HMRC approve chemical recycling in Plastic Packaging Tax

On 31 October, government confirmed that a mass balance approach (MBA) would be permitted to account for chemically recycled plastic for the purposes of the tax.  

The response follows a consultation held in 2023, whereby stakeholders were asked whether the percentage of recycled plastic in packaging could be calculated via mass balance in relation to chemical recycling processes, and what controls should be in place if it were so.  

There was much industry support for this as previously the only viable way for an obligated businesses to prove an excess of 30% recycled plastic in their products – and therefore become tax exempt -  was via mechanical processes.  

Many stakeholders, in responding to the consultation, were additionally in favour of allowing an MBA in the hope it will galvanise industry investment and increase UK chemical recycling infrastructure. This is because chemical recycling, as opposed to plastic mechanical recycling, is often a better solution for some types of plastics – such as soft and flexible plastics.  

The statement outlines that government will need to complete further technical engagement with industry and develop draft legislation ahead of confirming the date in which the change will be applicable.  

It was also announced, as it has done every year, that the rate of tax will increase to £223.90 per tonne of plastic packaging manufactured or imported that contains less than 30% recycled content. This is in line with the Consumer Price Index, or inflationary increases, and will apply from 1st April 2025 

The full consultation outcome can be found here.