Hammond's Plastic Tax and Defra consult on banning single-use plastics, but what's next for our resources and waste sector?

Late October saw Defra launch its consultation on banning the distribution and sale of plastic straws, plastic-stemmed cotton buds and plastic drink stirrers in England.

Defra is particularly keen to hear views and read evidence concerning additional costs or constraints to business of the proposed ban, what the impact might be on the price per unit of non-plastic alternatives, and predictions on what the likely impact on consumers will be.

It is also keen to hear of possible exemptions to the plastic straw ban for explicit group- those with specific medical or other accessibility needs for example and whether alternative straws would be suitable in a hospital environment.

So don’t be shy, we have until 03 December 2018 to respond, and I think this is one of those consultations which needs a strong response from all interested parties, as it will have ramifications for businesses and consumers alike.

Although I am in favour of banning these single-use item plastic products, I am not convinced this is the answer to our waste management problem or our marine plastics pollution problem, at least not in isolation. However, I hope that this is simply the first step in a series of consultations, initiatives and new policies that will come together over the next few months in a coherent and integrated way, providing the sector with the clarity it needs to change and stimulate investment, all within a suitable timeframe.

European interventions ramp up

The European Commission’s Environment Committee recently approved measures that would oblige plastic bottle manufacturers to meet a 35% recycled content target by 2025, while only beverage bottles that could be recycled would be allowed onto the European market.

This was approved by the European Parliament at the end of October and is widely considered as good news by Europe’s recycling and reprocessing sectors, giving the manufacturers a clear remit to change their design. At the same time this ruling should provide the right signals to the market that more recovered polymers will be required across Europe, which should encourage the creation of a steady market for plastics (HDPE and PET primarily) and ensure more circular use of these plastics.

Meanwhile, the Environment Committee also voted through a range of policies to cut back on single-use plastic, including a ban on plates, cutlery, straws and cotton buds. In addition, ‘very lightweight’ plastic bags, products made of oxo-degradable plastics and fast-food containers made of expanded polystyrene will also be banned.

Abandoned fishing equipment and items such as wet wipes and tobacco filters would also be covered by a part of the legislation, all of which stem from a desire by EU Members to lead from the front in addressing marine based pollution, with the ban coming into effect as soon as 2021. Again, this is considered by most as being a positive step to driving manufacturers to reusable products and alternative materials which are easier to recycle.

Member States will also be required to collect and recycle 90% of plastic drinking bottles by 2025. This will be a challenge for all countries in Europe, in particular the UK. That alone is a good reason for DEFRA to launch their Resources & Waste Strategy before Christmas, leading with a strong EPR message for consumers, manufacturers and retailers alike, who must help to capture plastic drinking bottles from home, work and on the go locations.

However, as when any new legislation is initiated, one critical step we must get right from the outset concerns scope and definitions, which is something that HM Treasury have struggled with since earlier in the year when it launched its consultation on a single-use plastic tax. Everyone I speak to seems to interpret single-use in a slightly different way.

As such, Environment Ministers from EU member states have called for strict guidelines to be developed on the definition of ‘single-use’ plastics, alongside standardised labelling on products. Perhaps HM Treasury can share its insights with the rest of Europe, or are we all going to re-invent the wheel in the coming months on what is and what isn’t single-use?

The Budget has landed

In his recent Autumn Statement, Chancellor Philip Hammond kept the pressure up on plastics with his plan to tax plastic packaging that has insufficient recycled content.

He said: “there will be a new tax on the manufacture and import of plastic packaging which has less than 30% recycled plastic content”, but could not tell us when the consultation for this policy would begin.

He did however confirm it would focus on the scheme’s detail and timetable. This matches the recycled content target set out in WRAP’s UK Plastics Pact, but the Chancellor has stepped up the time scale by proposing to introduce the tax in 2022 (three years earlier than the deadline industry has set itself through the Pact).

This is indeed good news for our sector but is a little disappointing given that only a week earlier the EU had decided on a 35% target for plastic bottles. Is this a sign that the UK isn’t going to be the world leader that Defra and others had been suggesting just a few months ago, and will Treasury tighten the reigns further on Defra as it strives to re-invent the sector post-Brexit?

Or perhaps Treasury’s light touch on plastics may be a signal that environment secretary Michael Gove is going to make some major announcements in the near future on other aspects of the plastics debate, as well as the wider waste and resource space. Only time will tell, and that clock is definitely ticking.

Nonetheless, the tax in itself should provide a clear economic incentive for businesses to use recycled material in the production of packaging which, in turn, will create greater demand for this material.

The new tax should take effect from 01 April 2022 and any monies raised from the tax should be ploughed back into support for wider action against single-use plastics. This type of ring-fencing is quite uncommon, and we hope that the Chancellor is as good as his word, but we will have to wait for the consultation documents before we are sure of this.

But don’t get weighed down by the number of consultations heading our way, this is a great opportunity for each and every one of us to have our say on how the tax works and what applications the tax could support – so watch this space closely.

The Chancellor also said: “he had been urged to impose a levy on disposable plastic cups” but had concluded that in isolation this would not deliver a decisive shift from disposable [cups] to reusable ones.

I tend to agree with him on his rationale, but I would have still used the Budget to tax ‘disposable activities’ like ‘on-the-go’ coffee consumption as well as tax plastic packaging with low recycled content – together this would have been a very compelling message to consumers and producers alike ahead of Defra’s Resources & Waste Strategy which is expected to provide the wider policy framework and some of the missing details from the consultations launched to date.

However, the Chancellor did leave the door ajar for a future ‘latte levy’ if sufficient progress isn’t made, and even threatened a possible incineration tax should wider policies not deliver the government’s waste ambitions in the future. This suggests that the Resources & Waste Strategy will address packaging producer responsibility head-on, while other policy areas, targets and incentives are waiting to be launched before Christmas.

A Home Run?

So what’s next in our rapidly evolving sector? The Resources & Waste Strategy will be with us before Christmas we are promised, although I hear the end of November is looking more likely.

This should lay out the policy framework, specific targets and link up existing consultations and policy statements, with targets and statements as set out in previous government strategies including the 25-Year Environment Plan, the Clean Growth Strategy and the UK Industrial Strategy. That’s a lot of jigsaw puzzle pieces that need to fit together, in a short period of time, so let’s stay positive for now.

We already know that government will be consulting on EPR (in terms of the scheme design & operation), Full Cost Recovery (in terms of target levels, leakage and how the money will flow), and DRS (the first plastic intention put forward by Gove back in March, where we need to confirm is it an ‘on the go’ type system or a more inclusive approach).

These will all be launched within a few weeks of the Resources & Waste Strategy, so that really will be a busy Christmas, in between family parties and over-indulging on food and wine, as we digest the documents and prepare our submissions, most of which will be done by the end of February 2019.

Plus, I am expecting some form of consultation on local authority targets, differential recycling targets and funding options as this is key to reaching the 65% recycling target we have already signed up to.

So much happening in the coming weeks, yet we cannot afford to miss these opportunities to have our say and to help shape the details of new policies, taxes and solutions. So don’t let Christmas get in the way of preparing a full and robust response – talk to your peers, chat with your value chain, engage your customers and clients and ensure you contribute fully.

I hope Defra has been listening and will ensure that the Resources & Waste Strategy will pull the jigsaw together, leaving us full of hope and expectation in the New Year – even if we have to work through Christmas to ensure they continue to listen to the sector’s needs and demands. Over to you.

This blog was originally published on http://www.recyclingwasteworld.co.uk on 06 November 2018.