It doesn’t take long whilst scrolling through LinkedIn or browsing packaging media outlet news feed that you’ll come across a post or an opinion that would suggest that one form of packaging is “better” than the other. Especially when it comes to the debate of paper “vs” plastic and recyclability “vs” carbon emissions.
The comments section is filled with “no it isn’t”, and “”but you’re only consider one thing”, or “there is no one single solution” and I agree with them all.
We must always go back to why we have packaging, it is to PROTECT & PRESERVE
To protect: There wouldn’t be any hunger in the world if there were no food losses. More food is produced than we really eat or utilise. While packaging is powerless to stop waste, it is able to stop spoiling. Although shelf life is constrained, it can be extended. The shelf life of unpackaged beef is four days. Meat that has been vacuum-packed has a shelf life of around 30 days. Increased product shelf life helps prevent food waste and postpone deterioration.
For growth: The flow of commodities increases as a result of urbanisation, expansion, and globalisation, posing new infrastructural issues. Significantly less transport capacity are required throughout the life cycle as a result of the low weight and space savings. Less traffic, less strain on the infrastructure, and less environmental pollution are all benefits of having more merchandise on the trucks. It is feasible to save weight and space during shipment by using thinner films. As a result, the amount of cargo during transportation rises dramatically, and loading zones may be utilised to their full potential. Thus, the life cycle evaluation is enhanced (LCA). Flexible packaging is efficient and economical. Products are more reasonably priced for those with modest incomes when they are packaged in small, economical amounts.
In a technical sense, it is possible to recycle all plastic, and the technology is available. However, in order to sift, recycle, and sell them as raw materials for new products, they must first be gathered. All of this must be accomplished economically. The development of new recycling methods that enable the industrial-scale recycling of even more forms of plastic may take a few years. However, in the interim, the plastics sector is collaborating with the government to achieve the shared objective of streamlining the materials that are gathered for recycling across the UK to make life simpler for individuals.
What we see in the interim is a race for alternatives to plastic as it is somewhat seen as the enemy! Yet time and time again publication and research back the opinion that alternative have a negative impact vs plastics.
The plastics investigated in a recent research by KcKinsey & Company offer lower overall GHG contribution compared with alternatives in 13 of 14 applications for which nonplastic alternatives are deployed at scale. Taking into account both the impact of consumption and the product life cycle, GHG reductions range from 10 to 90%. Additionally, there aren’t many alternatives to plastics today in many applications, particularly those that are centred in food packaging. Given their smaller GHG footprint, plastics use in the near term can actually aid decarbonization efforts in these sectors, notably in terms of food spoilage and energy efficiency.
It all depends on the application
The degree to which sustainability factors are given priority affects the sustainability of packaging materials. Businesses in the value chain will need to be aware of the trade-offs between reducing waste and carbon footprint.
So what is the criteria that should be considered:
Minise the harm that non recyclable packaging will have on the environment
Assess the GHG emission
Recyclability and recycled content
Recycling is effective. Recently the British Plastic Federation concluded in response to the Big Plastic Count that between 30 and 80 percent of the carbon emissions produced during the manufacture and processing of virgin plastic are avoided through recycling. The quantity of plastic recycled has grown 2.4 times since 2006, with the UK recycling 51 percent of plastic packaging in 2020. For the first time ever, the UK recycled more plastic within its borders than it did for recycling abroad last year. Although there is still work to be done, it is apparent that progress has been made.
At Skymark we want to enable & inspire every individual and organisation to do more, using less. With our passion & desire to listen and give a personalised, collaborative experience, developing Innovative, forward thinking packaging solutions
At Skymark we have always been proud to drive innovation through flexible innovation. We first launched our mono structure PE laminates into the wet wipe sector with great success, launching with some of the major retailers such as Tesco, and Waitrose.
We didn’t stop there, we now have our fully recyclable mono structure packaging for the food sector: SKYMONO EB with high barrier for multiple food markets, in particular cheese, sauce & condiments, meat and dried fruits. Providing a direct replacement for current non-recyclable alternatives, SKYMONO EB will meet and in some case exceed current shelf-life requirements, as well as maintaining packing line efficiencies through SIT technology.
We have tested this material on existing flow wrap lines for block cheese and have successfully reached 6 months shelf life within specification, with packs showing same initial snug, maintained cheese flavour and no mould growth.
We enlisted the help of our colleagues at Institut Cyclos HTP in Germany to test our mono-materials for recyclability and NIR detection within the Waste streams. Our product scored very high for recyclability, achieving 95% recyclability under LDPE plastic films with no issues for LDPE NIR detection within the waste streams.
We take another big step toward our SME Climate Commitment to half our CO2 emissions by 2030 and to be net-zero by 2050. As part of our SKYGREEN agenda, we’re pleased to announce that our Scunthorpe facility is now 100% powered by renewable electricity backed by REGOs
What are REGOs?
Renewable Energy Guarantees of Origin (REGOs), are certificates which show that electricity has been generated from renewable sources. Energy generators are given one REGO for each megawatt hour of electricity they produce. All of this is administered by Ofgem (the Energy Industry Regulator).
Renewable energy is energy that comes from sustainable sources. This means that they won’t run out, unlike other energy sources such as coal. Some examples of renewable energy out there include solar power, wind power and hydro-energy.
Why use renewable energy?
Because we only have a limited amount of resources, such as fossil fuels, whereas renewable energy is potentially unlimited. Renewable energy sources also cause less damage to the environment, as well as reduce carbon emissions and the effects of global warming.
It is our top priority to continue to move towards a sustainable future, not only in the materials we manufacture but the way in which we make them. Switching to 100% renewable energy is another contribution to our REDUCE headline under our SKYGREEN agenda.
Big consumer-facing organisations have made bold commitments to achieve zero or drastically reduced greenhouse gas emissions to enhance their overall corporate sustainability performance, including us. Simultaneously, their attention on packaging has been on boosting recyclability and recycled content.
Sustainable packaging efforts are frequently motivated by a goal to not comprise on the primary function which is to protect the product, but the list of desirable packaging solutions is long. Consumers want brand owners and retailers to quantify the environmental or sustainability impact of packaging based on many factors, which will ultimate make consumers feel pleased with their purchase.
Reduce weight or reduced the use of materials
Reduced carbon footprint
Reduced use of other resources
Reuse
Use of recycled material
Use of recyclable material
Use of compostable or biodegradable material.
Even though brand owners, retailers, and regulators recognise the importance of sustainability, there is no universal method or solution on how to implement it across these interconnected factors. There is no one solution that fits all.
However the vast array of design options to improve the sustainability story could be handled in two stages:
The first step is to look for low-hanging fruit. Customers and packaging converters alike will benefit from the design changes, which will have a minimum impact on operational expenses and capital expenditures. These steps include removing needless packaging, increasing the use of recycled content in packaging materials, when possible (for example, in less sensitive applications such as non-food goods), and assisting in the successful communication of sustainability narratives (for instance, by showing consumers how to recycle packaging).
The second step is a little more difficult, but it’s still feasible. Package-design innovations which take into consideration the complete circular economy and the direct environmental effect of creating packaging materials, can generate more broad changes than those in step one. Packaging design that makes use of current material developments and uses more mono-materials might be part of this endeavour. It might also entail developing package designs in novel shapes and forms, as well as new substrates, to make recycling easier. It will be vital to guarantee that these design decisions do not have unintended negative implications, such as an increase in food waste, which might have a bigger environmental impact.
We think that taking an end-to-end view of the value chain and applying a science-based approach to sustainable claims. Some activities, such as adopting nonrecyclable lightweight packaging with a smaller carbon footprint, may result in inadvertent conflicts. As a result, it’s critical to give more transparency and provide a more rigorous and fact-based approach to packaging’s sustainability performance so that consumers, firms across the value chain, and regulators can make more educated packaging decisions.
For each proactive member in the packaging value chain, we propose the following three lessons:
Consumers and customers should be educated. Get your product’s sustainability story right by presenting a fact-based assessment of where your packaging product sits in comparison to the next-best options across the major sustainability elements—and be sure to emphasise the trade-offs.
Examine the trade-offs between sustainability goals in detail. Consider the whole value chain when calculating your carbon footprint, considering both direct and indirect carbon impacts as well as all the benefits and drawbacks of each material choice. Also keep in mind that innovative business models, such as reusable ideas, may help to reduce carbon emissions even more.
Expect external unpredictability. Recognize that how packaging sustainability is viewed is unclear and that the external environment may change (for example, new regulation focused on one dimension of sustainability could be introduced, potentially at the expense of others). To do so, you should analyse all aspects of sustainability, including the influence of other major packaging trends that are creating change and uncertainty, and develop a packaging product contingency plan.
Packaging regulations are becoming more stringent. Companies must have a thorough awareness of the various regulatory landscape in order to remain compliant.
With consumers and end-users becoming increasingly concerned about the environment and the impact of packaging being littered or ending up in landfill, sustainability in packaging is a megatrend impacting the packaging industry. As a result, new, stronger sustainability requirements are surfacing on a regular basis on a variety of fronts, such as the plastic packaging tax coming in to force on 1st April 2022, and also change to the EPR in 2023.
We’ve all seen a significant rise in sustainable-packaging requirements in recent years. Noncompliance to these new regulation will result in tax hikes or fines, so it’s vital for businesses across the packaging value chain to be aware of the fast pace of regulatory development.
These restrictions, are designed to impose additional standards with the primary goal of reducing the harmful impact of packaging on the environment and to drive a more circular economy. As a packaging manufacturer there are many ways in which this can be achieved:
The packaging requirement, such as, size, and weight
Its characteristics, such as recyclability and compostability
Packaging’s anticipated main function, such as protection of product
Packaging chain, from raw materials procurement through disposal, including collection and sorting strategies, as well as setting reuse or recycling goals
Countries have generally begun their sustainability journeys by addressing the beginning and end of the flow—that is, material restrictions and a focus on waste management via expanded producer responsibility (EPR). As well as established infrastructure to accommodate long-term improvements in design, recycling capabilities, and recycled-content usage.
It is important to us at Skymark that we lean on our SKYGREEN agenda to ensure we have the solutions across many aspects of the discussion. There is no; one fits all approach here.
Dan Richards – Sales & Marketing Director
In the last few years, rules on sustainable packaging have mostly focused on plastic packaging (versus other substrates). Plastics are the subject of 83 percent of the legislative measures linked to sustainable packaging across the world, with a total of 147 measures identified.
To get started, we’ve put up a list of three important issues that those using packaging should think about:
Do you have a team in place to stay on top of regulatory developments in your target markets and to understand what other stakeholders in the value chain are up to?
Do you have flexible internal systems in place to swiftly respond to current and future regulatory needs, and will you be able to adjust or adapt your business model to comply with the rules?
What packaging investments should you make at the product and technology levels to ensure product sustainability? Here, it will be critical to determine if new packaging items will be required to meet regulatory standards (and if these products need to be differentiated for specific countries or focus markets). It will also be critical to find potential for circular recycling partnerships, especially those involving renewable resources.
Mono PE/PE Laminate + 30%PCR (30% in Filmic Structure to avoid UK Packaging Tax):
With the upcoming UK Plastic Packaging Tax coming into force from 1st April, the packaging sector faces some interesting challenges; one of these sectors is Wet Wipes packaging.
The challenge with this market lies in ensuring compliance to regulatory requirements and as cosmetic regulations (EC) No 1223/2009 do not specify their product safety parameters, but instead rely on the Food Safety testing standards framework of (EC) No 10/2011 and (EC) No 1935/2004, cosmetic packaging items must meet food safety standards to be placed on the market unless they can be challenge tested for safe use.
What is our answer to this challenge?
Our highly skilled team set out to successfully develop a mono PE laminate structure containing 30% recycled content. The material structure, as well as its PCR granules, have been independently assessed for compliance with strict requirements and compared against the virgin resin’s only equivalent version.
The final PCR content laminated structure has been rigorously tested for Overall Migration Levels (OML) at our specialist Food Compliance Testing partners at Campden BRI to food safety standards*¹, whereas the PCR granule itself has been tested for compliance to EDANA by our partners as Galab Laboratories GmbH in Germany, which includes testing of granulates against Level of Quantification (LOQ) of Alkylphenol ethoxylates, Alkylphenols, Bisphenols, Heavy metals, Organotin compounds and Phthalates.
Testing of both the virgin and recycled content mono PE laminate structures did not contain any NIAS substances which would cause concern for food safety.
The net result of our testing and development work, which meets the high safety requirements outlined under EFSA & UK Food Safety testing required by cosmetic regulations, is a mono PE structure which utilises mechanically recycled content being ready deployment within the Wet Wipe Packaging market *².
The results of the above were that there was no migratory impact was seen between a substrate made from virgin only polymers vs the equivalent structure including 30% recycled content materials.
The final step for us was to ensure our recyclability claims lived up to the challenge too. Courtesy of the changes within the recent changes within the UK Competitions and Markets Authority (CMA), we decided to ensure that we could independently substantiate our claims for a recyclable mono PE laminate structure. We enlisted the help of our colleagues at Institut Cyclos HTP in Germany to test our mono PE laminate for recyclability and NIR detection within the waste streams and our product scored very high for recyclability, achieving 95% recyclability under LDPE plastic films; with no issues for LDPE NIR detection within the waste streams.
As a result of all of the above, we are pleased to announce that we can support our clients in their endeavour to not only meet the challenges of recycling Laminated packaging materials, but also offer a solution to the challenges imposed by the UK Plastic Packaging Tax.
*¹ Testing was completed using simulants, A, B and D2, covering food items from almost every spectrum. To further test the safety of the material, the D2 Simulant test was also conducted using the most aggressive test substance (95% v/v ethanol).
*² Final compliance testing will be required by the customer with regard to leach testing when the packaging is subjected to the customer’s wipes and solution(s), as these may affect the substrate. We do not foresee significant issues with this test, as we believe that routine customer compliance/ approval testing should be based on the same clearance procedures.
Skymark Packaging’s Compliance and Accreditation Manager, Shaine Gill-Ohrt, attended the recent BPF Parliamentary Reception at the House of Commons on 30th November 2021, which included several constituent MP’s from across the UK. Among those, was the Member of Parliament for Scunthorpe and surrounding villages, Holly Mumby-Croft MP, who took time out of her busy schedule to join Shaine at the event and learn more about the sector as a whole.
The aim of the event was to share the importance of this sizeable sector to the future of the UK as well as its diverse nature of products, which the Industry provides.
During the event, talks from Phillip Law, Director general of the British Plastics Federation, highlighted among other points, the flexibility which has been demonstrated by all of our Industry partners, particularly over the last 18 months.
Far from attempting to glorify the industry, a key aim was to highlight the efforts that often go unnoticed:
The industry as a whole has come together to enable a further 150,000t of recycling capacity to be generated, as well as generating £7.2 billion pounds of investments into chemical recycling systems across Europe by 2030.
The plastics industry is changing at a rapid pace of knots and deserves credit for its achievements. As a sector, the domestic plastic industry started 2020 by producing 1% of PPE (Face Masks, Visors, Surgical Aprons, etc) in the UK, which as the pandemic progressed resulted in 70% of PPE having been made in the UK by the end of 2020, practically creating an entire industry within the space of less than 1 year.
Our sector forms part of the largest Climate Change Agreement management plan of any single sector, having achieved in excess of 19% energy savings since its inception.
Within the Industry, over 350 sites, covering 65% of all materials processed in the UK now subscribe to Operation CleanSweep – an initiative aimed at preventing plastic pellet loss to the environment.
The lightweight, versatile nature of plastic make it a favourable material when considering Carbon Impacts on the Environment.
The question then of whether the plastics industry of today is still relevant in tomorrow’s world is easily summarised:
With over 180,000 jobs, a turnover of £27billion per annum, product uses in almost all areas of life, including key national infrastructure and security sectors, as well as a place in the top 10 exporting sectors in the UK, combined with its proven dynamism and sector leading initiatives, the Plastics Industry should certainly be considered as a key element of the UK’s Net Zero carbon ambitions.
The journey won’t be easy, but at Skymark, our dedicated team are relishing the opportunity to lead the way in making Plastic Packaging a more sustainable and circular product. This is why we have already taken steps to optimise our operations, reduce our consumption of energy and Virgin Raw materials (since 2018, we have recycled over 2,700mT of Packaging Waste on site) and reformulate some of our key products to make sure they are recyclable and, where the law permits, include Recycled content plastics in their formulation.
Dan Richards – Sales & Marketing Director
We recently collaborated with the team at Benchmark Consulting on a game changing Carbon Calculator, whose methodology is wholly aligned with IPCC, the UK Gov Industrial De-carbonisation strategy and European initiatives requiring granularity, accuracy from a trustworthy source. The software enables independent and impartial assessments of Carbon Impacts at the SKU level, whilst factoring in variations in production efficiencies, etc. This further supports our ambitions as becoming a leader in changing the Packaging landscape to becoming more transparent and honest with our stakeholders.
Recognising that climate change poses a threat to the economy, nature and society-at-large, our company commits to take action immediately in order to:
Halve our greenhouse gas emissions before 2030
Achieve net zero emissions before 2050
Disclose our progress on a yearly basis
In doing so, we are proud to be recognised by the United Nations Race to Zero campaign, and join governments, businesses, cities, regions, and universities around the world that share the same mission.
What does net zero emissions mean and why do we have to reach this state by 2050?
In 2015, the landmark Paris Agreement was signed by 196 countries with the overarching objective of “holding the increase in the global average temperature to well below 2°C above pre-industrial levels and pursuing efforts to limit the temperature increase to 1.5°C above pre-industrial levels, recognising that this would significantly reduce the risks and impacts of climate change.”
In 2018, the Intergovernmental Panel on Climate Change – the leading scientific body for climate change – issued a major report called the IPCC Special Report on Global Warming of 1.5°C, in which over 6000 climate scientists stated that to avoid the worst effects of climate change, we must limit global warming to 1.5°C.
Current estimates suggest that we have already reached global warming of approximately 1°C and if we continue on the current trajectory, we will reach global warming of 1.5°C between 2030 and 2052. As long as we keep emissions above zero, the planet will continue to heat and that is why it is also important to reach a state where the greenhouse gases going into the atmosphere are balanced by permanent removal out of the atmosphere (net zero) as quickly as possible and by no later than 2050.
This objective can only be met if everyone contributes to a global collaborative effort – and that means every business of every size, sector and geography, including SMEs, must do its part.
We have already been working hard on our commitment to reduce our emission and below is what we have been doing over the past several years:
we have also been at the forefront of making our products as easy to recycle as possible. Together with our long-term partners in the UK and our friends at Institute cyclos-HTP GmbH in Germany, we have re-designed some of the traditional headline grabbing problem plastics. Our solution was to create our SKYMONO Product range which allows the consumer to use existing recycling streams, as well as store front collection points to dispose of the waste materials in a simple and responsible way.
Our SKYMONO products have successfully been deployed in the wider market for applications ranging from Consumer Wipes to a variety of Food packaging applications.
Our friends at Institute cyclos-HTP GmbH rigorously tested our product for recyclability.
The result: 91%-95% recyclability within LDPE Waste Streams (in line with DIN EN 13430), with 100% NIR detection.
The Plastic Packaging Tax (PPT) comes into effect on 1 April 2022, impacting plastic packaging manufacturers, importers and purchasers.
PPT is a new tax on plastic packaging manufactured in, or imported into the UK, that does not contain at least 30% recycled plastic. Manufacturers / importers of plastic packaging (including importers of packaging surrounding other goods) will need to take action as soon as possible in preparation for the new tax, which will be levied at a rate of £200 per metric tonne of plastic packaging.
What can be classified as recycled plastic?
The Draft Plastic Packaging Tax document by the HMRC, Paragraph 8 “Meaning of “Plastic” and “Recycled Plastic”, page 6 elaborates the definitions of plastics, recycled and recovered plastics. By this definition, Recycled Plastic is permitted to consist of “plastic that has been reprocessed from recovered material by means of a chemical or manufacturing process so that it can be used either for its original purpose or for other purposes.”. Within the section, the definition of Recovered Material is further elaborated under section 4, stating that “Recovered Material is pre-consumer material or post-consumer material that:
a) has been collected and recovered as a material input, in lieu of new primary materials, for recycling or a manufacturing process, and
b) would otherwise have been disposed of as waste or used for energy recovery.
It is therefore our understanding, that “Recycled plastics do not simply restrict themselves to PCR material but in fact includes Pre-Consumer waste/Post Industrial waste, as well (see definition under section 5 of page 6 of the guidance as well as ISO 14021 definitions on Waste – Waste recycled away from a process using recognised/ accredited process will likely be eligible, albeit legislation does not currently require separate accredited repressor accreditation).
What is the Difference between EPR and Plastic Tax?
In a nutshell, Plastic Tax is a tax levied on industry for materials which do not contain a minimum level of recycled content (currently 30% in the UK – other regions may vary). EPR is a cost levied by the UK Government on the likes of Brand owners, retailers, on line market places and importers being held accountable for the net cost of collection and sorting for recycling, education and clear up of Packaging items they place on the UK marketplace. These costs are presently assumed by local councils
What is the Tax and its impact in UK and EU and what is EPR?
There are significant differences in the Taxation systems between the UK and the EU. We have attempted to simplify the differences in a tabulated form below:
Impact
UK
EU
Taxation cost per tonne
£ 200 from April 2022*¹
€ 800 from January 2021
Applicability of Tax
Materials not containing at least 30% Recycled content materials. Recycled material coming from chemical recycling is admissible for the calculation of the minimum recycled content
The levy will be composed of a share of revenues from national contributions calculated on the weight of non-recycled plastic packaging waste *₂; *₃. This share is paid by member states, as opposed to industry, however, may translate to industry taxation further down the line. Due to the definitions of Recycling needing to be collected and recycled at Scale, this tax will likely apply to all materials which are not able to be mechanically recycled and/ or in line with CEFLEX design guidance. Chemical Recycling and EfW will therefore likely not be eligible to be defined as Recycled.
Taxation Point
Current legislation on taxation point states tax will be levied at the last substantial modification before packaging and filling. Current definition on this is: A component is finished if it has undergone it last substantial modification or in cases where the last substantial modification happens when the component is packed or filled; its last substantial modification will be that before being packed or filled. Tax on Exported goods will be reimbursed, but the mechanism is not yet clear. This is just one exemption others include primary packaging used for medicines, transport packaging for imported goods, cellulose.
The levy will be paid annually by each Member State. However, it will be up to each member state to decide their own mechanism to raise the necessary contribution to the EU budget. It is not a direct taxation on the plastic industry. Each Member State can decide where to find the resources to honour this obligation.
Measures of evidence
2 systems: For Tax accounting, invoices may need to list the Tax Levy as a separate line which will need to be reported in accounts. For Evidence of recycled content materials (and therefore Tax exemption) mass balance evidence will likely be used. This should include: total amount in weight and a breakdown by weight of the materials used to manufacture plastic packaging, excluding packaging which is used to transport imported goods. weight of exempted plastic packaging and the reason for the exemption. amount in weight of plastic packaging exported, and therefore the allowed relief from the tax.
To be determined, however Mass Balance and self-declaration by governments most likely. Imports will also be applicable within the accounting by member states.
Use of revenue stream
Likely used as a revenue stream to offset other governmental budget expenses. Cost impact currently queried by BPF
Contribution to overall EU budget funding – not destined for Recycling infrastructure *⁴
*¹ Skymark Packaging have been informed by HMRC via the BPF that the taxation levy of £200 is applicable before adding VAT charges, therefore levying a Tax onto a Tax. *² Separate Taxation systems for plastics are also currently running alongside the EU taxation system in Italy and Spain. These are in addition to the EU taxation rules and apply to all plastics not meeting minimum technical requirements, as opposed to the EU taxation. The current position across the EU:
Greece implements a plastics tax of €66/tonne
Italy implements €450/tonne of plastic contained in the product with the exclusion of the amount of recycled plastic used (exemptions include Medical packaging and Compostable plastics
Spain (from July 2021) €450/tonne of non-reusable plastics containers, and all non-reusable plastic products serving to contain liquid or solid products, or to wrap goods or food products (including composite containers with plastic (medical and export packaging is exempt).
*³ The EU will base its calculations on the new methodology to calculate waste reported towards the attainment of recycling targets for the current financial year. Under this methodology, the amount of recycled packaging equals the amount which enters the recycling facility (input to recycling) as a general rule. The plastic levy will be calculated by deducting the weight of recycled (plastic) packaging from the weight of all (plastic) packaging placed on the market /waste generated, which needs to be reported by Member States.
On the other hand, EPR is a charge levied on business to foot the net costs traditionally absorbed by Government in regard to Material collection, sorting, segregation for recycling, system administration and consumer education on littering and clean-up costs. It has been estimated that the bill facing business could exceed £2.7 billion pounds at the point of implementation, however some argue that the cost may well be higher than expected due to uncertainty in volumes, reporting, etc. of this amount 1.5bn is associated with business waste and it is possible government may not require these costs to be transferred to brands, retailers and importers.
EPR will include a modulated fee (values yet to be decided) and it is unclear how detailed the categorisation will be in the final proposal. That being said, in the initial draft documentation, plastic packaging has had significantly higher levels of modulation than any other packaging material – attributed by the policy setters to the complexity of ranges of Polymer application, combinations and uses.
Valpak launched its own research on the consultation to establish what the likely impact of the EPR modulation may be and arrived at the following key findings:
The average historic EPR costs covering a period of 11 years and all material categories (Plastic, paper wood, glass, metal(s)) has yielded an average cost of compliance of around £24.14 per tonne which was cumulated through the supply chain as a whole.
Valpak went on to extrapolate that based on the government’s cost prediction and available volume data & expectations, the costs of EPR for Household and Household like waste could reach an average of around £310 per tonne – an almost 15 fold increase in cost of compliance. It is important to note that this figure is an average across ALL waste categories, therefore would be subject to being skewed by relatively cheaper EPR materials (Wood and Paper) compared to higher modulated materials (plastics and metals).
As mentioned, in the absence of defined modulation categories and predicted costs by the government (expected last 2021/ early 2022) it is difficult to work out what exactly the impact will be.
However, Skymark are of the opinion that the cost of EPR could well exceed that of the plastic tax. On that basis, Skymark are advising their clients that it may be in the longer-term interest to pay the Plastic Tax at the earlier stages, with a view of creating a more sustainable technical development which allows both the Tax and EPR to be adequately addressed. Not sure I understand this.
What are the impacts of these costs to me?
Well, as always, there are two sides to the coin:
Plastic Tax is the relative short-term impact on the manufacturer which drives a use of recycled content materials in packaging applications, so far as they are legally permitted to do so.
EPR is a longer-term impact which forces Brand Owners and Retailers to rethink their packaging formats in order to ensure they utilise the most recyclable version of a format possible. The reason for the distinction on these two costs to business (ultimately both are costs to consumers), is that solving one doesn’t necessarily negate the other. Let’s examine a few scenarios:
Please note, the following examples fictitious and values used within are used to illustrate only. Actual charges of EPR may vary.
Company A is a Packaging manufacturer for Spices and has decided it needs to take action to avoid Tax by building a multi-material structure with functional barrier which allows the use us PCR material in the structure without impacting on regulatory compliance. Company A now has a material capable of avoiding taxation charges but has an adverse impact on the recyclability of its material due to the added material complexity.
This means that by avoiding the Tax, they have increased the modulation fee of their material for EPR. Company A may have saved £200/t on Plastic taxes but may now face a higher EPR modulation charge of £400/t
Company B is a manufacturer of food packaging, whose mono material solution has been designed with recyclability in mind. The context of Legislation does not permit the use of Recycled content material within their packaging application in its current format. However, the Mono-material structure used by Company B has a high grade of purity and therefore attracts lower EPR modulation charge. Although Company B pays £200/t +VAT @20% for not meeting the requirements of the plastic tax, their modulation charge carries a cost of £150/t.
As a result of the above, Company B is paying £10/t less on the cost of its materials compared to Company B, however may be able to claim the VAT back later (Skymark Packaging are not financial advisers, so please seek independent financial advice on taxation matters).
What about Mass Balance Raw materials?
There are several products emerging which allow recycled material, either from Chemical recycling or Waste Stocks (Oil, Food, Pulp, etc) to be used in a food safe application. Products from the likes of Borealis, Lyondell Basell and Braskem to name a few are sparking a lot of discussion (particularly in regard to “what constitutes the boundary of recycled materials?”).
There are a few key points to note on these products:
Chemical Recycling is considered in the UK to be permissible to be considered toward your min 30% recycled content threshold for taxation purposes, however, recycled materials from Gen 2 Feedstocks, such as Oils, Food source and other bio matter is not.
Both raw material streams work on a mass balance approach, which means the material you purchase may not necessarily be recycled content, however, comes from a plant in which recycled content is handled and as such can be issued as certified to the requirements.
In order to make any claims on these types of materials, the entire value chain must subscribe to Mass Balance systems, such as ISCC+ or BonSucro, each of them carrying some reasonably substantial costs with them, particularly for multi-site operations.
The manufacturer premium levied on these types of products is dependent on the level of PCR % you would like to be certified, e.g., a 30% recycled content material mass balance certification may carry a £1,200/t premium over and above the cost of the virgin grade equivalent.
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We provide you with a list of stored cookies on your computer in our domain so you can check what we stored. Due to security reasons we are not able to show or modify cookies from other domains. You can check these in your browser security settings.
Other external services
We also use different external services like Google Webfonts, Google Maps, and external Video providers. Since these providers may collect personal data like your IP address we allow you to block them here. Please be aware that this might heavily reduce the functionality and appearance of our site. Changes will take effect once you reload the page.
Google Webfont Settings:
Google Map Settings:
Google reCaptcha Settings:
Vimeo and Youtube video embeds:
Privacy Policy
You can read about our cookies and privacy settings in detail on our Privacy Policy Page.
