Baskar Sundaram
Baskar Sundaram

As part of today’s Budget, the Government has made the following announcements related to energy and environment.

Plastic Packaging Tax

  • The Government will introduce a new Plastic Packaging Tax from April 2022 to incentivise the use of recycled plastic in packaging.
  • The Budget sets the rate at £200 per tonne of plastic packaging that contains less than 30% recycled plastic. This will apply to the production and importation of plastic packaging.
  • The level of the rate and threshold will be kept under review to ensure that the tax remains effective in increasing the use of recycled plastic.
  • The Government will also extend the scope of the tax to the importation of filled plastic packaging and apply a minimum threshold of 10 tonnes of plastic packaging.
  • A consultation on the design and implementation of the Plastic Packaging Tax will run until Wednesday 20th May.

Energy & Environment Spending

  • £800 million for new carbon capture and storage clusters.
  • £500 million to support new rapid charging hubs for Electric vehicles.
  • £640m “nature for climate fund” to protect natural habitats.
  • £700,000 to develop IT capability to administer the future Extended Producer Responsibility scheme for packaging.
  • £7.2 million in a national system to enable the smart tracking of waste movements across the economy.
  • Additional funding for flood repairs and defences.

Environment Taxes

  • The Government will reopen and extend the Climate Change Agreement scheme by two years.
  • The scheme allows businesses to reduce their CCL bill in exchange for meeting targets to improve their energy efficiency.
  • The terms of the extended scheme will be set out in a consultation to be launched shortly after Budget.
  • As part of this, the Government will simultaneously consult on long-term options for the CCA scheme.
  • The Government will legislate at Finance Bill 2020 to prepare for a UK Emissions Trading System (ETS), which could be linked to the EU ETS.
  • The Government will also legislate for a carbon emissions tax as an alternative carbon pricing policy and consult on the design of a tax in spring 2020.

Full Budget documents are here:

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