HMRC opens consultation on chemical recycling

HMRC published an open consultation on Plastic Packaging Tax (PPT), aiming to determine the impacts of chemical recycling for plastics and the potential use of a mass balance approach to account for chemically recycled content for PPT
HMRC opens consultation on chemical recycling

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Yesterday (18/07/23) HM Revenue and Customs launched an open consultation entitled 'Plastic Packaging Tax - chemical recycling and adoption of a mass balance approach'. 

The consultation will run for 12 weeks, closing on 10 October 2023 and asks 38 questions.

It "seeks views on whether a mass balance approach should be accepted as a way of allocating recycled plastic content to packaging, and, if so, the controls and standards that should be adopted to ensure the integrity of the tax."

The PPT was introduced in April 2022, since which time stakeholders across the plastics value chain have informed government that it is not always possible for businesses to use chemically recycled plastic in packaging and not pay the tax. This is due to difficulty distinguishing between plastic from virgin and recycled sources when chemical recycling takes place. 

HMRC are looking to determine whether businesses should be allowed to use a mass balance approach so chemically recycled plastic can count towards the 30% recycled content target required to avoid paying PPT. Government defines a mass balance approach as: 

A chain of custody model that is used by industries to track materials through a complex value chain. It enables recycled or sustainable inputs which are mixed with virgin material during the process to be allocated to particular outputs.

The objectives of the consultation are to explore: 

  • how a mass balance approach could be used for the purposes of PPT
  • the way in which certification schemes could be used 
  • the controls and standards which should be applied to maintain the integrity of the tax if this approach were adopted

Visit the brand new Plastics Reprocessing Infrastructure conference, taking place in London this October, to hear more from Lucia Suggitt, Policy Team Leader at HMRC, on the topic of mass balance. 

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