Origin of plastic tax
In recent years, plastic reduction has always been an important topic on the international negotiation table. Although there has been a temporary slowdown due to the impact of COVID-19, now after the epidemic, plastic restriction and plastic reduction issues have returned to the forefront, especially when it is expected to be enacted in 2024. The Global Plastics Treaty will be legally binding on countries around the world and is expected to pose a new wave of challenges to the plastics industry.
In response to the impact of COVID-19 on the global industry, the European Union launched the NextGeneration EU economic recovery plan in 2020. The new plastic tax is one of the important measures to increase the EU's overall budget and will be levied starting in 2021.
The basis for the collection is based on Eurostat data, based on the total amount of non-recycled plastic packaging waste in member states in the previous year, and is levied at a rate of 0.80 euros per kilogram. Taxation is expected to generate an annual tax injection of approximately 6 billion euros (Detailed Figure 1).
Figure 1:EU plastic tax collection rates
Current status of international plastic tax
In response to the EU plastic tax levied from 2021, the response strategies adopted by EU member states vary according to the management policy trends of each country. Some countries have launched their own domestic taxation systems in response to the EU plastic tax. This article explains the United Kingdom and Spain, which have implemented relevant tax and fee systems, and compiled a comparison table as shown in Table 1.
(1) United Kingdom
The UK will levy the "Plastic Packaging Tax (PPT)" in April 2022. It will levy a tax on plastic packaging produced in the UK or imported to the UK whose plastic recycled material content is lower than 30% to encourage the use of plastic recycled materials in plastic packaging. of use.
The UK imposes a levy on plastic packaging at £200.00/ton, and the rate increases year by year. If multiple components are involved in the package, each component will be judged separately. As long as the plastic weight accounts for the highest proportion among the components, the component will be subject to the levy, and the levy will be based on the total weight of the components. (Example: The total packaging component is 10 g, including 6 g of plastic and 4 g of aluminum foil. Since plastic is the material that accounts for the largest weight of the component, the packaging component is subject to levy, and the levy is based on the entire packaging component of 10 g. )
In addition, parts using plastic recycled materials with a total weight of 30% are exempt from tax. As for the proportion of plastic recycled materials in products, third-party verification is not mandatory, but production data must be submitted for document review.
(2) Spain
Spain released "Law 7/2022 on waste and contaminated land for a circular economy" in 2022, creating a new tax system to prevent the production of non-reusable plastic packaging, and it has been levied in January 2023.
Spain imposes a levy of €0.45/kg on "plastic components in non-reusable packaging". As long as it meets the definition of non-reusable packaging in the regulation, even if plastic is not the main component of the packaging, it must be levied on the content of the packaging. Plastic weight is levied.
In addition, the use of plastic recycled materials is tax-free, and the proportion of plastic recycled materials used in products can be declared by the manufacturer in 2023. Starting from 2024, a third-party verification certificate must be provided as a basis for tax exemption.
Table 1:Comparison of plastic tax regulations in the UK and Spain
Adding plastic recycled materials to products is an international trend
According to the plastic tax policies of various countries, it can be found that the use of recycled materials in products is a common tax-free condition, and concessions or exemptions can often be obtained in international policies; and as the management system gradually matures, we can also expect that adding plastic recycled materials to products The requirements will gradually become mandatory from encouragement.
Therefore, it would be recommended to conduct an early test of the proportion of recycled materials added to the product and find a stable cooperative recycled material provider. It has become an international consensus to consider third-party verification as proof of the proportion and traceability of plastic recycled materials in products. It is also recommended to establish relevant capabilities as early as possible to enhance industrial competitiveness in relation to the documentation of production traceability.
References:
1. Recovery plan for Europe – European Commission (europa.eu)
2. https://kpmg.com/xx/en/home/insights/2021/09/plastic-tax.html
3. https://www.roedl.com/insights/plastic-tax/
4. wtsglobal-plastic-taxation-in-europe-2023.pdf
Author: Wang Tingxuan, Consultant, Sustainability Strategy Group, Quality, Environmental and Safety Department, Plastic Industry Technology Development Center
