Report recommends the UK government reform tax policy to reward companies that design more environmentally friendly products.
The U.K.-based post-consumer plastics recycling company MBA Polymers has welcomed a House of Commons Environmental Audit Committee report calling for a lower VAT (value added tax) on products made with recycled content.
The report, which was issued at the end of July, is called "Growing a circular economy: Ending the throwaway society," and recommends longer warranty periods for consumer goods and a ban on food waste being sent to landfills.
"We had throwaway economics in the past, but that disposable society simply isn't sustainable in the 21st century," says Joan Walley MP and chair of the Environmental Audit Committee. “Less than half of the stuff we throw away each year is recycled and turned back into something useful.
“The good news is that with the right government support, we can stimulate U.K. manufacturing, create jobs, grow our GDP and reduce our environmental footprint," she adds. "We have to create a more circular economy that rewards innovative businesses, values natural capital and is resilient in the face of rising global resource prices.”
The report recommends that the government take steps to reform tax and producer responsibility regulations to reward companies that design greener products. In particular, it suggests that lower VAT rates should be introduced based on the environmental impact or recycled content of products. The report also says tax breaks should be considered for businesses that repair goods or promote reuse.
“The Environment Audit Committee's recommendation to lower VAT on products containing recycled content could be great news for British consumers and consumer goods companies trading in the U.K.,” says Nigel Hunton, CEO of MBA Polymers. "Should it be adopted, it could also provide a significant boost to the U.K.'s recycling industry. We fully support the creation of policies designed to incentivize sustainable product design and create a flourishing recycling market in the U.K.”
In addition to lowering VAT rates for recycled products, another important step will be establishing eco-design standards to ensure products are easier to repair, upgrade or recycle. In tandem, the government should work with industry to set longer minimum warranty periods for consumer products, the report finds. Finally, it also recommends streamlining the U.K.'s area-by-area approach to recycling in order to boost performance in line with the European Union’s plans to increase recycling rates to 70 percent by 2030.