Climate change: environmental taxes & finance

The new Plastic Packaging tax is due to be introduced on 1 April 2022 and will affect UK producers & importers of plastic packaging and their business customers. The UK Emissions Trading Scheme (UK ETS) went live on 1 January 2021, replacing the UK’s participation in the EU ETS.

The Plastic Packaging tax will have the following key features:

  • The tax rate will be £200 per tonne for packaging with less than 30% recycled plastic
  • The scope of the tax will be determined by the type of taxable product and recycled content
  • There will be exemptions for producers and importers of small quantities of plastic packaging
  • Those who manufacture or import plastic packing components or import packaged goods into the UK will be liable to pay the tax and need to register with HM Revenue & Customs.

The meaning of the terms “plastic packing components” is construed very widely and many actual plastic products themselves might also fall within the scope of the tax. Therefore, it is important that any business dealing in such products takes advice as soon as possible.

UK ETS Auctions

UK ETS auctions began on 19 May 2021 and are hosted by ICE Futures Europe (ICE). Auctions are held every two weeks as set out in the auction calendar published by ICE. The 2022 auction calendar was published on 03/11/2021 and around 80 million allowances will be auctioned across 2022 subject to minor revisions.