EU announce levy on non-recyclable plastic packaging from 2021

The EU has agreed a levy to be placed on all non-recyclable plastic packaging waste handled by its member states from 1 January 2021. The levy will be €0.80/kg (€800 / Tonne) and funds will be payable directly into the EU budget

The levy was confirmed as part of the EU’s Coronavirus Recovery Strategy, with the original wording on confirmation below:

The levy, to be introduced as of 1 January 2021, will be calculated on the weight of nonrecycled plastic packaging waste "with a call rate of €0.80/kilogramme with a mechanism to avoid excessively regressive impact on national contributions.”

How will this be charged?

The policy is set centrally for EU member states, so individual countries would pay their contribution into the budget at the “call rate” of €0.80/kilogramme, with each member state then deciding how to gather these funds internally (I.e. through general taxation or separate legislation).

Recyclability vs recycled content

The UK is currently consulting on its own Plastic Packaging Tax, aimed at materials placed on the market which contain less than 30% recycled content and is to be set at a rate of £200 per tonne. The EU levy however, is aimed at “non-recyclable” material, rather than based on its composition.

Where will the funds go?

All levies generated will go into the central EU budget, with no plans to ring-fence the monies for the waste and recycling industry. Whilst this does present a good fund-raising exercise for the coronavirus recovery programme (the levycould generate €42 Billion between 2021-2027), many are concerned about the impact this will have on the plastics manufacture and recycling industries.

What does this mean for the UK?

The UK’s plans to introduce a tax on plastics containing less than 30% recycled content will be unaffected by this commitment from the EU. How the EU levy will apply to the UK given the ongoing Brexit negotiations is yet to be seen.

As a non-member state, the levy may well not apply to the UK, however, it is likely that where EU businesses / member states are paying the levy on imported goods from the UK, they will seek to offset their costs on their suppliers. This is a practice already quite common for certain environmental charging legislation (eg. WEEE).

For any queries or thoughts regarding this tax, please email and our Policy team will endeavour to advise.