UK proposes Plastic Packaging Tax rules for chemical recycling

The enacted framework starts in April 2027

Sections 105–107 of Finance Act 2026 amend Finance Act 2021 so attributed recycled plastic can count alongside recycled plastic against the existing 30% threshold for chargeable packaging. They also remove pre-consumer plastic from recovered material. These substantive changes commence on 1 April 2027; regulation-making powers took effect when the Act passed. The October draft implements that framework, but its own commencement date remains a placeholder.^[4][5]

Attribution follows production and supplier evidence

Proposed regulation 3 uses successive three-month balancing periods starting when certification is granted, aggregating processes at one site and carrying forward unused attributable material. Regulation 4 permits credit transfers only within the same undertaking or a qualifying group relationship, with connected pipelines, outputs the transferring process could have produced, surrender of transferred credits and further HMRC notice requirements.^[2]

Accredited certification bodies would audit and monitor participants. Certified businesses receiving previously attributed inputs would obtain supplier declarations and certificates, undertake due diligence and report suspected non-compliance. Completing those checks would protect qualifying-input treatment if a supplier’s certificate were subsequently suspended or withdrawn. Scheme records would be retained for at least six years from creation, with a public searchable certificate database supporting checks.^[2]

Fuel treatment still requires supporting evidence

The accompanying reference document assigns a factor of zero to fuel-use products and one to non-fuel products. Intermediate dual-use factors reflect the proportion remaining on a technically feasible recycling pathway. Businesses would need evidence supporting their chosen factor. Annex A’s default values remain unfilled, so the consultation does not yet supply a complete set of industry defaults.^[3]

Draft regulation 16 would amend regulations 6, 7 and 23 of the Plastic Packaging Tax (General) Regulations 2022, SI 2022/117, covering evidence, recycled-content calculations and measurement. Manufacturers, importers and recycling groups would need connected production and supplier records to substantiate attributed content. These remain proposals, with further operational requirements reserved for HMRC notices.^[1][2][6]