Mixed reaction to EU €800/tonne plastics charge

IOM3 Content Cafe
,
6 Aug 2020

The EU's €800/tonne plastic packaging waste charge, passed by the EU Council at the end of July and which takes effect from January 2021, shocked the market because of both its size and narrow timeframe to implementation. Reaction has so far been mixed, with immediate questions on how it will be calculated, passed through the supply chain, and whether it will lead to greater regulatory divergence on plastics.

The new charge of €800/tonne for all non-recycled packaging waste will be paid by EU nations from 1 January 2021.  National contributions will be calculated by the European Commission using existing reporting obligations under the Packaging Waste Directive (Directive 94/62/ECC) and its implementing Decision (Decision (EU) 2019/665.

Under that directive member states provide data on plastic packaging and recycling. The data are published on the Eurostat website.

The charge will be used to fund the coronavirus recovery package and charged at nation state level.

The methods used to meet the cost of the charge will be up to individual countries, and the EU Council has not proposed any regulatory stipulations around this. Individual countries are free adopt different approaches and could seek to recoup the cost of meeting the charge from differing parts of the supply chain, leading to potential regulatory divergence.

Uncertainty abounds

How nation states will incorporate this into national legislation remains the key uncertainty for plastic and recycling markets. Some players have welcomed the move because it could encourage higher recycling rates in the future, and for devolving how this is implemented across the supply chain to individual national governments. Others are unsure how international supply chains and recycling will work.

They further argue that it does little to alleviate infrastructure shortages and legislative barriers which limit the ability of the market to increase recycled material suitable for food-grade packaging and hazardous material packaging, and that the charge could encourage a shift to non-plastic packaging types such as glass, paper and cardboard.

Infrastructure lacking

There have been concerns that the bill does nothing to address waste collection infrastructure shortages, and that the short timescale to implementation does not allow nation states enough time to enact the legislation in a considered manner. Several sources feel that the lack of suitable waste collection infrastructure will mean that the cost of any potential plastic taxes currently proposed or introduced on the back of this legislation would simply be passed on to the consumer until methods are introduced to provide enough volume of material to tackle shortages.

However, if the cost of the charge is passed through to the supply chain, for many packaging applications the limited volume per item of material will mean the addition of only 1-2 cents per item, which might easily be transferable to consumer.

To achieve European Food Safety Authority (EFSA) approval, 95% of the material used in reprocessing must have been sourced from food-contact applications, and there must be full and provable traceability throughout the chain.

For recycled material such as r-PP where multiple forms of waste are collected in kerbside schemes, proving provenance of material to reach the 95% content threshold is prohibitive. The only post-consumer-derived source of food grade r-HDPE pellets is the UK where milk bottles provide an easily separated stream of waste.

Structural shortages of material, along with technical limitations such as opacity of material and loss of tensile strength, have led companies to explore other avenues for reaching sustainability commitments such as chemical recycling or bio-based materials.