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PACKAGING


THIN WALLING SOLUTION TO TAX BURDEN


designers have long understood the correlation between encouraging end user recycling and how single materials assist with the post-consumer waste, segregation, regrind and reuse agenda. It’s why single material thin walling remains


such a fast growing segment. Food is by far the largest thin walling market. However, there are also a number of non-food applications, such as pharmaceuticals, cosmetics, paint and adhesives. Stackability of containers is another reason


Packaging specialist at Sumitomo (SHI) Demag UK, Ashlee Gough, shares some insights that could help the packaging and recycling value chain to lessen the financial burden of the new UK Packaging Tax


escalating raw material costs – double what there were 12 months ago – towards even greater counterproductive pressures. Despite the good intentions of incentivising


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the use of recycled materials, the compliance obligations and numerous abstracts that continue to stoke the zealots both sides of the argument have overshadowed the circular and sustainable practicalities that can be accomplished. Applicable to all plastic packaging with less


than 30% recycled content which is manufactured in the UK, in addition to unfilled packaging imported into and filled in the UK, the tax concept in theory sounds like a sensible ‘catch-all’ environmental solution. Yet for nearly 50 percent of end packaging users – predominantly in food packaging , it’s more like a ‘Catch 22’ situation. Existing regulations and technical constraints severely restricts the viability of recyclate processing in the largest packaging sub-sector – food packaging. “Chargeable for each plastic component,


food safety laws mean caps and closures, pots, tubs and trays are all manufactured using virgin polymers and therefore are all liable for the UK Packaging Tax,” highlighted Gough. “If a plastic packaging component is made from multiple materials but contains more plastic by weight than any other substance, it will be classed as a plastic packaging component for the purposes of the


1 JUNE 2022 | PROCESS & CONTROL 0


n 1 April 2022 the UK Packaging Tax came into force. Pushing an already fragile industry contending with


tax. Additionally, it’s worth noting that biodegradable, compostable and oxo- degradable polymers are not exempt either!” Applications where the packaging function is


secondary to the storage function are not subject to the tax. The lengthy HMRC list cites toolboxes, video game cases, and board game boxes as well as printer cartridges, inhalers and teabags as spared examples. Given the prolific range of in-scope


packaging applications, reducing material weight (light weighting) is the predominant technique that can be deployed to limit exposure to this new tax. This usually means thin walling, a practice adopted in primary food contact and medical packaging applications. Additionally, MuCell injection moulding using a physical foaming process can reduce weight by up to 35 percent. For several decades now light-weighting


and consumer convenience have given packaging manufacturers a strong commercial incentive to reduce material in packaging applications. Gough cites closure manufacturers as being among the most successful, with many slashing raw material consumption by over 35 percent in recent years. The paradox, notes Gough, is that EU Tamper Evident rules will reverse much of this sustainability-driven progress. Nevertheless, packaging manufacturers and


designers are well versed at responding to rapid demographic and lifestyle changes and balancing a wide range of variables, including cost, increased strength, recycle rates and functional requirements. Indeed, packaging


food suppliers and retailers select thin walled packaging over thermoformed containers. What’s more, the price of oil directly correlates to the price of plastics, and this will always cause a ripple effect on business costs. With Europe having introduced their


Packaging Levy at the start of 2021, the Group’s Packaging Development Director Arnaud Nomblot adds further insight. He affirms that despite alternative materials projects emerging, the real cost of recyclate materials continues to limit commercial viability, especially in food contact applications. In fact, he says that absorbing the tax on virgin polymers remains more economical than switching to approved recyclate materials which can cost upwards of $900 more per ton than virgin polymers. Industry analysts are forecasting that the


price of recyclate materials have yet to peak. An unintended consequence of increasing demand for any commodity is prices generally increase too. Financial incentives play a critical role, cites


Nomblot. Scale is also important. Lots of European countries are now looking to emulate Germany’s successful plastic and glass bottle return scheme (Einwegpfand). “Here the deposit for plastic bottles is €0.25, but it gives consumers the financial impetus to return. It’s a model that considers the entire chain of responsibility and should be emulated globally.” Circumventing this tax for most is


impossible, reiterates Gough. Virtually all packaging converters and users process or import more than 10 tonnes of plastics packaging in a 12-month period. For every metric tonne, the equivalent of 50,000 plastic drink bottles, the user that makes the most substantial modification – in most instances the manufacturers filling the packaging in their factory – will be liable for the £200 per material tonne tax. Assuming this tax cost is passed down the


chain to householders by packaging producers, manufacturers and retailers, the average impact of plastic packaging tax would be in the range of 7 pence per week per household, reports Imperial College London in their Shaping the Circular Economy abstract.


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