Duo challenges the climate logic of the UK packaging tax

UK packaging manufacturer Duo has warned that the Plastic Packaging Tax may be discouraging the use of bio-based plastics even when these materials can deliver a lower carbon footprint than recycled-content alternatives.

The company argues that the tax’s focus on recycled content does not account for the wider lifecycle emissions of different plastic feedstocks, creating situations where businesses select a tax-compliant material even when another option could potentially offer greater carbon savings.

PPT rewards recycled content above 30%

The UK Plastic Packaging Tax applies to plastic packaging manufactured in or imported into the country when it contains less than 30% recycled plastic.

Since the tax was introduced in April 2022, businesses have declared approximately 5.8 million tonnes of packaging containing at least 30% recycled content, according to HMRC figures cited by Duo.

Bio-based plastics receive no equivalent exemption

Duo’s criticism focuses on the treatment of bio-based plastics, which remain liable for the tax even when they are derived from renewable feedstocks and have a lower calculated carbon impact than conventional fossil-based polymers.

The company says this creates a commercial disadvantage because businesses can avoid the tax by selecting recycled-content plastic while continuing to pay it if they choose certain bio-based alternatives.

Company claims potential carbon savings are being missed

Duo estimates that the 5.8 million tonnes of tax-compliant recycled-content packaging declared since 2022 would carry a carbon footprint of approximately 13.9 million tonnes of CO2e.

The company calculates that this represents around 3.26 million tonnes less than the equivalent volume produced entirely from virgin plastic, but argues that the impact could have been significantly lower if bio-based polyethylene had been used instead.

GreenPE demand declined after tax introduction

Duo says sales of its GreenPE mailing bags, produced using Braskem’s I’m green bio-based polyethylene, had been growing before the Plastic Packaging Tax came into force.

Demand then fell sharply from 2022 as customers increasingly switched to packaging containing sufficient recycled plastic to qualify for the tax exemption.

Price-sensitive brands prioritise tax compliance

The company argues that many retailers and brands are making this transition reluctantly because they cannot absorb the additional tax cost associated with bio-based materials.

In highly competitive markets, even relatively small differences in packaging cost can influence procurement decisions, meaning fiscal incentives can rapidly reshape material demand.

Carbon performance and circularity do not always align

The debate highlights a broader challenge in sustainable packaging policy. Recycled content can support circularity and reduce demand for virgin fossil resources, but lifecycle carbon performance can vary significantly depending on feedstock, manufacturing process, transport and end-of-life assumptions.

A material that performs well against one sustainability metric may therefore deliver weaker results against another, making single-criteria incentives increasingly controversial.

Duo calls for broader assessment of packaging materials

Duo argues that future packaging policy should consider carbon impact alongside recycled content rather than relying on a single threshold to determine tax liability.

Such an approach could potentially create space for certified bio-based materials, recycled plastics and other lower-impact feedstocks to compete based on measurable environmental performance.

Plastic tax policy faces growing scrutiny

The criticism comes as the UK continues to revise the Plastic Packaging Tax framework, including future changes to recycled-content accounting and mass balance certification.

For packaging producers and brand owners, the debate demonstrates how tax policy can directly influence material selection. As sustainability targets become more sophisticated, regulators may face increasing pressure to ensure that incentives for circularity also align with wider carbon-reduction objectives.