Environmental taxes were once a small policy area. In 2026 they are a meaningful operating cost for manufacturers, importers, hospitality businesses, and any company handling significant packaging volumes. Plastic Packaging Tax (PPT), Climate Change Levy (CCL), Landfill Tax, Aggregates Levy, and the Carbon Border Adjustment Mechanism (CBAM) are all live, all rising, and all generating their own compliance overhead.
Plastic Packaging Tax
PPT applies to plastic packaging produced in or imported into the UK that does not contain at least 30% recycled plastic content. The tax has risen each year since its introduction in April 2022 and now sits well above its original £200 per tonne rate. The exact rate is reviewed annually at Budget — at the time of writing it stands above £225 per tonne.
Who must register?
Any business that manufactures or imports 10 tonnes or more of finished plastic packaging components in a 12-month period must register for PPT, file quarterly returns, and pay the tax due. Importers must include packaging on imported goods, not just packaging materials themselves.
Common compliance failures
- Importers failing to register because they think PPT only applies to manufacturers.
- Underestimating the 10-tonne threshold — packaging on imported finished goods (e.g. bottled drinks, packaged foods, plastic-wrapped consumer goods) counts.
- Claiming the 30% recycled content exemption without supplier-level evidence to support it.
- Missing the quarterly return deadlines — late returns attract penalties even when no tax is due.
Due diligence on suppliers
PPT has joint-and-several liability provisions throughout the supply chain. A business buying plastic packaging from a non-compliant supplier can be assessed for the tax that supplier failed to pay. Documented supplier due diligence — questionnaires, supplier statements, contractual warranties — is now part of normal procurement.
Climate Change Levy
CCL is charged on the supply of taxable commodities (electricity, gas, LPG, solid fuels) to industrial, commercial, agricultural, and public-sector users. Domestic supplies and charities are exempt. Rates are typically updated annually at Budget.
Energy-intensive industries can negotiate Climate Change Agreements (CCAs) — a discount of up to 92% on CCL in exchange for energy-efficiency targets. The scheme has been extended and now covers a broader range of sectors than originally. If you operate in a CCA-eligible sector and don't have an agreement in place, the savings can be material.
Landfill Tax
Landfill Tax applies to waste disposed of at authorised landfill sites. The standard rate continues to rise above £100 per tonne, with the lower rate (for inert waste) on a slower trajectory. The tax is collected by site operators and passed on to waste producers — most businesses see it as a line on their waste invoices.
The tax-rate gap between landfill and recycling/recovery makes alternatives almost universally cheaper. For construction, demolition, and manufacturing businesses, formal waste segregation and recovery planning now produces real cash savings.
Aggregates Levy
Aggregates Levy applies to sand, gravel, and rock used in construction. The standard rate sits above £2 per tonne. The tax is borne by the extractor or importer but passed through the supply chain. For construction businesses, the levy is largely a line-item cost rather than an active planning area.
Carbon Border Adjustment Mechanism (CBAM)
The UK CBAM, modelled on but distinct from the EU equivalent, is being phased in to apply a carbon price to imports of carbon-intensive goods (iron, steel, aluminium, fertilisers, hydrogen, cement). Implementation is gradual, with full operation expected from 2027 — businesses with significant imports in these categories should be tracking implementation dates closely and reviewing supply-chain emissions reporting.
The bigger picture
Environmental taxes are a deliberate policy instrument: raise revenue, reduce the targeted activity. The trajectory across the next five years is clear — broader scope, higher rates, more complex compliance. For UK businesses, this means three things:
- Quantify the exposure. Map which environmental taxes apply, what the current annual cost is, and what the projected cost will be in three years.
- Document compliance. Registration, returns, supplier diligence, and CCA / exemption documentation.
- Re-engineer where the savings are large. Recycled content thresholds, waste segregation, energy efficiency, supplier mix.
How PushDigits helps
Environmental tax compliance is rarely glamorous, but the cost of missing it — penalties, retrospective assessments, joint liability up the supply chain — is now significant. Our business advisory team runs environmental tax health checks for manufacturers and importers, integrated with their annual accounts and corporation tax planning.
If you import finished goods in plastic packaging, operate energy-intensive plant, or work in construction or demolition, get in touch for a 30-minute environmental tax review.