New 'plastic tax' planned to drive use of unrecyclable material out of existence

Exclusive: Government plans to use existing system to supercharge costs of using non-recyclable plastics

Firms who package goods in unrecyclable plastic will be hit with massive costs under plans to drive its use “out of existence”, The Independent can reveal.

Whitehall insiders believe the proposal – effectively a tax on non-reusable plastic – will have a greater impact on the government’s drive to abolish all plastic waste by 2042 than any other measure.

A source close to the proposal told The Independent it would make the cost of using unrecyclable plastics “so exorbitantly high” that companies would simply conclude they are no longer worth it.

At the same time the measure will create a lucrative funding stream to pump into new UK recycling capacity for plastics that can be reused.

It follows a string of announcements from environment secretary Michael Gove as he stakes out green issues as Conservative political territory, with campaigners encouraged to push for progress in other areas too.

The Independent is campaigning for a 25p “latte levy” on disposable coffee cups, for example, which are almost impossible to recycle effectively.

But officials believe the real route to radical change on plastics is the new-look scheme now being devised at Mr Gove’s department.

Since 2005, firms creating packaging waste are obliged to buy a “packaging recovery note”, or PRN, to offset the cost of dealing with it, with the charge acting as a small incentive to use greener packaging and money raised helping to fund recycling.

But government insiders now want to supercharge the system, with manufactures who use unrecyclable plastic forced to purchase PRNs that cost extreme amounts.

A government source said: “The fact that there are a lot of poor-quality plastics out there is an issue – these are single-use items, not good enough quality to recycle.

“So the question is, how do you change that to move towards people using better-quality plastics, that you can reuse?

“A key way would be to make the cost of non-recyclable plastic – via PRNs – so exorbitantly high that it effectively drives it out of existence – it would mean that with the cost of it, it would not be worth using.”

An example of products that could be subject to the higher PRN cost are food goods such as bacon or cold meats, or anything that comes in very thin plastic packaging.

The change is being driven by the burgeoning use of unrecyclable plastic since China banned imports of plastic waste, leading to a desperate need for new UK recycling capacity.

Beijing had imported some 7.3 million tonnes of plastic waste a year from developed countries including the UK. Its closure as a destination has seen waste piling up at British plants.

The Independent’s source explained: “If you increase the cost of PRN, then you also have more money for recycling capacity, and you can use that as a way of growing the recycling industry of the UK.

“That is essentially the big area of change in terms of plastic – it is these things that will have some of the greatest impact on improving the issues around plastics.

“They are not easily explainable, or sexy in a news sense like the deposit return scheme on plastic drinks containers, but they will have a big impact.”

Ministers want the plan to be ready by the end of the year when the government is due to publish its new waste and resources strategy.

Other government announcements include banning plastic microbeads, a 5p plastic bag charge, which led to nine billion fewer bags distributed, the deposit return scheme for single-use drinks containers and a ban on plastic straws and drink stirrers.

Mr Gove has previously said that the success of the charge on plastic bags has showed people are willing to take a financial hit as long as the policy behind it works for the environment.

At the time the government had just published its 25-year plan on environmental policy, which included consulting on whether further taxes and charges could be used to curb the use of plastics.

But the new drive to use PRNs to wipe out the use of non-recyclable plastics is bound to face pushback from some industrial sectors, while there are also political dangers given the cost of the new system could potentially be passed on to consumers.

The Independent’s source said: “If you speak to companies, people are moving in this direction anyway. The general trend of big business is towards better packaging, recyclable packing.

“People know their consumers are concerned about it. So, there might be some issues with some businesses, but broadly speaking those in the packaging business are feeling they have to be more green and environmentally friendly.”

Meanwhile, those backing the plan within the Conservative Party believe political risks can be mitigated as long as the purpose of the new system is properly understood by the public and business world.

In 2012 then-chancellor George Osborne was lambasted after a plan to simplify the VAT on hot takeaway food led to the furore over the “pasty tax”, and the unravelling of his budget.

But the source said: “You can get into difficulty when there is a lack of clarity about why the government is really doing something, but no one will know many people who don’t think that there is a problem with plastics.

“It’s a major thing at the moment, people understand why we are doing it.”