James Murray MP

Exchequer Secretary to the Treasury

HM Treasury

By email: XST@hmtreasury.gov.uk

2nd August 2024

Dear Minister,

Firstly, we would like to congratulate you on your new role as Exchequer Secretary to the Treasury. We look forward to working collaboratively with you moving forward.

We are writing today to address a recent letter that was sent to you by the plastic packaging industry relating to the government’s consultation on mass balance calculations for chemical recyclate under the Plastic Packaging Tax (PPT).

Whilst we await the results of last year’s consultation, to which we did provide a response, we are concerned that the image of chemical recycling presented by the plastic industry in their letter paints an overly ambitious and positively exaggerated picture. Whilst this process could have a role in tackling the plastic pollution crisis, its high energy demands, low yields of high-value output and the need to source a degree of high-quality feedstock of collected plastic waste means it is unlikely to absorb the plastic waste no other recycling process can accept (a claim often touted by that sector).

In particular, we are opposed to two of the allocation methods put forward under the consultation, specifically the Fuel Exempt Allocation Method and the Free Allocation Method. If either of these are implemented as proposed, they risk deep and profound consequences for the recycling industry across all packaging materials as a result of damaged public trust and confidence about recycling packaging waste. Misleading ‘green claims’ about the certified recycled content of plastic packaging, made from polymers sourced from the chemical recycling process under either of these methodologies, are certain to lead to controversy in the future when consumers become aware that a recycled content claim on a piece of packaging does not necessarily translate into the package they are holding containing that proportion, or indeed any amount at all, of recycled plastics.

Recycled Content – Traditional (or Mechanical) Recycling vs Chemical Recycling:

With the traditional recycling of plastics (or indeed the recycling of other materials like aluminium, steel or glass), there is a direct and proportional relationship between the proportion of recycled input material (e.g. plastic or metal packaging waste) and the recycled content of the output of that process (e.g. plastic pellets or ingots of remelted metal). For example, if the mix going into a metal ingot was 50% recycled metal packaging and 50% primary metal, then the ingot would have a certified 50% recycled content and all products made from that ingot would be able to claim the same. This is proportional mass balance.

With either the ‘free allocation’ or ‘fuel exempt’ mass balance models however, this simple and sensible link is severed. ‘Free allocation’ accounting of mass balance allows the producer of the chemically recycled plastic to effectively allocate the recycled content of their end product however they see fit and sell it, as one or several batches of ‘certified’ effectively 100% recycled content, to the highest bidder despite the fact that the actual physical batch of plastic sent to those customers may have less than 100% or indeed 0% actual recycled content.

Problems caused by adopting the ‘free allocation’ or ‘fuel exempt’ mass balance models:

  1. ‘Recycled Content Badges’ undermines trust in packaging recycling for all materials and risks epidemic of greenwashing – Severing the link between ‘certified recycled content’ and the actual recycled content of material used to make packaging means that consumers, if recycled content is advertised on-pack (a commonplace occurrence), will effectively be making purchasing decisions based on misleading information. They will be buying virgin plastic packaging with a recycled content ‘badge’ which, when discovered and publicised, will undermine public confidence in packaging recycling and overall trust of eco-labels and claims that could lead to a surge in ‘green claims’ violations.
  2. Public buy-in essential to successful implementation of packaging waste reforms – We are at a crucial time for waste and circular economy policy in the UK, with Deposit Return Schemes (DRS) for drinks containers set to be rolled out across the country and Extended Producer Responsibility (EPR) setting new and ambitious recycling targets for packaging materials. Both reforms (set for implementation over the coming three years) are charging waste producers (i.e. brands and retailers) for the collection and recycling of waste packaging and crucially both absolutely rely on the cooperation of the public to be effective. We simply cannot risk undermining public trust at this juncture.
  3. Recycling is the only viable tool to communicate with the public about the circular economy – Recycling is the topic most comprehensively understood by most of the public when it comes to the circular economy; if the government want to promote a circular economy for the UK (as promised in its manifesto), then we must encourage good, positive recycling-centric behaviours from the public.

Our key concerns relating to the overall process of chemical recycling as well as those specific to mass balance:

Notes relating to chemical recycling and the government’s last consultation:

  • Chemical recycling is not yet operating at commercial scale in the UK, it is a developing technology, so a degree of research is still necessary to measure impacts.
  • The consultation in 2023 did not include an environmental impact assessment. Government should prepare one prior to making any decisions on the feasibility of mass balance for chemical recycling.
  • Definitions for recycled content applied to plastic material under the PPT should be considered in isolation, and not applied to other material groups.

Specific concerns relating to ‘free allocation’ and ‘fuel exempt‘ mass balance:

  • Mass balance could be used to determine recycled content for PPT but should not be communicated to consumers due to the risk of confusion / misunderstanding.
  • The ability to chemically recycle some polymers should not be considered when considering “recyclability” under EPR (Extended Producer Responsibility).
  • The Proportional Balancing mechanism is the best option for allocation, producers should not be able to allocate greater than the input proportion by percentage as recycled content.
  • Process losses could be significant for chemical recycling and therefore must be accounted for and deducted from all outputs.
  • A stringent accreditation and auditing system needs to be developed.

 

Conclusion:

We would encourage you to closely review all the responses to the 2023 consultation and to critically examine the claims made by those advocating for a mass balance methodology that is the least restrictive for the chemical recycling sector.

The only way to avoid the risks posed by widespread ‘greenwashing’ claims to the implementation of key packaging recycling reforms and public trust in recycling is to reject both ‘free allocation’ and ‘fuel exempt’ mass balance methodologies and choose to implement ‘proportional balance’ mass balance instead.

We would welcome the opportunity for a discussion about how we can assist the government in making an environmentally responsible decision relating to the management of chemical recycling, not just under the PPT but also other ongoing policy developments such as the expansion of the UK Emissions Trading Scheme.

Yours Sincerely,

 

Tom Giddings

Executive Director, Alupro