{"id":10519,"date":"2025-11-26T16:18:04","date_gmt":"2025-11-26T21:18:04","guid":{"rendered":"https:\/\/www.packagingindustrynews.com\/?p=10519"},"modified":"2025-11-26T16:18:04","modified_gmt":"2025-11-26T21:18:04","slug":"autumn-budget-2025-offers-mixed-signals-for-packaging-sector","status":"publish","type":"post","link":"https:\/\/www.packagingindustrynews.com\/?p=10519","title":{"rendered":"Autumn Budget 2025 offers mixed signals for packaging sector"},"content":{"rendered":"


\n<\/p>\n

\n
\n
\n \n <\/picture>
The budget supports circular economy initiatives, but supply-chain pressures and recycling gaps continue to challenge the industry. \/ Credit: Juice Flair via Shutterstock <\/figcaption><\/figure>\n<\/p><\/div>\n

The UK\u2019s Autumn Budget 2025 has drawn a cautious response from the packaging and recycling industry.<\/p>\n

The government confirmed that the Plastic Packaging Tax (PPT) will rise in line with inflation, while allowing businesses to use a \u201cmass balance\u201d model to account for chemically recycled plastic.<\/p>\n

\n
\n
\"\"\/<\/figure>\n

Discover B2B Marketing That Performs <\/h4>\n

\n\t\t\t\t\t\tCombine business intelligence and editorial excellence to reach engaged professionals across 36 leading media platforms.\n\t\t\t\t\t<\/p>\n


\n\t\t\t\t\t\t\tFind out more <\/svg><\/span><\/a><\/p>\n<\/section>\n<\/div>\n

That welcomed move comes against growing concern that the tax regime has so far failed to stimulate domestic demand for recycled resin.<\/p>\n

What changed under the budget<\/h2>\n

From 1 April 2025 the PPT, which applies to plastic packaging with less than 30\u202f% recycled content, increased in line with CPI \u2014 the rate now stands at \u00a3223.69 per tonne.
Crucially, the government has confirmed that the mass balance approach will be permitted. This allows companies to declare chemically recycled plastic content under PPT compliance, a shift long advocated by parts of the industry.<\/p>\n

\u00a0No change was made to the recycled\u2011content threshold (remains at 30\u202f%), nor was there a progressive escalator to 50\u202f% recycled content \u2014 a point of criticism from recycling sector groups.<\/p>\n

Industry response: optimism and reservations<\/h2>\n

Some actors in the packaging and food\u2011manufacturing sectors welcomed the mass balance decision.<\/p>\n

For example, representatives from the Food and Drink Federation (FDF) saw the move as an opportunity to open \u201cnew markets for advanced recycling in the UK,\u201d potentially supporting food\u2011grade recycled packaging use.<\/p>\n

However, groups such as the RECOUP network remain sceptical about the PPT\u2019s impact.<\/p>\n

They point out that since the tax\u2019s introduction in 2022, a growing number of UK recycling plants have shut or mothballed capacity \u2014 blaming a lack of a robust verification system for recycled content and cheaper virgin\u2011plastic imports undermining domestic reprocessing.<\/p>\n

\u00a0Calls persist for a more ambitious PPT design \u2014 including a gradual increase in the recycled\u2011content threshold to 50\u202f% and stronger regulatory oversight over imported \u201crecycled plastics\u201d.<\/p>\n

Implications for packaging supply chains and the circular economy<\/h2>\n

The budget\u2019s decision to allow mass balance accounting could encourage investment in chemical recycling technologies.<\/p>\n

In principle, this may help packaging producers looking to source recycled polymers, especially for flexible films or lower\u2011grade plastics where traditional mechanical recycling struggles. That could improve supply\u2011chain resilience and bolster circular\u2011economy ambitions.<\/p>\n

On the other hand, with no tightening of recycled\u2011content thresholds, the core economic disincentive to virgin plastic remains relatively weak. The resulting \u201cwidening price gap\u201d between cheap virgin material and more costly recycled content is likely to endure \u2014 limiting demand for UK\u2011reprocessed polymers.<\/p>\n

Some packaging firms may feel squeezed by this continuing imbalance, particularly those already coping with new compliance costs under extended producer responsibility (EPR) schemes and elevated energy and waste-treatment costs.<\/p>\n

What the industry wants next<\/h2>\n

Industry stakeholders urge the government to consider introducing a progressive escalator for recycled content \u2014 moving the threshold from 30\u202f% to 50\u202f% over this Parliament \u2014 to generate stronger demand for UK\u2011recycled plastic.<\/p>\n

\u00a0There is also a call for more rigorous verification of recycled-content claims, especially for imported plastics. Without credible oversight, the competitive disadvantage for domestic recyclers will continue.<\/p>\n

Finally, broader application of recycling incentives beyond packaging \u2014 for example to other sectors using plastics \u2014 is suggested as a way to build scale and market confidence in recycled polymers, helping to stabilise end markets.<\/p>\n

The Autumn Budget 2025 has offered modest support for a circular packaging economy. The mass balance change is a pragmatic step.<\/p>\n

It now falls to regulators, recyclers and brand owners to turn that allowance into tangible demand for recycled materials \u2014 otherwise, the structural weaknesses of the UK\u2019s plastics supply chain are unlikely to be resolved.<\/p>\n

<\/p>\n

<\/p>\n

\n