On 6 October 2026, the UK government published a consultation on draft legislation to amend the Plastic Packaging Tax (PPT) framework, specifically addressing chemical recycling and the adoption of a mass balance approach. Introduced in April 2022, the PPT charges £217.85 per tonne (2026-27 rate) on plastic packaging components containing less than 30% recycled plastic. The consultation seeks views on how chemically recycled content — where plastic waste is broken down to molecular level and reformed — should be counted towards the 30% threshold. A mass balance approach would allocate recycled content across output streams based on auditable accounting, enabling certification of recycled content in final packaging. The consultation runs until 31 December 2026, with legislation expected in Finance Bill 2027.
Key Takeaways
- Chemical Recycling Recognition: The proposals would allow chemically recycled plastic to count as ‘recycled content’ under PPT, provided it meets defined standards and traceability requirements. This could significantly expand the supply of qualifying recycled material, particularly for food-grade packaging where mechanical recycling is limited.
- Mass Balance Methodology: The draft legislation adopts a ‘fuel-exempt’ mass balance model, meaning only the proportion of output attributable to recycled feedstock (not energy recovery) qualifies. Businesses must maintain rigorous chain-of-custody documentation and third-party certification to claim the exemption.
- Compliance and Reporting Impacts: Packaging manufacturers and importers will need to update due diligence systems, supplier contracts, and PPT returns to capture chemical recycling claims. HMRC will issue detailed guidance on evidential requirements, with penalties for inaccurate claims mirroring existing PPT enforcement.
Disclaimer: This article is compiled and summarized by the AI based on publicly available information and is for general information purposes only. It does not constitute any form of formal tax advice, legal opinion, or basis for performance. Please consult a qualified professional tax advisor or legal counsel for tax advice.
Source: Read Official Announcement