Business leaders have warned Labour that their “illogical” tax on environmentally harmful products will have a negative impact on the environment.
Known as the “grocery tax”, the new legislation will see retailers and manufacturers charged per tonne of packaging materials they use in a bid to encourage businesses to use less.
The measure is one of several designed to help the UK reach its Net-Zero pledge and reduce waste but senior industry figures have warned that it could have the opposite effect.
Under the scheme, retailers and manufacturers will be charged more for using plastic wrapping compared to other materials, but as the charges are based on weight, many believe that it will still be cheaper to use plastic as opposed to heavier, more recyclable products like glass.
Jason Galley, director and chief executive at the Metal Packaging Manufacturers Association, told the Telegraph: “It was advertised as supposed to reduce waste, increase recycling and reduce packaging – but actually it is driving in 180 degrees in the other direction.
“If you charge less for something that recycles less then you have higher fees for disposing of those materials as it will have to go to landfills or to be incinerated. You push costs up, you drive towards something that is feeding inflation, it is just insane. It is lose-lose.”
Dave Dalton is the chief executive of British Glass and believes that the policy is “illogical”.
He told the Telegraph: “Glass fees will be around 49 times higher than other, less recyclable materials, leaving brands with no choice but to move away from using 100 per cent recyclable glass products.
“Unfortunately, we are now in a position where consumers are indirectly being taxed to use less sustainable materials.”
Mr Dalton urged ministers to amend the fee calculation from weight to volume and to recognise that the policy could see an exodus of businesses using products such as glass or metal.
The policy, known as Extended Producer Responsibility (EPR), was originally devised by Michael Gove during his time as environment secretary and earlier this month secondary legislation was passed that will see the levy come into legal force on 1 January 2025.
But experts have warned that the policy has been pushed through too quickly and has not been given enough consideration.
Dr Nicholas Kirk, director of the British Glass Manufacturers’ Confederation says that plastic packaging can be up to 20 times lighter than glass meaning that businesses will effectively be incentivised to use it instead of materials that are easier to recycle.
He said: “My concern is that the policy will incentivise brands and retailers to switch away from a fully recyclable packaging material like glass to a less recyclable one like plastic,” he said. “Should the policy be driving that kind of behaviour?”
The government believes that between 85-100% of the increased costs will be passed onto consumers, increasing annual bills per household by around £56.
A Defra spokesman said: “We are committed to cracking down on waste as we move towards a circular economy.
“EPR for packaging is a vital first step for our packaging reforms. These reforms will create 21,000 jobs and stimulate more than £10 billion investment in the recycling sector over the next decade. It means packaging producers, rather than the taxpayer, are covering the cost of managing waste.
“We continue to work closely with businesses, including in the glass industry, on this programme. We have published further illustrative base fees, based on the latest data for 2024, providing them with more clarity to prepare.”
