Plastics tax set at £200 a tonne in Budget 2020

Chancellor Rishi Sunak used today’s (11 March) Budget to announce that the tax on plastic packaging containing less than 30% recycled content will come into force in April 2022, and will be set at £200 a tonne.

In the first Budget to be delivered by Boris Johnson’s majority government, Mr Sunak said the move would help tackle the “scourge” of plastics pollution and boost the use of recycle plastics by 40%.

Chancellor Rishi Sunak unveiled a range of measures relating to waste and recycling

Elsewhere, the Treasury announced £700,000 to develop IT capability to administer the future Extended Producer Responsibility scheme for packaging.

And, Mr Sunak unveiled plans to remove the tax relief on ‘polluting’ red diesel – meaning that costs will rise for many using heavy machinery in the waste and recycling sector.

Delivering his statement in the House of Commons, Mr Sunak announced a range of short-term fiscal measures to tackle coronavirus, before turning his attention to broader issues ‘to ensure prosperity in the long term”, including on the green economy.


On the subject of the plastics tax, Mr Sunak said the new tax, first announced in Budget 2018, would tackle the “scourge” of plastic in the natural environment and incentivise the use of recycled plastics.

This follows a consultation in Spring 2019 and previous suggestions that a £150/tonne level might be appropriate (see letsrecycle.com story).

Mr Sunak said: “From April 2022, we will charge manufacturers and importers £200 per tonne on packaging made of less than 30% recycled plastic.”

“That will increase the use of recycled plastic in packaging by 40% – equal to carbon savings of nearly 200,000 tonnes.”


Providing more detail on the scheme, the Treasury explained that the £200 a tonne rate would apply to “the production and importation of plastic packaging” and would be subject to review.

It Budget document explained: “The government will keep the level of the rate and threshold under review to ensure that the tax remains effective in increasing the use of recycled plastic.

“The government will also extend the scope of the tax to the importation of filled plastic packaging and apply a minimum threshold of 10 tonnes of plastic packaging to ensure the smallest businesses are not disproportionately impacted.”

The Budget also announced the launch today of a further ten-week consultation on the detailed design and implementation of the tax, which includes consideration of an exemption for certain types of medical packaging and can be found here.


The Budget also includes “an additional £700,000 to establish the Extended Producer Responsibility scheme, designed to encourage producers to make their packaging more recyclable and reduce the amount of unnecessary packaging in their products.”

Plans to introduce extended producer responsibility measures for packaging were consulted on last year and are due to be subject to another consultation this Autumn.

Budget 2020 is the first to be delivered by Boris Johnson’s majority government

The Treasury also committed to take action to fight waste crime through funding a digital waste tracking system to provide better data on waste transport and £2 million “to improve evidence on where fly-tipping happens and the best ways to deter it.”

Elsewhere, the budget includes plans to freeze the aggregates levy in 2020-21 and said it would be publishing a summary of responses and government next steps to last year’s comprehensive review of the levy.

Red diesel

On the subject of red diesel, which many operators use to power machinery and is seen as, the Treasury announced plans to increase tax on this by removing tax relief on its use in most industries.

Mr Sunak explained that this would not come into force until April 2022, to give businesses time to adjust to the change.

The Budget document explains: “The government will also remove the entitlement to use red diesel from April 2022, except in agriculture, fish farming, rail and for non-commercial heating (including domestic heating).

“By removing this tax relief on pollution, the government will encourage businesses and industry to improve the energy efficiency of their vehicles and machinery or look for greener alternatives. The development of these alternatives will be supported by the government more than doubling its investment in the Energy Innovation Programme. “

Mr Sunak said the government would consult on whether the entitlement to use red diesel and rebated biofuels was justified for any other users.

Summarising, Mr Sunak said:“We promised to provide green growth and protect our environment… this Budget gets it done.

“There can be no lasting prosperity for our people if we do not protect our planet.”

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