The consultation, published yesterday (6 October 2026), seeks views on draft regulations and a supporting reference document setting out how the approach will operate.
It closes at 11.59pm on 21 December 2026.
The government has already confirmed that businesses will be able to use mass balance allocation to account for chemically recycled plastic for PPT purposes from 1 April 2027.
The draft regulations set out the conditions businesses will have to meet if they want to use the approach.
This includes requirements covering the attribution methodology, certification, auditing, monitoring and record keeping. Businesses will have to use a certification scheme meeting the requirements set out in the legislation.
HMRC said further operational details will be specified through notices published at a later date, which are generally expected to reflect relevant industry and ISO standards.
The consultation is aimed at businesses intending to use mass balance to account for chemically recycled plastic, businesses in the supply chain which may need to obtain certification, and certification bodies and scheme operators.
Dual-use factors
Alongside the draft regulations, HMRC has published a reference document covering ‘Dual-Use Factors for Refinery and Petrochemical Output Products’.
The document sets out how output products from refinery and petrochemical processes should be classified, how a dual-use factor (DUF) should be calculated for each output product, and when default values should be used.
The government said the default values will be confirmed before the final legislation and reference document are published.
The consultation is seeking views specifically on the drafting and technical application of both documents, with the aim of ensuring they deliver the policy as intended.
Mass balance
Under a mass balance approach, recycled feedstock can be allocated to outputs from a production process even where recycled and virgin material have been physically mixed and the recycled material cannot subsequently be identified in the final product.
This is particularly relevant to chemical recycling processes which produce a feedstock that can be used alongside virgin fossil-fuel feedstock in petrochemical processes.
The approach allows the recycled input to be attributed to a corresponding proportion of output, provided the required chain-of-custody and certification requirements are met.
Plastic Packaging Tax
PPT was introduced in April 2022 as an incentive for businesses to use recycled plastic in packaging.
The tax currently applies to plastic packaging manufactured in or imported into the UK which contains less than 30% recycled plastic. Packaging containing at least 30% recycled content is exempt.
From 1 April 2026, the tax rate increased to £228.82 per tonne, up from £223.69 in 2025-26.
The mass balance changes will mean chemically recycled material can be attributed to packaging when calculating whether it meets the 30% threshold.
The government has also legislated to remove pre-consumer plastic waste from the definition of recycled plastic for PPT from 1 April 2027.
HMRC’s latest figures show that PPT generated £250 million in revenue during 2025-26, down 4% from £261 million in 2024-25.
HMRC described this as part of a “gradual decline” in PPT revenue since the tax was introduced. It said 37% of plastic packaging manufactured in or imported into the UK was declared taxable in 2025-26, while 51% of the remaining tonnage met the 30% recycled content threshold.
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