CURRENT ISSUES
Environment

Food production, storage and distribution have an unavoidable impact on the environment. FWD members seek to minimise this through initiatives that increase the efficiency of the supply chain, from the producer to the consumer.

Initiatives include: route optimisation technology; driver training; low carbon fuels; back hauling and recycling of waste and packaging; reducing packaging; recycling used cooking oil and reducing waste to landfill.

FWD is working closely with Government on its 25 year environment plan and other environmental policy proposals including those around using the tax system to tackle the use of single use plastics and other ways to tackle plastic waste.

Pressure had been growing for the Government to introduce a Deposit Return Scheme, which is intended to cut plastic, glass and metal drinks container waste by incentivizing consumers who return their drinks containers with a small cash sum.

The war on waste
Ones to watch

Environment Act

The Environment Bill has now passed into law, becoming the Environment Act. The Act aims to deliver the following for waste and recycling:

  • Extend producer responsibility to make producers pay for 100% of cost of disposal of products, starting with plastic packaging
  • A deposit Return Scheme for single use drinks containers
  • Charges for single use plastics
  • Greater consistency in recycling collections in England
  • Electronic waste tracking to monitor waste movements and tackle fly-tipping
  • Tackle waste crime
  • Power to introduce new resource efficiency information (labelling on the recyclability and durability of products)
  • Regulate shipment of hazardous waste
  • Ban or restrict export of waste to non-OECD countries

Plastic packaging tax

HMRC has launched a technical consultation on the draft Plastic Packaging Tax Regulations ahead of its introduction on April 1, 2022. HMRC is seeking views on regulations so the tax operates as intended and the legislative requirements associated for the administration of the tax, including tax returns and required content, record keeping, methods for weighing plastic packaging components Including units of measurement), and maintaining, producing evidence of and calculating recycled material in plastic

Guidance on the tax 

Business waste consultation

Defra  has launched a consultation  on delivering a consistent approach to waste collection and recycling from business premises. The Environment Bill includes measures for businesses to arrange for the collection of glass, metal, plastic, paper and card and food waste for recycling or composting. The consultation is seeking views on which materials should be in scope and the introduction of a micro-business exemption (less than 10 FTE employees) or a phased introduction of micro-business waste collections.

Plastic Packaging Tax

Guidance and further information to help businesses prepare for the new Plastic Packaging Tax has been published. The tax aims to encourage the use of recycled plastic and reduce production of new plastic. All businesses that manufacture or import plastic packaging must be aware of the new regulations and wholesalers manufacturing or importing 10 or more tonnes of plastic packaging over a 12-month period will need to register for the tax. Per metric tonne of plastic packaging, the rate of tax will be set at £200 and applies to any packaging that contains less than 30% recycled plastic. More guidance on the Plastic Packaging Tax is to be published later this year in advance of the introduction of the tax in April 2022.

Extended Producer Responsibility

The Government has launched a consultation on the introduction of Extended Producer Responsibility for packaging so that producers pay the full costs of dealing with the waste they place on the market, replac- ing the shared cost compliance system that has been in place for the last 25 years (raw material; converter, packer/filler; and seller). Targets up to 2030 will be set for six materials: aluminium, glass, paper/board, plastics, steel, and wood. The new scheme is due to go live in 2023.

Currently, companies with a turnover under £2million and an annual packaging turnover of under 50 tonnes are not required to be an obligated producer. The Government has three options under consider- ation to capture this volume:

Option 1: Lowering the de-minimis threshold to £1m and 25 tonnes.
Option 2: Obligating wholesalers for unfilled packaging sold to businesses below the existing or a reduced de minimis threshold, which would result in “a small increase in obligated producers, primarily wholesalers”
Option 3: Obligating manufacturers and importers of unfilled packaging sold to businesses below the existing or a reduced de minimis threshold. The consultation says “no new obligations would be placed on wholesalers”

The Government is proposing Option 3, which would mean no new obligation for wholesale. FWD has consistently campaigned for no new obligation for wholesale, and successfully stopped its introduction in 2014, and will be lobbying for Option 3 in line with the proposal, in order to maintain the wholesaler exemption. The consultation runs until June 4.

UK Deposit Return Scheme

A consultation has been launched on the operational details of a Deposit Return Scheme for England, Wales and Northern Ireland, for PET plastic bottles, glass bottles, and steel and aluminium cans.

Two options are consulted on: an ‘all-in’ system that includes containers up to 3 litres in size; and an ‘on- the-go’ system that excludes containers over 750ml, as well as containers that are part of multipacks. The Government expects the scheme will go live in late 2024 at the earliest. FWD will responding to the consultation, which closes on June 4.

Plastic packaging tax

Primary legislation for the Plastic Packaging Tax has been published. The tax will take effect from 1 April 2022 at a rate of £200 per tonne tax rate for packaging with less than 30% recycled plastic, with a regis- tration threshold of 10 tonnes of plastic packaging manufactured in or imported into the UK per annum. Registration applies to all businesses above the threshold, regardless of whether their packaging contains less than 30% recycled plastic. Imported plastic packaging will be liable to the tax, whether the packaging is unfilled or filled.

Environment Bill

The Government has published its Environment Bill (with Explanatory Notes)  which includes an intention to introduce a plastics tax in April 2022, and for a DRS and PRN scheme to be in place from 2023. 

The Bill sets out the Government’s policy on meeting the net-zero target by 2050, requiring producers to take more responsibility for products and materials that they introduce to the market, introducing a consistent approach to recycling and powers to introduce charges for single-use plastic items. FWD is working with the Defra on the wholesaler impacts of the Bill.

 Packaging Reform

FWD members are working hard to minimise their impact on the environment. Voluntary initiatives include back hauling and recycling of waste and packaging, reducing packaging, and reducing waste to landfill.

In contrast, heavy handed regulation to promote sustainability can be costly and burdensome for wholesalers largely operating as low margin businesses.

For example, if wholesalers no longer had a unique status under Extended Producer Responsibility (EPR), a significant increase in costs for the numerous wholesalers who supply the many SMEs around the country would occur. Our forecasting suggests that there would be over a 300% increase in the cost to wholesalers, many of whom are already facing significant financial challenges in the current economic climate. Any increases would be passed onto the consumers we serve in the form of higher prices.

We are calling on the Government to:

  • Maintain the current wholesaler obligation under new packaging reform measures
  • Packaging reform should link to other similar initiatives to ensure joined-up policy as successful EPR reform may lead to desired outcomes of the proposed tax on plastics packaging and Deposit Return Scheme (DRS)
  • Ensure any DRS for drinks containers is consistent across the UK
  • Ensure that future policy to promote sustainability is evidenced based

DRS in Scotland

January 2020: The Scottish Parliament Environment, Climate Change and Land Reform Committee has published its report on the draft Deposit Return Scheme regulations. The report includes a number of recommendations to the Scottish Government, including:

  • The scheme should be cost neutral for wholesalers
  • The Scottish Government to engage with the wholesale and distribution sector before finalising regula-tions
  • The single industry led Scheme Administrator should be set up with representatives from all parts ofthe supply chain. including wholesalers
  • Glass, HDPE and Cartons should be included
  • Minimum 20 pence deposit and a variable rate based on product size
  • Online sales should be included
  • If industry wishes to see a UK wide Scheme in operation it could extend the Scottish Scheme to otherparts of the UK or it could encourage the UK Government to bring forward proposals for a DRS
  • The timeframe for implementation of the scheme should be extended beyond April 2021FWD responded to the Committee’s call for written evidence, working closely with SWA. FWD were men-tioned in the report: “The Federation of Wholesale Distributors suggest producers should pay the deposit to the Scheme Administrator so that wholesalers are bypassed.” Several of the recommendations put forward by FWD and SWA have been adopted by the committee.The Scottish Government will respond to the Committee’s report within two months. The Scottish Govern-ment’s own consultation on the regulations, to which FWD responded, closed last week.A final version of the draft regulations will now be laid in the Scottish Parliament for consider- ation. The Environment Committee then has a further 40 days to consider it again, and report on it.