SAP Responsible Design and Production Helps Companies Manage Plastic Taxes in a Fragmented Environment - Seite 2

Last April, the government in the UK introduced the first plastic packaging tax (UK PPT) to be implemented globally. The UK tax is £200 per metric ton of plastic packaging either produced in or imported into the UK that does not contain at least 30% recycled plastic. Like their European counterparts, UK companies face two key challenges: getting the data to prepare their tax return and processing it to make tax decisions.

A Practical Solution

As has been the case with many challenges in recent times, technology has become a fundamental element in helping companies resolve their issues. SAP Responsible Design and Production is a cloud solution created specifically to facilitate the design of products for a circular economy and to help address the entire process involved in the new taxes.

Besides working to simplify manual reporting processes through automation, SAP Responsible Design and Production allows companies to access data on logistics and materials, including details on the composition of packaging. "With this tool, companies will be able to calculate and submit reports in relation to the Spanish tax on plastics and reduce the risks of non-compliance," says Monasor.

The Ultimate Goal

In the long run, SAP Responsible Design and Production can enable organizations to increase their sustainability KPI measurement and management capabilities as well as gain better visibility into material flows across all business processes. Improved traceability helps increase the accuracy of plastic tax payments and mitigates compliance risks. The solution can also implement changes to regulations and taxes and optimize the choice of materials for packaging to help reduce those taxes and boost circularity, which is the ultimate goal of the tax.

Despite all efforts to date, about 90% of the plastic currently produced worldwide is not recycled. "The EU plastic tax and the UK PPT are harbingers of the worldwide movement reinforcing the polluter pays principle alongside extended producer responsibility," says Stephen Jamieson, global head of Circular Economy Solutions at SAP.

By disincentivizing the use of unsustainable materials, governments are incentivizing the market value of recyclable plastic, fostering a sustainable circular economy that will have global repercussions. Estimates indicated that plastic tax contributions would provide the EU with approximately €7 billion of additional revenue each year.