Plastic Tax: A Climate Change Solution Thai Businesses Must Prepare For

     As the trend of the Green Economy takes on a more significant role in the current era and is crucial to environmental policies that will impact Thailand's trade, measures such as the Plastic Tax or Plastic Packaging Tax (PPT) are being used to address Climate Change issues.

     The measure of collecting plastic tax is an issue that Thai businesses must consider, as it will become a rising cost in trade due to several trading partner countries starting to enforce such a tax. This will involve levying fees or charges on producers, importers, or member countries that manufacture, import, or use single-use and hard-to-degrade plastic products or packaging, excluding recycled plastic packaging.

Currently, some countries have implemented and are preparing to implement plastic taxes:

1. The European Union has enforced this since January 1, 2021, requiring member countries to pay taxes to the EU, calculated based on the quantity of single-use plastic packaging at a rate of 0.8 euros per kilogram.
2. Italy and Spain levy a plastic tax on producers, sellers, buyers, suppliers, and importers at a rate of 0.45 euros per kilogram.
3. The United Kingdom collects plastic packaging tax from producers and importers of plastic packaging that contains less than 30% recycled plastic at a rate of 200 pounds per ton, enforced since April 1, 2022.
4. Portugal is preparing to levy a plastic tax at a rate of 0.30 euros per kilogram within 2023.

Countries that are preparing to levy plastic taxes include:

1. The United States, Thailand's top plastic product export market, is currently drafting the Reduce Act of 2021, which will tax non-recycled plastic and single-use plastic packaging at a rate of $0.2 – $0.5 per pound.
2. The Philippines is preparing to tax producers and importers of single-use plastic at a rate of 100 Philippine pesos per kilogram or approximately $1.75, expected within 2026.

     As for Thailand, data from the Office of Trade Policy and Strategy (OTPS) indicates that in 2021, the total value of exported plastic products to global markets was 140,772.17 billion baht or 2.07% of total exports. For the first 11 months of 2022, the export value of plastic products was 146,580.53 billion baht, an increase of 14.09% from the same period in the previous year.

Thailand's top five export markets are:

• The United States with a 19.26% share
• Japan with a 16.74% share
• Vietnam with a 5.69% share
• The Philippines with a 4.94% share
• China with a 4.75% share

Data updated on  April, 21, 2023
Source: National Science and Technology Development Agency (NSTDA)
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