycled. This ensures that products end up in the correct waste streams and help to increase recycling rates.
  • Finally, businesses should actively help to boost recycling rates by encouraging customers and staff to recycle more
    Coca-Cola is investing in several initiatives to help collect and recycle the equivalent of every bottle they sell globally by 2030 – this will mean working with many partners including local communities, NGOs, customers and consumers.

Initiatives like those outlined above both prove to consumers that companies are taking action to use packaging more sustainably and will help future proof against new taxes and charges.  For example, the Ellen MacArthur Foundation and McKinsey estimated that the FMCG sector could save a potential £650 million in material costs from recycling alone.

The Resources and Waste Strategy has shown that the government is taking our plastics and packaging problem seriously and that businesses should expect the legal requirements around packaging and especially plastics to change rapidly in the near future. It is it now up to businesses to innovate and step up to meet the government’s challenges to help reduce plastic consumption and responsibly deal with waste and its environmental impacts.

You may also like to read: We have a problem and a lot of plastics

Avieco works with companies to develop their own approach to meeting the plastics challenge and become more waste efficient. We look at a range of factors from helping you to select the right plastics alternative for your business to improving on-site recycling.

By starting now, you have the chance to get ahead of the legislative curve and address one of the greatest sustainability challenges of our time.

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