Third Report - The price of plastic: ending the toll of plastic waste

Despite progress in reducing the use of some problematic plastics and plastic products and creating an uplift in recycled content in new plastic production, progress in tackling plastic waste appears to have slowed in recent years. Current initiatives are clearly not driving progress as effectively as possible. Some of the definitions and metrics for the targets driving change need to be improved to make them: clearer and less ambiguous; more ambitious and measurable; and more reflective of the waste hierarchy with a strong focus on reducing the amount of plastic waste created in the first place. However, with this focus comes the need to ensure that plastics are not replaced by possibly more impactful materials as plastic usage is reduced in the future.

We recommend the 2042 target for the elimination of plastic waste should be reaffirmed by the new Government but, crucially, without the qualifier “avoidable”. The goal would be clearly defined as ensuring that all plastic waste is recycled, reused or composted by 2042. The new Government should also set out two-year milestones to drive progress towards this target.

We also recommend that other government targets be revised to reflect and implement the waste hierarchy. These changes should cover: • Reducing the volume of plastic that is put on the market. Where plastic is replaced with other materials, the new Government should commit to monitoring whether those replacement materials are more sustainable. • Reuse targets to increase the market share of reusable plastic products, particularly packaging. • Recycling rate targets that measure how much packaging is actually recycled, rather than whether it is theoretically recyclable.

The new Government should commit to reporting on progress against all these targets annually. We also recommend that the Government should devise mechanisms to enforce these targets either through an existing regulator or upcoming reforms. (Paragraph 26) Extended producer responsibility for packaging

The introduction of Extended Producer Responsibility (EPR) for packaging is a welcome reform that has the potential to drive progress towards a more sustainable plastics economy. However, the lack of information about the EPR fee scheme and the two-year delay in implementation mean that achieving meaningful change in packaging design in the short term is unlikely. Despite the former Minister’s assurances that the scheme will be fully operational by 2024, we cannot see how that can be the case if the modulated fees that underpin the scheme will not fully be in 58 The price of plastic: ending the toll of plastic waste place until 2025. To make progress towards 2025 targets, the delivery of EPR needs to be expediated and information for businesses provided well in advance to give them time to adapt.

We recommend that the new Government reaffirms its commitment to Extended Producer Responsibility for packaging and a re-accelerated process to implement the system in order to meet the targets set for 2025. This requires publication of a consultation on EPR fees and any accompanying guidance in early 2023 and the introduction of the fee system by 2024.

We agree that it is best to continue the Packaging Waste Recovery Note (PRN) system in the short term to ensure some continued funding for the reprocessing sector. Government should ensure that any temporary dual-running system, and the added complexity it brings, does not become permanent. We welcome the previous Government’s proposal for a taskforce to help navigate the way to a full EPR system in the future but we are concerned about the lack of a clear timetable for this change.

We recommend that the Government develops a clear exit strategy for any dual running of Extended Producer Responsibility (EPR) alongside a legacy Packaging Waste Recovery Note system. This exit strategy should be published no more than a year after EPR is introduced. This strategy should explain how we will arrive at a comprehensive EPR system that covers the total costs of managing plastic waste— including commercial waste. This would be an appropriate job for the previously proposed EPR Taskforce.

We understand the logic behind some of the changes the previous Government made to its Extended Producer Responsibility (EPR) proposals in response to the last consultation. We sympathise with the aim of reducing the financial impact on individual producers to avoid an escalation of food prices under EPR for packaging. However, there is a risk that exempting a large number of smaller producers from financial obligations—and no longer covering the costs of commercial waste— could undermine the scheme’s aims to make ‘polluters pay’ and incentivise more sustainable product design. We recommend that the Government should set out a roadmap for lowering the threshold for financial obligations under EPR so that by 2030, producers placing 1 tonne of packaging on the market or more should pay the cost of managing its disposal. (Paragraph 47) Refill and reuse

We understand that promoting plastic reuse is a challenging part of this policy area but increasing the uptake of reusable packaging is essential for reducing the total amount packaging consumed in the UK. Government must ensure that any Extended Producer Responsibility system fully incentivises all routes for tackling plastic waste—not just recycling—and should give the greatest incentives to options that are higher up the waste hierarchy: reduction and reuse.

The new Government should publish, in 2023/24, its plan for reuse and refill obligations that will be introduced in 2025 under Extended Producer Responsibility (EPR) for packaging, so that businesses can begin the process of adapting their product The price of plastic: ending the toll of plastic waste 59 designs and supply chains. We also recommend that the proposed review of the new EPR scheme, planned previously for 2026/27, is tasked with considering changes to EPR fees that would encourage the use of reusable packaging. This review should also examine the feasibility of using the scheme to encourage more generic/universal packaging.

Achieving the widespread adoption of reusable packaging and refill would require fundamental changes to a large part of our economy and to the mindset and behaviour of companies and consumers—it will not be possible to deliver this using the Extended Producer Responsibility reforms alone.

We recommend that the Government create a reuse taskforce containing representatives from industry and consumer groups. This taskforce should develop to a suite of measures to encourage, incentivise and require businesses and consumers to adopt more reuse habits and systems. This group should consider measures including charges on single-use products, mandatory reporting on companies’ plastic footprints, and how to raise public awareness of reuse schemes through campaigns as well as guidance and incentives for businesses. (Paragraph 59) Waste management infrastructure

We welcome the introduction of the Plastic Packaging Tax (PPT) which is expected to increase demand for recycling plastic material and re-encourage investment in the recycling sector as it grows to meet this demand. We call upon the new Government to commit to maintaining and developing this fiscal measure.

However, there is a risk that PPT, as currently designed, will not deliver against its intended objectives. A flat 30% recycled content requirement may well prove too easy for some sectors to achieve while acting as an unavoidable financial penalty in sectors with no viable alternatives, encouraging producers to swap to more environmentally damaging options. We recommend that the Plastic Packaging Tax (PPT) should be modulated with different, stretching targets tailored to different sectors and including partial exemptions for recycled content levels below the level at which a full exemption is granted, but above 10%. The Government should also set out a timetable for increasing the percentage of recycled material needed to attract total exemption from the tax to further stimulate demand for recycled plastics. The first such increase should come into force by 2025.

To ensure the tax is delivering its intended impacts, the Government should publish an analysis of the impact of the tax by the end of financial year 2023/4. This evaluation should test the effectiveness of its verification systems and evaluate whether the tax rate is high enough to bring about the behaviour changes needed amongst producers whilst protecting low-income households. The tax should also be benchmarked against comparable international initiatives.

We welcome the previous Government’s efforts, through the Plastic Packaging Tax and other reforms, to increase the demand for recycled plastics and thereby its aim to make the recycling sector more investable in the long run, helping the UK boost its recycling capacity. However, further action is needed to increase the capacity of the recycling sector more quickly—particularly in the short term—and supply 60 The price of plastic: ending the toll of plastic waste manufacturers with the recycled materials that government wants and needs them to use. We are not convinced that the aggregated current measures alone will resolve the problem of cheaper virgin plastics and unstable returns on investment which hinders investor confidence.

We call on the new Government to commit to its predecessor’s welcome decision to use some of the money generated via its reforms to support investment in recycling capacity. We recommend that the expected infrastructure roadmap—anticipated in late 2022—provides detailed information about how much investment will be provided over what time scale, and identify key areas of government and private investment. As a minimum, it must deliver at least as much investment as the current Packaging Waste Recovery Note system generates for the sector.

We also recommend that, by the end of 2023, the new Government conduct a feasibility study of other mechanisms to encourage investment, including measures to rationalise the plastics market and introduce price-stabilising mechanisms for plastic recyclate, similar to those used for renewable energy. (Paragraph 84) Recycling “difficult” plastics

There is no technological silver bullet to resolve the challenges of recycling plastic waste. We welcome the work of the previous Government and industry to strengthen the mechanical recycling sector. However, it appears likely that this will need to be supported by other technologies in order to create a circular economy and sustainably manage flexible and other hard-to-recycle plastics. This is likely to involve the application of chemical recycling and compostable packaging in distinct areas where mechanical recycling is not a good solution: such as potentially using compostable packaging for food-contaminated products.

By 2023, the Government should update its infrastructure roadmap to set out its plan for the future role of chemical recycling and composting within our plastics economy and waste management system. In particular, the Government must make a decision, based on the latest evidence about their impact on soil health, on the role of compostables, so that the organic recycling sector can adapt alongside the mandatory collection of food waste in 2024/25. If they are to be encouraged, the Government should adapt national targets to reflect their expected use. Product labelling must also be standardised to clearly indicate to consumers how they should dispose of compostable plastics and prevent them from contaminating other plastic waste streams. Labels should avoid unhelpful terms like ‘biodegradable’.

The Government need to publish clear, evidence-based criteria for how Extended Producer Responsibility fees and the Plastic Packaging Tax will apply to new technologies, including compostable plastics and chemical recycling. We recommend the hypothecation of income raised from fees on compostable plastics and chemical recycling to research the most promising versions of these technologies or the development of appropriate recycling infrastructure. (Paragraph 100) The price of plastic: ending the toll of plastic waste 61

Finally, we recommend that the Government should consider the merits of introducing an incineration tax, designed to drive up demand for—and therefore attract private capital investment in—alternative waste disposal methods once they are viable, including mechanical, chemical and composting recycling facilities. (Paragraph 101) International plastics

While upcoming Government reforms to the regulation of waste carrier registration and the introduction of digital waste tracking both have the potential to help combat the dumping of UK waste in foreign countries, the current level of compliance and enforcement activity by the Environment Agency does not appear to be up to the challenge posed by organised criminal gangs increasingly seeking to circumvent the current export regime. We recommend that the Environment Agency’s compliance and enforcement capacity is strengthened to enable more thorough checks of plastic waste exports. To fund this the Government should allow the Environment Agency to reinvest some of the charge income it collects from regulating the waste industry into enforcement capacity. This would be compatible with a recommendation made by the 2018 Independent Review into waste sector crime which called on government to review how the enforcement of waste crime is funded, potentially through broader fee incomes.

We heard that waste crime is a low risk, high reward endeavour and that current punishments are insufficient to deter illegal activity, contrary to the objectives of the EA’s Enforcement and Sanctions policy. We recommend that sanctions for companies caught breaking the rules on exporting plastic waste be considerably strengthened to make them at least comparable to the level of profit made from illegal waste exporting so as to act as a genuine deterrent. The Environmental Agency should also routinely suspend or cancel accreditation for any exporter involved in serious waste export fraud.

Exporting waste will always be vulnerable to crime and while the UK must strengthen enforcement efforts, not every bad batch of exported waste will be caught. Many stakeholders have called on the UK to work towards a ban on all plastic waste exports. Waste management sector representatives believe this could be achievable in only a few years. We believe that a requirement to process all waste domestically will provide a strong market signal to secure investment in domestic recycling infrastructure and support efforts to reduce and reuse more plastics. We recommend a ban on all exports of UK plastic waste by the end of 2027. The Government should publish a roadmap to achieve this by March 2023, setting out milestones towards this target (such as preliminary bans on unsorted or unprocessed waste plastics), as well as a plan for increasing UK domestic reprocessing capacity.

We are pleased that the previous Government signed the UK up to the UN Environment Assembly agreement working towards a global treaty to tackle plastic pollution, and welcome the UK’s founding membership of the related High Ambition Coalition within the forthcoming negotiations. However, we believe that, without the inclusion of legally binding targets, the treaty risks being ineffective in tackling one of the biggest environmental threats our planet faces. We urge the new Government to reaffirm commitments to the UN Environment Assembly (UNEA) 62 The price of plastic: ending the toll of plastic waste initiative to deal with plastic pollution and to the High Ambition Coalition supporting the process. We also recommend that the new Government plays a leading role in future UNEA negotiations by pushing for legally binding targets to be included in the treaty. (Paragraph 129) Improving data systems

We reiterate our recommendation that reporting requirements under Extended Producer Responsibility for packaging should cover those businesses producing one tonne or more of packaging in order to capture as much data as possible. The Government must ensure that requirements upon producers to provide information are comprehensive and includes full details about the type and quality of the plastics put on the market. This will help encourage businesses handling and disposing of packaging to capture and reuse these products and materials.

Better data is essential for delivering a circular economy. More effective information will enable an understanding of the scale of the problems faced, the composition of the plastics put on the market and what systems are needed to help society dispose of or recycle products more sustainably. Upcoming government reforms are a good start and particularly we welcome previously announced plans to bring forward a simple, mandatory “Recycle” “Do not recycle” labelling systems for plastic waste: this will communicate clear information to consumers.

However, the incoming Government needs to join up its existing proposals for data collection under Extended Producer Responsibility for packaging and waste tracking to create a unified system. The previous Government’s argument—that such a system is less useful for ‘single-use items’ like packaging—is flawed. Packaging needs to be valued so that it reused, retained and recycled in the most efficient ways possible. The new Government should follow up on its predecessor’s proposal that “recycling enablers” could be a mandatory part of Extended Producer Responsibility for packaging and work with industry to develop a comprehensive marking system that will integrate with digital waste tracking in the future. As well as providing data on the life cycle of plastic packaging and how it is used and disposed of, this marking system should openly share information about the nature of plastics on the market. This will help all stakeholders in the supply chain understand and maximise the value of such material and create the most efficient recycling system for them. (Paragraph 141) The price of plastic: ending the toll of plastic waste 63