Plastic Packaging Tax consultation launched on chemical recycling and adopting a mass balance approach- have your say!

Under the UK Plastic Packaging Tax (PPT), payment is not charged for plastic packaging components that contain at least 30% recycled content. HMRC are consulting from 18th July to 10th October to determine whether businesses should be allowed to use the mass balance approach for calculating recycled content in chemically recycled plastic used in packaging, for the purpose of PPT exemption.

What is Chemical Recycling?

Chemical recycling or non-mechanical recycling is a blanket term for different recycling processes such as pyrolysis, gasification, chemical depolymerisation and dissolution where plastics are broken down into base polymers. These technologies can ‘clean’ the plastic waste by effectively breaking down the polymers to their chemical building blocks, creating feedstocks that can be used to make virgin grade material. Chemical recycling therefore complements mechanical recycling, particularly where it is not feasible, technically or economically, to mechanically recycle plastics e.g., films and flexibles. In most chemical recycling processes recycled feedstocks are typically mixed with virgin feedstocks through continuous processes making it impossible to track specific recycled output. Businesses have therefore been unable to evidence actual recycled content in chemically recycled plastics for the purpose of the tax.

What is a mass balance approach?

Mass balance approach is a Chain of Custody (CoC) model that is used by industries to track materials through a complex value chain. It enables recycled or sustainable inputs, which are mixed with virgin materials during the process, to be allocated to particular outputs. This can be at batch level, site level and group level. The approach is commonly used in sectors such as timber and cocoa, to allocate sustainably sourced materials to products.

HMRC seek to identify:
  1. How mass balance could be used for the purposes of Plastic Packaging Tax?
  2. Which certificate schemes could be used?
  3. Identify the controls and standards that should be applied to maintain tax integrity

Acceptance of the mass balance approach could allow businesses to use chemically recycled plastic and evidence recycled content, particularly in food and medical sectors where health and safety regulation currently inhibits the use of mechanically recycled plastics. This will in turn would boost chemical recycling infrastructure, complimenting existing mechanical recycling practices and improving UK plastic recycling capabilities and thus general circularity of plastics. 

If you wish to communicate your own response, details can be found on the GOV.UK website.

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Have your say on the consultation!

Beyondly are formulating a response to HMRC on behalf of our members. If you would like to contribute, please let us know by signing up to our summary form.