The UK government plans to allow chemically recycled plastics traceable through certified quality balance accounting to qualify for exemptions under the Plastic Packaging Tax (PPT). Introduced in 2022, this tax targets plastic packaging with a recycled content of less than 30%.
Simultaneously, pre-consumer waste (scraps and waste generated during manufacturing, or PIR) will be excluded from the scope of recyclable materials. The government stated that excluding pre-production waste from the definition of "recyclable materials" is to close this loophole. Officials believe that including manufacturing scraps and waste in the definition of recyclable materials would prevent the tax from achieving its environmental goals and could lead to disagreements within the industry regarding its implications.
These changes will take effect on April 1, 2027. They will apply to UK plastic packaging manufacturers and importers, their business customers, plastic recyclers and reprocessing companies, petrochemical companies engaged in chemical recycling, and consumers who purchase goods packaged in plastic. Since April 2022, the UK has levied a plastic packaging tax on packaging products containing less than 30% recycled plastic. The initial tax was £200 per tonne, increasing to £210 per tonne in April 2023, £217.85 per tonne in April 2024, and £223.69 per tonne in April 2025.
The UK Treasury noted that while significant progress has been made in chemical recycling technology since the tax's implementation, many manufacturers cannot demonstrate how much of the raw materials used in the processing are chemically recycled.
The Quality Balance Mechanism, a regulatory system already adopted by industries such as timber and cocoa, tracks the origin and destination of materials in complex supply chains to ensure the sustainability of related production activities.
In 2023, the government conducted a 12-week public consultation to discuss whether this mechanism should be applied to chemically recycled plastic products and the specific operational methods of the related certification system.
The UK's Food and Beverage Industry Council (FDF) welcomed the government's budget announcement, believing it would eliminate the need for businesses using mechanically or chemically recycled plastics to pay hefty plastic packaging taxes.
