UK Budget 2020: environmental proposals attract mixed response

Out-Law Analysis | 13 Mar 2020 | 2:05 pm | 2 min. read

The UK government's 2020 Budget has delighted waste companies and is likely to lead to greater investment in infrastructure for plastics recycling.

However, it has also been widely criticised for not doing enough in other areas to improve protection for the environment.

Major announcements included details of a proposed plastic packaging tax, an additional £700,000 to establish the packaging Extended Producer Responsibility (EPR) scheme, the allocation of funding for a digital waste tracking system and £2 million to improve the evidence base to tackle fly-tipping.

Net zero commitments

The Budget also reemphasised the UK government's commitment to achieve 'net-zero' carbon emissions by 2050, with pledges to:

  • allocate an additional £10m in 2020-21 to support the design and delivery of net-zero policies and programmes;
  • create a Nature for Climate Fund which will invest £640m in tree planting and peatland restoration in England, planning to cover an area greater than Birmingham over the next five years;
  • publish two reviews this year – one into the economic costs and opportunities of reaching net-zero, the other led by Professor Sir Partha Dasgupta into the economics of biodiversity; and
  • further unspecified climate policy measures, to follow in the coming months in the lead up to the COP26 UN climate summit in Glasgow.

The limited detail on steps beyond the plastic packaging tax which the government will take to achieve its net-zero targets is partially to be expected, as the Net-Zero Review is due to be published this autumn. However, the announcements do reemphasise the government's drive towards a circular economy.

Plastic packaging tax

Chancellor Rishi Sunak confirmed that, from April 2022, the government will "charge manufacturers and importers £200 per tonne on packaging made of less than 30% recycled plastic". Sunak said that this would increase the use of recycled plastic in packaging by 40% - "equal to carbon savings of nearly 200,000 tonnes".

Messent Georgie

Georgie Messent

Partner, Head of Environment

The plastic packaging tax could be transformational for the waste industry. It will lead to greater demand for recycled plastics and should lead to an overhaul of management of plastics and substantial new infrastructure projects to deliver the changes needed..

The government will keep the level of the rate and threshold under review to ensure that the tax remains effective in increasing the use of recycled plastic.

This tax could be transformational for the waste industry. It will lead to greater demand for recycled plastics and should lead to an overhaul of management of plastics and substantial new infrastructure projects to deliver the changes needed.

The government has published a further consultation on the design of the plastic packaging tax. This closes on 20 May.

Other environmental proposals

Other notable environmental aspects announced in the Budget included commitments to:

  • establish a Carbon Capture and Storage (CCS) Infrastructure Fund to encourage development of CCS in at least two UK sites – one by the mid-2020s and a second by 2030. This will be important in decarbonising both power and industry;
  • consult on a Green Gas Levy to support biomethane production to increase the proportion of green gas in the grid, increase the Climate Change Levy that businesses pay on gas and reopen and extend the Climate Change Agreement scheme by two years;
  • fund the Heat Networks Investment Project for a further year to 2022 and provide £270m of new funding to enable new and existing heat networks to adopt low carbon heat sources;
  • increase the Climate Change Levy on gas in 2022-23 and 2023-24 while freezing the rate on electricity, and reopen and extend the Climate Change Agreement scheme by two years;
  • remove the entitlement to use red diesel from April 2022 except in agriculture, fish farming, rail and domestic and other non-commercial heating.

We will continue to watch for more detail on the UK's package of measures to achieve its net- zero carbon emissions target by 2050, and to support clients as they make changes to their operations to achieve their own net-zero targets.