Forgot your password?
Industry Group Responds to Proposed Bill Taxing Virgin Plastics

This week, the American Chemistry Council (ACC) said that a recent bill introduced, which would impose a $.20/lb fee on virgin plastics, would essentially punish producers of valuable American products without advancing a circular economy for plastics.

The Rewarding Efforts to Decrease Unrecycled Contaminants in Ecosystems (REDUCE) Act, introduced last week by Senator Sheldon Whitehouse (D-RI), is aimed at reducing plastics pollution and imposing a $.20/lb fee on the sale of new or virgin plastic used for single-use products. Whitehouse said the fee would also help recycled plastics compete with virgin plastics on more equal footing and hold the industry accountable for environmental plastics pollution.

Through the REDUCE Act, manufacturers, producers, and importers of virgin plastic resins would pay a fee of $0.10/lb in 2022, which would gradually increase to $0.20/lb in 2024, and apply to virgin plastic used to make single-use products, including plastic packaging, beverage containers, bags, and foodservice products. Exported virgin plastic resin and post-consumer recycled resin would be exempt.

Companies that use virgin plastic to make medical products, containers or packaging for medicines, personal hygiene products, and any packaging used for the shipment of hazardous materials would not have to pay the fee and could qualify for a full rebate for any fees paid on the plastic they use for such products. Virgin plastic used to make non-single-use products would also be eligible for the rebate.

The proposed legislation would also establish a Plastic Waste Reduction Fund, which the bill would direct revenue from the virgin plastic fees. Those funds would be available for plastic waste reduction and recycling activities, including improving recycling infrastructure.

The ACC said while it shares Whitehouse's concerns about plastic waste, the bill is not comprehensive, taxes only certain plastics, and does not benefit the entire plastics industry.

"Unfortunately, the REDUCE Act takes a piecemeal approach by adding an excise tax on certain plastics sold, plus a series of confusing rebates that appear to pick winners and losers among consumer product companies, with some paying the tax and others receiving a rebate," said American Chemistry Council Vice President Joshua Baca. "Such a scheme would essentially punish producers of valuable American products without advancing a circular economy for plastics."

Baca added the bill also could incentivize a switch to use alternative materials that can produce significantly more greenhouse gas emissions than plastics. Many US plastics producers and end-user companies already have sustainability plans and invested millions of dollars in helping curb plastics waste and promote a circular plastics economy.

Last week, specialty product company Eastman entered an agreement with consumer-production company Procter & Gamble to further accelerate the transformation of plastic packaging and collaborate on recycling solutions to enable a circular economy. P&G plans to integrate Eastman Renew materials into select product packaging later this year.

In May, major resin producers Dow, LyondellBasell and Nova Chemicals pledged to invest $25 million in the Closed Loop Circular Plastics Fund to boost recycling technology, infrastructure, and markets for recycled Polypropylene and Polyethylene. The fund is expected to offer $100 million over the next 10 years through a combination of the founding investors, additional corporate investors, and financial institutions.

The ACC has also established a goal for 100% of US plastic packaging to be re-used, recycled, or recovered by 2040. In July the Council called on Congress to take its 5 Actions sustainability plan to accelerate a circular economy, including requiring all plastic packaging to include at least 30% recycled plastic by 2030 through a national recycled plastics standard.

ACC's 5 Actions plan would:

1. Require all plastic packaging to include at least 30% recycled plastic by 2030 through a national recycled plastics standard.

2. Create a modern regulatory system to develop a circular plastics economy.

3. Develop national plastics recycling standards.

4. Study the impact of greenhouse gas emissions from all materials to guide informed policy.

5. Establish an American-designed producer responsibility system.

"Congress right now is looking at placing significant excise taxes on the raw materials used to make plastics, which would effectively tax virgin plastics," ACC's Baca said. "It's not time to pile on even more taxes and further fuel inflation."

By Brian Balboa for The Plastics Exchange.

Privacy Statement | Copyright © 2022 The Plastics Exchange. LLC. | Patent Protected | All Rights Reserved.