US Senator introduces bill with 10-cent tax on virgin plastic

Author: Janet Miranda

2021/08/13

HOUSTON (ICIS)--A US Senate bill to put a 10 cent/lb tax on virgin plastic resin in 2022 is currently in committee, after it was introduced by Senator Sheldon Whitehouse, a Democrat from Rhode Island, under the REDUCE Act.

The Rewarding Efforts to Decrease Unrecycled Contaminants in Ecosystems (REDUCE) Act, also known as S.2645, will apply to virgin plastic used to make single-use products, including plastic packaging, beverage containers, bags and food service products. Exported virgin plastic and post-consumer recycled resin would be exempt.

The fee would apply to plastic makers, producers, or importers of more than 10 tons.

The following table shows the proposed tax on virgin plastic per pound from 2022-2024.

Year Tax per lb
2022 10 cents
2023 15 cents
2024 20 cents

The bill also provides rebates for certain products such as companies that make medical products, containers or packaging for medicines and personal hygiene products.

Virgin plastic used to make non-single-use products would also qualify for this rebate.

The revenue from these fees will go into the creation of a Plastic Waste Reduction Fund, according to the bill’s text.

Funds will be used to implement initiatives that reduce plastic waste and improve recycling rates.

The bill stipulates improvements to recycling infrastructure, marine debris reduction, detection, monitoring, and clean-up activities to address pollution and manage impacts from the production of plastic.

The fund would also support grant programmes established under the Save Our Seas 2.0 Act and the Marine Debris Act.

Importers will also be subject to the levy and will have to furnish information to determine the tax fee, but if they refuse to provide this information, they will be taxed at 10% of the appraised value of the item.

In a statement, the American Chemistry Council (ACC) opposed the bill, saying that the US needs comprehensive public policies that will lead to a circular economy instead of the proposed bill.

“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 ACC vice president, plastics Joshua Baca.

“Such a scheme would essentially punish producers of valuable American products without advancing a circular economy for plastics,” he added.

The bipartisan infrastructure bill, which passed the US Senate on Tuesday, also has a provision that would reinstate superfund taxes on 42 chemicals. The reinstatement of taxes on chemical producers would be set at twice the rate when superfund taxes expired in 1995 and are projected to amount to $13bn.

“It’s not time to pile on even more taxes and further fuel inflation,” Baca said.

Last month, the ACC released its five-point action plan to grow the circular economy and bolster the American regulatory system to enable the rapid scaling of chemical recycling.

It called for at least 30% recycled plastic by 2030 through a national recycled plastic standard, and the establishment of a national extended producer responsibility  system.