Pre-consumer Material and the Plastic Packaging Tax
The UK Plastic Packaging Tax (PPT) came into force on 1 April 2022. Companies need to incorporate 30% recycled content into their packaging or they will be charged £217.85 a tonne (increasing from April 2025 to £223.69 per tonne in line with CPI).
The plastic packaging tax provided a definition for recycled plastic as ‘plastic waste that has been reprocessed from pre-consumer plastic or post-consumer plastic by using a chemical or mechanical manufacturing process’. It goes onto define both of these terms (1).
In 2023, as part of a consultation on chemical recycling and adoption of a mass balance approach, the government consulted on whether to stop pre-consumer material from counting towards the 30% recycled content target. A government response to this consultation in 2024 confirmed that pre-consumer material would be removed. The timescale for this is to be aligned to the approval of mass balance when calculating recycled content for the tax (however, a timescale has not been provided for this yet).
The BPF recognises the government’s motivation regarding removing pre-consumer material from being included within the scope of the Plastic Packaging Tax. However, it is aware of the investment that has been made by companies and the challenges to using post-consumer material in certain applications. Due to this, a phased approach — not aligned to the implementation of mass balance — would seem appropriate.
Why is pre-consumer material being removed from the Plastic Packaging Tax?
The definition of pre-consumer material has been a ‘grey’ area within the tax and potential fraud has been a concern. A lack of clarity regarding definitions of ‘pre-consumer material’ has not helped matters. The definition has therefore been open to interpretation by individual companies.
The government stated in its response that pre-consumer waste has created a tax loophole (2), with companies benefiting from a tax relief when they were already recycling pre-consumer waste. It also recognises the difference in cost between recycling pre- and post-consumer material. It wants the tax to create a greater demand for recycled plastic created from post-consumer waste.
Investment in recycling infrastructure
The BPF is aware that some companies invested in recycling machinery to enable them to recycle pre-consumer material. This was a considerable investment, made with the understanding that this material would enable them to reach the 30% recycled content needed to avoid paying the tax. Although the machinery can continue to be used, if savings from the tax can no longer mitigate some of its cost, some companies may find themselves in a disadvantageous position.
Pre-consumer waste and flexible packaging
Some flexible packaging companies will find it harder to shift away from including pre-consumer material within their ‘recycled content’ use than those making rigid plastic packaging. This is largely due to a lack of post-consumer material that meets their requirements. Ensuring consistent quality of post-consumer material is especially difficult in cases where certain technical requirements must be met for that material to be used within particular processes, such as when manufacturing blown film. It is not possible to manufacture some technical films, for example, using post-consumer material, and suppliers of these would therefore be required to pay the PPT, despite producing a product that is highly resource efficient that meets a clear need within the supply chain. An example of this is medical waste bags, where high quality material is essential to prevent bags splitting or tearing. In this situation a breakage in a bag would create an infection risk for staff and patients.
A lack of transparency and the fact there is no agreed system of verification also risks embedding an uneven playing field, with some non-UK companies reportedly making questionable claims about the amount of recycled content in their products, and there is no legal means or regulatory mechanism to challenge these claims.
Post-consumer material does include material generated from households, commercial facilities, industrial facilities and institutional facilities if it is generated by the ‘end user’. This may help with some respite, as some of these sources can provide higher quality material than that collected from households, assuming adequate collection mechanisms are in place.
Many companies have invested considerable time in establishing products and a customer base that uses pre-consumer material, and progress in this area could be lost
Chemical recycling and pre-consumer material
The government has tied the removal of pre-consumer material to the decision on accepting mass balance methodology regarding chemically recycled material because chemical recycling will create additional recycled material and will produce ‘virgin-equivalent’ material that can be easily incorporated into products.
However, chemical recycling facilities take considerable time to secure investment, find a suitable site and to be constructed. This means that after legislation is produced on mass balance, the UK is not going to benefit from recycled material from a UK-based chemical recycling source for many years (the BPF expects this to be around two to five years). Aligning the decision on mass balance to phasing out pre-consumer material within the scope of the PPT is therefore not compatible. Even if investment decisions are made ahead of the legislation coming into force, the timescales would be tough to align. Furthermore, initial costs for chemically recycled material are likely to be high, which would prevent access to some companies and make it cheaper for them to pay the tax. This risks the tax moving from something intended to change behavior to something simply raising revenue by taxing companies already facing challenging conditions.
In conclusion…
The BPF recognises the government’s motivation regarding removing pre-consumer material from being included within the scope of the Plastic Packaging Tax. The difference in cost between recycling pre- and post-consumer material is significant and needs to be acknowledged.
The BPF also shares the government’s concern regarding fraud within the Plastic Packaging Tax and understands the contentious area that ill-defined pre-consumer material has created. However, some companies have made considerable investment in recycling machinery to recycle pre-consumer material.
When it comes to timescales, removing pre-consumer material from the scope of the PPT and mass balance being introduced to enable the growth of chemical recycling should be decoupled from each other, as they are not heavily related.
There is currently a lack of available material and certainly a lack of financially viable material to allow for a full shift away from pre-consumer material, with some companies reporting it will actually be cheaper to simply pay the tax. It is therefore advisable that the government lays out a phased approach to allow industry time to transition, permitting an amount of pre-consumer material during a suitably agreed transition period. This is because new sources of PCR need to be found, new legislation must come into effect, new material specifications need to be agreed, and for those manufacturing stretch and shrink films, for example, production testing will be required to ensure suitability and performance. UK plastics recyclers may also need to reconfigure equipment to accommodate greater recycling volumes of PCR scrap.
If a phased implementation is not applied, there is a risk that UK jobs in the plastics recycling and plastic packaging sectors will be lost as businesses shift to a supply of imported packaging products and imported recycled material. Non-UK companies are currently capable of making claims about recycled content levels; these cannot be verified. In addition to costing jobs, this risks undermining the government’s efforts towards developing a circular economy within the UK.
Further investment in UK-based recycling technology and infrastructure is still needed to increase the amount of post-consumer material that is recycled domestically. Support for those who have invested heavily in pre-consumer recycling facilities should be allocated to help aide this transition.
It may make sense to align with Europe on the deadline for recycled content from post-consumer sources. Under the Plastic Packaging Waste Regulation (PPWR) the target for the use of recycled content is not until 2030. Aligning with this would reduce the administrative burden for global companies or those exporting, to keep a level playing field and to simplify the UK’s ongoing trading relationship with the EU.
Sources
(1) Plastic packaging tax definition of pre-consumer plastics according to Government Guidance - “Check which packaging is subject to Plastic Packaging Tax”
(2) Consultation outcome: Plastic Packaging Tax - chemical recycling and adoption of a mass balance approach
Published March 2025
