The UK government has confirmed that companies using chemically recycled plastic for packaging will be able to count this material towards the recycled-content threshold under the Plastic Packaging Tax (PPT) from 1 April 2027.
At the same time, plastic produced from pre-consumer waste (such as production off-cuts) will no longer qualify as “recycled content” under the tax.
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How the mass balance approach works for chemical recycling
Under the new rules, chemically recycled plastic — once processed and certified — can be allocated against finished packaging through a Mass balance approach (MBA).
This methodology tracks recycled input (the plastic waste or feedstock) through to final output (the plastic packaging product), even when blended with virgin plastic.
The change addresses previous challenges: until now, businesses using chemically recycled plastic struggled to prove the recycled content in a way accepted by PPT rules.
The new approach aims to offer a transparent, auditable route for allocating recycled content.
To qualify, manufacturers and importers will need certification under a scheme compliant with PPT-MBA standards, and maintain traceable records from waste through to finished packaging.
Pre-consumer waste excluded: what changes
From April 2027 the UK will remove pre-consumer waste — such as production scrap, off-cuts or regrind from manufacturing — from the definition of recycled plastic eligible for PPT exemptions.
That means using scrap plastic alone will no longer help manufacturers meet the 30% recycled-content threshold required to avoid PPT.
This move is designed to close a long-standing “loophole” and strengthen the environmental integrity of the tax.
According to government guidance, the change will level the playing field between firms and ensure that recycled content reflects genuine post-consumer or chemically recycled material — not simply internal production waste being reused.
What it means for the packaging industry
For packaging manufacturers and importers, the 2027 changes could prompt a shift in sourcing strategy.
Companies that have invested heavily in using pre-consumer scrap to meet recycled content targets may face increased tax liability unless they switch to recycled feedstock verified under the mass balance scheme.
The changes may also stimulate demand for chemically recycled plastic and boost investment in chemical recycling infrastructure, particularly for materials that are difficult or expensive to recycle mechanically (e.g., certain film grades or mixed-polymer packaging).
At the same time, businesses will need to prepare: they must ensure supply-chain traceability, secure certification, and update reporting systems to benefit from the new rules. Failure to adapt could result in higher tax bills or compliance risk under PPT.
The UK’s decision to accept chemically recycled plastic under a mass balance approach marks a significant development for sustainable packaging.
As the 2027 effective date approaches, packaging firms and material suppliers will need to assess their strategies — balancing cost, compliance and environmental credentials before the new rules apply.
