The UK Government has published its final decision on the reform of the Plastic Packaging Tax. According to the policy paper released on 26 November, the Mass Balance Approach will be permitted for calculating recycled content derived from chemical recycling effective from 1 April 2027.

This measure will enable producers to account for recycled material in products where secondary feedstock is mixed with virgin polymer at a molecular level, provided that the necessary certification is obtained.

Simultaneously, the regulator is tightening the criteria for waste classification. From 1 April 2027, pre-consumer waste will be excluded from the definition of recycled plastic for PPT purposes. Consequently, production scrap, regrind, and industrial offcuts returned to the processing cycle will be liable for taxation on the same basis as virgin materials. The tax exemption will be strictly limited to post-consumer waste.

As part of the budget planning, the Treasury has confirmed the indexation of the PPT rate in line with the Consumer Prices Index. From 1 April 2025, the tax rate will rise to £223.69/t — up from the current £217.85/t.

The Environmental Services Association has criticised the current tax rate, describing it as insufficient to stimulate demand for secondary polymers. Industry experts argue that the low cost of virgin feedstock, combined with a moderate tax burden, continues to squeeze the margins of recyclers. The sector had lobbied for an increase in the rate to £500/t and a revision of the recycled content threshold to 50%; however, these proposals failed to be adopted by the Exchequer.