Budget 2025: Key Updates on Plastic Packaging Tax

Following months of discussion with industry stakeholders, the UK Government has outlined its plans for the Plastic Packaging Tax (PPT) in the latest Budget announcement.

What is confirmed?

· The PPT rate will rise in 2026–27 in line with CPI inflation, but there will be no escalator to increase recycled content requirements to 50% or raise the tax to £500 per tonne. This decision reflects concerns about fraudulent recycled content claims.

· A consultation is planned for early 2026 on introducing mandatory certification for mechanically recycled plastic packaging to qualify for PPT exemptions. The challenge will be ensuring this doesn’t create unnecessary burdens for businesses.

· From April 2027, the government will allow a mass balance approach for chemically recycled plastics under PPT rules. At the same time, pre-consumer waste will no longer count as recycled content.

While there’s no direct support to address the decline in UK plastic packaging reprocessing, these measures could offer opportunities for innovation. With a potential PRN reform consultation also on the horizon, 2026 is shaping up to be a pivotal year for the sector.