EU set to introduce Plastic Tax – January 2021

plastic bottles

Recently the European Council, as part of the COVID-19 recovery package signed an agreement for new environment-related measures including the so-called “plastic tax”. The EU will start collecting tax on non-recyclable plastic to encourage the reuse of plastic but, at this moment, it is not entirely clear how this will be collected.

The tax will be calculated on the basis of the weight of non-recyclable plastic packaging waste at an expected rate of €800/Tonne. Member States will have to collect the tax but the revenue should be remitted to the EU. It is envisaged that the new tax will come into effect on January 1, 2021.

The details on the tax will have to be worked out in a specific law and approved by the European Parliament and Council of the EU and it seems likely that there will be flexibility on how each Country decides to collect the tax. It could be that some States elect to pay the tax from central funds while others may look to establish national schemes. The EU expects to complete this ratification process by the end of December 2020 so that the new system can start operating from next January.

The impact on businesses and consumers will depend on how Member States choose to collect the tax, the specific sectors, definitions of the products subject to the tax and mechanisms for collection.  This could range from a tax on manufacturers of non-recyclable plastic, the company purchasing non-recyclable plastic or for example, the producer of goods using the plastic for consumer packaging.

Impact on business is uncertain, but compliance to a new tax will likely mean a greater focus on quantification, knowledge of the plastic types and the flow of plastic in the supply chain.  It is envisaged that the tax will incentivise a range of activities from swapping from plastic to paper, cotton and wood materials, re-use, and moving from complex multilayer/multi-material designs to simpler mono-material solutions.  Others report that the additional costs may simply be passed on to the consumer.

One thing that is clear is that businesses that develop a greater understanding of the options and opportunities to improve recycling rates will be better positioned to respond to their obligations, whatever approach is taken.  RPM provides a systems approach for accounting for plastic within a business and supply chain and will maintain a watching brief on the situation.

RS Standards uses the tools provided by the RPM Program to support organisations to meet these new requirements. Please get in touch with our team today to discuss the opportunity to utilise our systems approach.

Dave Garforth

RS Standards Consultant