Eu Plastic TAX - New Frontiers for WPCs

June 2020
EU PLASTIC TAX - NEW FRONTIERS FOR WPCs?

The introduction in July 2020 of the so-called Plastic Tax 2020, started with Article 1 of the Budget Law of 2019, now makes it clear to everyone that the individual European States are adopting the European Directives that are increasingly aimed at stimulating national industries towards production with less use of plastic materials, favouring the search for alternative solutions.
For the time being, this first provision affects the so-called MACSI products, or single-use products, intended for the containment, protection, handling, or delivery of both goods and food products, also in the form of sheets, films, or strips. Compostable products, in which the plastic component is less than 40%, and containers of medicines and medical devices remain outside the application of the Plastic Tax.
During the extraordinary meeting of the European Council which ended on 21 July, in addition to the approval of the 750 billion Recovery Fund, an agreement was also reached regarding the new EU Plastics Tax intended to target non-recycled plastic packaging waste, in force from the beginning of 2021.
It is therefore even more strategic for companies in the plastics sector to deal with this new reality. What solutions?
First of all, we must distinguish the different uses of plastic products.
Firstly, it is necessary to consider the products which, due to their construction characteristics, will inevitably remain in plastic material, or components for articles with a multi-year duration, such as plastic gears, gaskets, covers, and other objects essential for the production of electric or mechanical motors. However, remember that plastic is a recyclable product and, if properly treated, reusable several times. It will certainly be necessary to strengthen the circular economy chain by identifying more effective systems to improve the recycling of these types of plastics.
Secondly, we have disposable products, mainly used in the world of packaging where it is illogical to use a highly durable material such as plastic for a limited end use. And it is therefore the packaging sector that European tax policies are addressing, a sector that, according to CONAI data (data from the Economic Packaging Conference of June 2019), will, despite everything, be growing in the coming years. One of the few sectors growing in the COVID-19 period is food, the largest user of packaging. However, the packaging industry is in great excitement, looking for new recyclable/compostable raw materials to be used in the various production chains.
The introduction of a new tax increases the advantages in finding alternative solutions, thus stimulating Research. It has already happened in the past with the increase in the cost of petrol at the pump.
So what could be the approach towards plastics?
A first indication comes from the consideration that compostable products, in which the plastic component is less than 40%, are excluded from the new taxes. In this regard, there is a standard that defines compostable products (EN standard 13432).
It is interesting that the finished product may contain up to 40% of plastic for it to be considered excluded from taxation. In practice, the legislator is talking about so-called composite materials (which must also be compostable) among which we find WPCs (Wood Plastic Composite or Wood Composite). If you want more information, we have already talked about these materials in an article from May 2019 - Circular economy, post-consumer materials, composite materials, and WPCs.
For years now, La.So.Le.Est SpA has undertaken a research path with leading Italian (Udine, Padua, Pisa) and Foreign (Jerusalem) universities for the development of new materials.
However, there is still a problem to be solved: the fact that plastic and wood flours are basically incompatible with each other, like oil and water. Generally, the two materials are mixed together and then treated with other chemical elements to improve the solution. However, the chemical bond is not so stable and the industrial use is reduced to a few types of products.
In reality, we are already developing new test systems to find a solution to the problem, starting from a different approach that will lead to the development of new materials with physical-mechanical characteristics with still unknown applications.
Perhaps we are faced with an example (hopefully successful) in which the tax lever helps research, making some productions more convenient.