Global brands consortium NextWave Plastics has announced consumer technology company Logitech and ocean-bound plastic suppliers Prevented Ocean Plastic and #tide ocean material have joined the network.
NextWave Plastics is a consortium of multinational technology and consumer brands to collaborate and promote transparency to help decrease the volume of plastic litter by developing a global network of ocean-bound plastic supply chains.
A growing number of its member companies across a range of industries are collaborating to reach their shared goal of diverting a minimum of 25,000 metric tons of plastic, equivalent to 2.7 billion single-use plastic water bottles, from entering the ocean by the end of 2025.
Adrian Grenier, the co-founder of Lonely Whale, said: “The addition of Logitech and ocean-bound plastic suppliers Prevented Ocean Plastic and #tide ocean material adds to the strength, diversity of knowledge, experience, and potential of the NextWave consortium to create even greater impact and transformational change within and across industries.”
Logitech joins the ranks of NextWave member companies like HP and IKEA; in addition to its pledge to avoid single-use plastic packaging whenever possible, Logitech was the first consumer electronics company to make the commitment to provide detailed carbon impact labeling on product packaging across its portfolio, with its first carbon labeled products hitting shelves back in April 2021.
Prakash Arunkundrum, global head of operations and sustainability, Logitech, said: “At Logitech, we are committed to continuing to expand our efforts to eliminate single-use plastic and we are increasingly using post-consumer recycled plastic as our preferred material at scale as we design for sustainability across our portfolio.”
From April 2022, a new tax on plastic packaging will be in place in the UK. Which products will be affected, how much is it, what penalties and sanctions are in place if manufacturers don’t comply, and what steps should the industry be taking now?
Disclaimer: The below notes reflect opinion and views as of 02/11/2021 and is a general summary of the legal position in England and Wales. It does not constitute legal advice.
Many of us make efforts to reduce our plastic usage in one way or another, but the UK government has now taken steps to target manufacturers and importers of plastic packaging by introducing a new plastic packaging tax (PPT); a tax, which, apparently, isn’t about revenue creation but has more exalted aims in mind – reducing the use of new plastics and increasing plastic recycling.
Which products will be affected by PPT?
PPT will be levied on plastic packaging that contains less than 30% recycled plastic. Imports of products in plastic packaging, such as drinks in plastic bottles, will also be caught. “Plastic packaging” will be classified as such if plastic is the heaviest component.
Rather surprisingly, given the environmental aims of PPT, “greener” plastics, such as biodegradable and compostable plastics, will still incur PPT (although this is currently being reviewed by the government) and the definition of “recycled plastic” does not include organic recycling.
Certain exemptions will apply, and PPT will not be incurred where the plastic packaging is for use:
With licensed human medicines
As transport packaging to import goods into the UK, e.g., packaging to secure the safe transit of goods
In aircraft, ship or railway stores for international journeys, i.e. not released into the UK.
Exported goods will also be exempt from PPT, provided that they are exported within 12 months.
How much is PPT?
The rate of PPT will be £200 per metric tonne of plastic packaging (that contains less than 30% of recycled plastic).
Who will pay PPT?
PPT will be charged from 1 April 2022 and potentially, everybody, from the largest plastic packaging manufacturer to the corner shop customer buying a packet of pasta, will see its effects. Although PPT will be levied on manufacturers and importers (both UK resident and non-UK resident) that manufacture (or import) ten metric tonnes of plastic packaging or more annually, the cost may well be passed along the supply chain to the end-consumers.
The draft legislation specifically provides that payment terms under existing contracts may be amended in order that the manufacturer or importer can pass on the PPT charge, although how this will affect business relations may well determine how often this option is used.
Any businesses that purchase plastic packaging (filled or not) should also bear in mind that liability for non-payment of PPT can be placed on other entities within the supply chain, i.e. not just the manufacturer or importer, if such entity “knew or had reasonable grounds to suspect that” PPT “had not been accounted for”. Government expects business customers to take “reasonable steps” to verify that payment has been made and intends to publish guidance on what constitutes adequate due diligence.
It would be no great surprise if this risk results in business customers requiring evidence of payment or some contractual assurance that payment has been made by the manufacturer or importer; requirements which will, no doubt, increase commercial complexity and the administrative burden on both parties. We must hope that the promised guidance will consider the commercial practicalities of such a provision.
What is clear is that contracts will need to specify whether costs are ex. PPT or inc. PPT, and invoices will need to state the applicable PPT amount.
Registration, filings and evidence
All manufacturers and importers of plastic packaging will need to register with HMRC unless they produce or import less than 10 metric tonnes in any 12-month period (regardless of the amount of recycled plastic that they use). The test to determine this is both forwards- and backwards-looking.
A business must register if:
At any time after 1 April 2022, it expects to manufacture or import at least ten metric tonnes of plastic packaging in the following 30 days (registration must occur within 30 days of the first day that this condition is met); or
It has manufactured or imported at least ten metric tonnes of plastic packaging in a 12-month period ending on the last day of a calendar month. If this applies, the business becomes liable for PPT from the first day of the next month and must register by the first day of the subsequent month. This second condition will initially be modified and will only look at the amount of plastic packaging which has been manufactured or imported from and including 1 April 2022.
(Imports that have not cleared customs or are not in free circulation in the UK are not included within these calculations.)
A group PPT registration is likely to be available and further details will be provided by government in due course, although it is expected that the ten metric tonnes test will be applied on a group basis, i.e. it will not be possible to disaggregate a business to avoid PPT. Where a group registration is made, all members of the group will be held jointly and severally liable for all the PPT debts of all group members.
Affected businesses will also be subject to increased record-keeping as they will need to maintain records to show:
The total amount in weight and a breakdown by weight of the materials used to manufacture the plastic packaging (excluding packaging which is used to transport imported goods)
The data and calculations used to determine if a packaging component is, for the most part, plastic and how much recycled plastic it contains
The weight of exempted plastic packaging and the reason for the exemption
The amount in weight of plastic packaging exported, and therefore the allowed relief from the tax.
Even where the recycled content test is met, businesses will need to register, file, and retain evidence to show that the relevant plastic packaging meets the threshold (plastic packaging will be assumed not to meet the recycled content test unless it is shown to do so).
Penalties and sanctions
Various civil and criminal sanctions and penalties apply under the draft legislation depending on the nature and severity of the offence. For example, failure to register with HMRC, failure to complete the requisite filings, or failure to pay the PPT due will incur a penalty.
Practicalities
Manufacturers and importers of plastic packaging should start to consider how the PPT regime will affect them and bear in mind that some effects may not be purely financial. For example:
How much plastic packaging manufactured/imported will be taxed, i.e. how much currently falls foul of the 30% recycled plastic requirement?
Consequently, what is the likely PPT liability?
Who will bear this liability – the manufacturer/importer or their customers? And what conversations need to be had with customers in this regard?
Can this liability be mitigated in any way, for example, an increase in the use of recycled plastic?
How will the information required to determine the amount of PPT payable be documented, evidenced, and recorded?
Who in the business will be responsible for complying with PPT requirements, collating the evidence, maintaining the records, and dealing with HMRC?
Who will liaise with customers regarding increased costs and evidential requirements?
What staff training will be required in relation to the new PPT legislation?
Disclaimer:
This note reflects opinion and views as of 02/11/2021 and is a general summary of the legal position in England and Wales. It does not constitute legal advice.
Almost one in five consumers (19%) have said they would not buy from online retailers who do not use sustainable packaging, according to a survey published today (1 November, 2021).
UK consumers share their experiences of opening online deliveries. The survey was completed by 600 people over the summer and covered online purchases from the fashion, food & drink, home & garden, and health & beauty sectors, with products ranging from cosmetics to large home appliances.
With national lockdown restrictions in place throughout the first part of 2021, consumers increasingly turned to the internet to meet their shopping needs while they remained at home. The survey showed that 88% of respondents said they spent more time shopping online during the pandemic and, of those, 64% said this behaviour would not change in the future, with 30% of consumers saying that they are likely to increase their online shopping.
Confirming the rise of the eco-conscious shopper, 97% of respondents said they follow recycling instructions where possible. However, 14% advised they were unsure about the recyclability of the packaging they received due to no instructions regarding disposal. This highlights the need for clear directions for end-users to understand how to dispose of their packaging responsibly.
Other highlights of the survey include:
Delivery:96% of respondents said they favoured home delivery over click and collect, with 55% selecting home delivery for convenience, and 40% taking advantage of free delivery.
Sustainability: 73% of respondents thought that the packaging they received was recyclable.
Packaging branding: There was an increase in deliveries with unbranded packaging, growing from 32% in 2020 to 45% in 2021, suggesting that an increasing number of online retailers are missing the opportunity to connect with customers through an immersive unboxing experience that represents their brand.
Damages: There was a slight increase in the percentage of damaged deliveries, increasing from 5% in 2020 to 9% in 2021.
The survey was carried out across the summer of 2021, with respondents sharing images of their unboxing experience as well as completing the survey. The results are designed to provide retailers with valuable feedback from consumers.
The experience of opening a package containing a product ordered online has become known as “unboxing”. Video and consumer reviews of not only products but the packaging that they arrive in are an important consideration for retailers.
A global multi-participant project has been launched to address polypropylene (PP) in the plastics recycling stream.
Data suggests that PP accounts for around 20% of the world’s plastic, mostly used in pots, tubs, trays and films for food packaging.
It is also prevalent in non-food household and personal care products, which complicates recycling the 700,000 tonnes/ annum used in the UK alone.
PP packaging usually either goes to waste-to-energy, landfill or being down- cycled into low-performance applications.
Additionally, the absence of food-grade recycled PP (FGrPP) means that all PP food packaging is currently made from virgin plastics.
With the Plastic Packaging Tax due to come into effect next year, Nextek’s NEXTLOOPP project uses ‘commercially proven’ technologies to separate food-grade PP using marker technologies.
These include new decontamination stages to ensure compliance with food-grade standards in the EU and the USA.
Major organizations including brand-owners, suppliers, universities, and industry associations, through to end-users in the PP supply chain, have joined NEXTLOOPP to produce a ‘world-first quality FGrPP that will be available in the UK by 2022.
So far 29 organisations across the PP supply chain have joined NEXTLOOPP.
Edward Kosior, chief executive of Nextek, said creating a circular economy for food-grade PP packaging waste fills the gap in the packaging recycling sector and helps reach net-zero carbon targets.
“It will allow brand owners to meet their recycling targets and significantly reduce the use of virgin plastics from petrochemicals. It will also greatly reduce CO2 emissions and divert waste from landfill and waste-to-energy.”
WRAP has confirmed that The UK Plastics Pact is supporting the NEXTLOOPP project. Acting director insights and innovation, Claire Shrewsbury, said: “Achieving this will enable UK Plastics Pact members to reach the target of an average of 30% recycled content across all packaging by 2025. WRAP believes that NEXTLOOPP offers a potential solution to this and we will work closely with the other stakeholders to develop the project further.”
Viridor’s director of business development (polymers), Luke Burgess, said: “Viridor believes that extending its polymers expertise and recycling experience to cross-sector collaboration and innovation is key to ensuring more waste is valued as a resource and returns to the circular economy where it belongs. Reducing our reliance on virgin plastic not only empowers greater circularity, but the continued use of recycled material also offers significant energy savings, contributing to considerable wider environmental benefits for the UK.”
Lubna Edwards, group sustainability and marketing director at Robinson Packaging, added: “Demand for this high-value recycled material will continue to rise as we shift away from using virgin material. Much of our UK business depends upon PP and this ground-breaking project gives us the opportunity to tap into cutting-edge technology, learn from industry partners and trial the material for sustainable use in our packaging.”
Adam Elman, group sustainability director at Klockner Pentaplast, said: “Capturing the value of plastics by keeping them within the economy and out of our natural environment is key to meeting the Plastics Pact targets and very much part of our business strategy. Swapping the traditional ‘take-make-waste linear model for a circular system is also one of the many important steps towards significantly reducing our carbon emissions. We are proud to be working in collaboration with NEXTLOOPP on this important project.”
If you’re interested in starting an environmentally sustainable business, you’ll have to think about whether your products or packaging are biodegradable. For such a common term, though, there is plenty of confusion about what it actually means.
So, what does it mean for something to be biodegradable? In basic terms, the definition is simple: If something is biodegradable, then, given the right conditions and presence of microorganisms, fungi, or bacteria, it will eventually break down to its basic components and blend back in with the earth. Ideally, but not always, these substances degrade without leaving any toxins behind.
For example, when a plant-based product might break down into carbon dioxide, water, and other naturally occurring minerals, the substance seamlessly mixes back into the earth, leaving no toxins behind. Unfortunately, many materials—even ones with a biodegradable label—do break down in a more harmful manner, leaving chemicals or other damaging substances in the soil.
In terms of environmental benefits, the best biodegradable material will break down quickly rather than taking years. It leaves nothing harmful behind and saves landfill space. Unfortunately, not everything that’s advertised as “biodegradable” meets these criteria. If you’re going to run a green business, you should know how to make sure the materials you use are safely and efficiently biodegradable, as well as accurately labelled.
What Materials Are Biodegradable?
Some items are obviously biodegradable. Examples include food scraps and wood that hasn’t been treated with chemicals to resist bugs and rot. Many other items, such as paper, also biodegrade relatively easily. Some products will biodegrade eventually, but it may take years. This includes steel products, which eventually will rust through and disintegrate, and some plastics.
However, conditions are important to encourage biodegradability. Products that will biodegrade in nature or in home compost heaps may not biodegrade in landfills, where there’s not enough bacteria, light, and water to move the process along.
Biodegradable ≠ Compostable
Many organic companies use biodegradable packaging for products or produce organic biodegradable products, but the items may not be as biodegradable as customers think. To make matters more confusing, many items are labelled as “compostable.”
Compostable products are all biodegradable, but they are specifically intended for a composting environment. In the right setting, these products break down even more quickly, usually within 90 days, and they leave behind a nutrient-rich organic material called humus, which creates a healthy soil environment for new plant growth.
Whether an item is compostable or simply biodegradable, it needs to be placed in an environment that facilitates its breakdown. Compostable products require composting environments. But, even some biodegradable items need to be degraded in a controlled composting environment or facility—and very few of these facilities exist in the United States. These large facilities are designed to keep materials at 140 degrees Fahrenheit for 10 consecutive days.
For example, PLA, a popular biodegradable material for green companies, will only decompose into carbon dioxide and water in a controlled composting environment, not in a backyard composting arrangement, according to standards developed by the Biodegradable Products Institute.
With all of these variables, business owners need to communicate clearly with their customers about what they mean when they say “biodegradable.” Even better are those businesses that take it a step further and educate their customers about how to properly dispose of their products.
Biodegradable Claims on Plastic in California
Businesses operating or selling to customers in California will have an extra impetus to be careful with these terms. California tends to have more stringent regulations involving food and product environmental claims (hence the warning labels stating items have been “found by the State of California to cause cancer, birth defects or other reproductive harm”).
When it comes to biodegradable claims, the state is also out in front with regulations limiting the use of certain terms. For example, in Calfornia, it’s illegal to sell any plastic item, or any item with plastic packaging, that includes a label stating it’s “biodegradable,” “degradable,” “decomposable,” “compostable” or “marine degradable” (or any alternate form of those terms).
It’s also illegal in the state to sell a plastic product labeled “home compostable” (or some equivalent claim) unless the manufacturer holds a Vincotte OK Compost HOME certificate. Vincotte is a Belgium-based inspection and certification organization. Finally, the state bans the use of potentially misleading marketing terms, such as “environmentally friendly,” when they’re applied to plastic products and packaging.
Use Terms Carefully
Whether you’re doing business in California or not, it’s wise to be thorough in planning your sustainable business. After all, terms like “biodegradable” are only meaningful if using them actually helps the environment. And that’s the goal for more and more business owners today.
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