Insights from ‘Plastic packaging taxes as a circular economy tool’ – London Climate Action Week event, June 2026

During London Climate Action Week 2026, CETEx hosted an event that launched a recently published policy brief, ‘The evolution of plastic packaging taxes’. The event explored how plastic packaging taxes can support the transition to a circular economy, drawing on emerging evidence from the UK and EU. The brief’s author, Lilia Akatova, presented the findings, followed by a panel discussion and Q&A with the audience.

The panel brought together leading voices with knowledge of packaging policy in the UK: Aleksandra Cavoski, Professor of Environmental Law, University of Birmingham; George Atkinson, Director of Policy, Valpak Ltd; and Adam Herriott, Interim Joint Head of Packaging, WRAP. The session was chaired by Sini Matikainen, Director of Economic and Fiscal Policy at CETEx. A diverse group of representatives attended, from the civil service, academia, consulting and industry, and actively participated in the Q&A discussion.

Key insights

Plastic packaging taxes differ by design – while some are being levied at the point of utilisation (e.g. in the UK and Spain), others are applied at the point of consumption (as in Portugal). There are advantages and disadvantages to both approaches, and each country should carefully choose the design to ensure that a plastic packaging tax meets its intended policy goals.

Extending the tax on plastic packaging to all single-use packaging materials would be a positive next step to curb material substitution, address gaps in packaging policy, and promote appropriate behavioural change incentives while ensuring the fiscal sustainability of packaging taxes.

While there are many policies currently emerging to tackle waste in the UK, coordination between them is currently insufficient. These policies include but are not limited to the Plastic Packaging Tax (PPT), Extended Producer Responsibility (EPR), Simpler Recycling and the upcoming Deposit Return Scheme (DRS). Lack of alignment is seen, for example, between the PPT and EPR: while EPR targets recyclability, PPT encourages recycled content. The integration of policies is crucial to delivering positive change instead of promoting different policy goals. Additionally, aligning with the EU and its policy reforms (EU Packaging and Packaging Waste Regulation and the Emissions Trading System) in the sector is key to making policy navigation easier for the industry and to strengthening the policy response.

The economics of the plastics industry cannot be fixed by the tax alone since the price of virgin plastics remains too low for recycled materials to compete at scale. Therefore, additional incentives are needed to promote the use of recycled materials, fix the markets and create investment certainty for the plastic packaging industry.

The UK’s current approach to the verification of recycled content remains a hurdle for many businesses, undermining tax compliance. The mandatory certification is seen as a long-awaited solution for this issue and is being discussed through HMRC’s ongoing consultation.

It is crucial for the UK and other countries to learn from each other and understand what worked and what didn’t with regard to packaging taxation and policy. While the UK, Spain and Portugal can provide insights on different aspects of tax implementation, other jurisdictions (e.g. France) can indicate why the proposed plastic packaging tax has not been adopted.