Food and beverage companies will be taxed on plastic packaging that contains less than 30 percent recycled content, the UK Chancellor Richard Hammond announced yesterday in the 2018 Budget speech. The tax aims to “transform the economics of sustainable packaging” and posit the UK as “as a world leader” in tackling the scourge of plastic littering across the world and its oceans.

The new tax will come into force in April 2022, following a period of consultation on the detail and implementation timetable.

“wher we cannot achieve re-use, we are determined to increase recycling so we will introduce a new tax on the manufacture and import of plastic packaging which contains less than 30 percent recycled plastic,” noted the Chancellor in his speech.

Hammond chose not to introduce the much-debated “latte levy” on disposable coffee cups, noting that this tax in isolation would not “deliver a decisive shift from disposable to reusable cups across all beverage types.” However, he indicated that this topic would be revisited if “sufficient progress is not made.”

UK management and plastics recycling company Veolia has welcomed the proposed tax: “The Chancellor focused on delivering a level playing field for manufacturers and the recycling sector, helping to bolster the circular economy and protect our common environment. The tax announced has the potential to ensure recycled content becomes the currency of production,” says Richard Kirkman, Chief Technology and Innovation Officer, Veolia UK & Ireland.

“Industry, government and consumers have mobilized this year to tackle the plastic challenge and Veolias intention is clear – by opening two domestic recycling facilities in the last 12 months and committing to invest £1 billion in infrastructure in the next five years we are backing UK recycling.”

“To make the UK a waste-to-resources heavyweight we must also remove confusion for consumers and encourage investment in domestic infrastructure to secure a circular approach for the next generation,” he adds.

UK recycling has faced pressures recently, such as a potential investigation into allegations of illegal conduct as well as mounting costs following China’s restrictions on imports of mixed paper and plastics. At least 20 percent of UK councils have felt a direct impact from the, with some noting increased recycling costs of US$647,000 (£500,000) since the restrictions, a poll by the Local Government Association (LGA) revealed. Veolia and Unilever recently entered a collaboration focused on developing a global circular plastics economy.

The EUs majority approval of a ban on single-use plastics attracted global attention recently. Representatives of EU national governments are expected to meet soon to agree on their joint position. The three-way negotiations between governments, the European Parliament, and the European Commission could then start as soon as early November.