The Treasury said it is considering tax measures to increase recycling at the expense of energy-from-waste (EfW), in an announcement criticised by the Environmental Services Association (ESA) as “misguided”.
Following a consultation on using tax measures to reduce single-use plastics, the Treasury said there had been “overwhelming support” from the public for a range of measures including to “encourage recycling as opposed to incineration”.
This could mean some sort of tax on incineration, which would likely result in businesses and councils paying greater gate fees as costs are passed down.
Exchequer secretary Robert Jenrick said: “Tackling the scandal of plastic pollution is one of our top priorities and we know the public is right behind us.
“I’ve been overwhelmed by the public support, and the responses we’ve received will be invaluable as we develop our plans for using the tax system to combat this.”
“It is simply wrong to compare recycling as an alternative to EfW, and any suggestion that a tax on incineration will improve recycling is misguided.”
ESA executive director Jacob Hayler said the industry did not want plastic being burnt in EfW plants, but that EfW was a “much-needed alternative to landfill for waste which cannot be recycled”.
He added: “It is simply wrong to compare recycling as an alternative to EfW, and any suggestion that a tax on incineration will improve recycling is misguided.
“As an industry we do not want plastic going to our EfW plants and we invest heavily in recycling as much as practically possible, recovering energy from what is left behind.
“The Treasury should recognise the valuable role of EfW in putting waste that we cannot recycle to further use, and use tax effectively to target those who manufacture non-recyclable plastic.”
Julian Walker, chief operating officer of Cory Riverside Energy, said: “We fully support the Government’s ambition to remove as much plastic from the UK’s waste stream as possible.
“However, the introduction of a dedicated incineration tax is only like to result in more plastic waste being sent to landfill, an outcome which should be avoided at all costs.”
Walker said taxation should be used to tax virgin plastics rather than for its disposal.
He added: “We hope that the Treasury will continue the constructive dialogue it has had with the EfW industry so far, and find the right solution which reduces the impact of plastic on our environment.”
In July, the National Infrastructure Commission said that the need for up to 20 EfW facilities could be avoided if recycling rates increased and food waste collections became universal.
The Treasury received around 162,000 responses to its plastics consultation, a record figure for the department.
Other measures being considered for inclusion in the autumn Budget, scheduled for November, include using taxes to encourage greater use of recycled plastic in manufacturing rather than new plastic, discourage the use of difficult to recycle plastics such as carbon black plastic and reduce demand for single-use plastics including coffee-cups and takeaway boxes.
Hayler said of these proposals: “A plastic tax will have the biggest impact when it is aimed at production and manufacturing, and we are pleased to see that the Treasury is looking at how to encourage greater use of recycled plastic at the start of the waste cycle.”
Extract from the Treasury’s ‘call for evidence’ on plastics
Respondents from across the supply chain have suggested a tax on the incineration of waste. This could be done based on input tonnages or the material composition of waste, or using some form of emissions metric.
However, there was recognition that this might impact certain sectors, such as cement kilns who currently substitute conventional fossil fuel with residual waste and tyres.
It was also suggested that the government could provide a lower rate of landfill tax on organic waste. Others suggested that the Government set out landfill tax rates further into the future in order to provide greater certainty which in turn would encourage investment and innovation.
There was some opposition to the use of any taxation at this stage from those concerned that the burden would fall on local authorities.
Industry reaction: Veolia
“We all want to increase the amount the UK recycles and a simple tax incentive could be used to encourage recyclable materials and designs for products and discourage the use of harder to recycle options such as black plastic and polystyrene yogurt pots.
“As a collector, sorter, re-processor and seller of recycled plastics Veolia appreciates the dynamics at play and other important measures will also help. These include clearer labelling - a simple green dot for example - so consumers know what can be easily recycled, a revision of the existing packaging recovery note system to remove the advantage given to export, and a simple deposit return system for plastic and aluminium cans.
“The setting of ambitions targets, such as a minimum percentage of recycled content in packaging, will ensure plastic recycling increases dramatically over the next five years to ensure a more circular and sustainable future”.