- The UK Government is implementing a new tax regime in April 2022 that will create a $1.2 billion compliance opportunity to manage plastic waste
- Professional services firms, law firms and consultancies are rapidly gearing up to take advantage of this government-mandated opportunity
- Security Matters (SMX) is the only potential player with the technology and industry relationships to shape this emerging opportunity
- The tech has been endorsed through partnerships with some of the largest global players in the plastics industry
ASX-listed Security Matters (SMX) is uniquely positioned in the United Kingdom as a key tech enabler and integrated service platform to help businesses comply with the major upcoming Plastic Packaging Tax (PPT) in the country.
A growing focus on environmental, social and governance (ESG) rules, clean energy, and recycling across the UK has seen the country’s government introduce a tax on plastic packaging made up of less than 30 per cent recycled plastic.
All businesses that import or manufacture plastic packaging or products will need to register for the tax, which launched at the start of April.
Costs will add up quickly for companies not in compliance with the new tax laws, meaning there is a major need across the UK for new systems and technologies to not only help companies understand how each segment of a business might be impacted by the tax but to also offer a solution to bring companies into compliance with the new laws.
Security Matters (SMX) is working with some important sector partners to evolve from a simple tech supplier to an integrated service platform for any company needing to monitor, track, and reduce its use of non-recycled plastic.
How important is the new tax?
The new PPT will be a major driver of a reduction in plastic waste across the UK — largely because there is a significant amount of money on the line for companies not in compliance with the regulations.
According to the British Plastics Federation, the UK plastics industry processes around 3.3 million tonnes of plastic materials each year.
The PPT will apply at a rate of £200 (A$363) per tonne on plastic packaging with less than 30 per cent recycled plastic either manufactured in or imported into the UK.
This means the cost of not complying could amount to an aggregate of £660 million (A$1.2 billion) each year.
It’s no surprise, then, that some of the largest consultancy firms in the country are working hard to help businesses ensure they meet the new plastic requirements.
PricewaterhouseCoopers (PwC), for example, has launched a dedicated consultation service designed to help businesses implement new systems and technologies to comply with the PPT.
London-based international law firm Pinsent Masons has offered a similar service.
Security Matters, however, is in a unique position given it has both the expertise and the technology platform to offer an integrated circular solution for all aspects of the PPT.
The SMX Solution
At its core, Security Matters’ technology is based on a molecular marker system that digitises physical objects onto a blockchain-based platform.
The tech is designed to “mark” an object digitally and link it to an online system for verification. Importantly, the material maintains its scannability even if the object is transformed into something else.
For the plastics industry, this means a piece of plastic can be marked with the SMX technology, then recycled and used to create a completely different object, and the marked plastic will maintain its scannability.
By doing this, companies can seamlessly and accurately track the life of any piece of plastic, ensuring the materials it uses have been recycled.
“SMX’s ability to assist companies in being able to identify and report on its recycled content used in plastic packaging in the UK is revolutionary and economical,” Security Matters Founder and CEO Haggai Alon said.
“It is SMX’s belief that by implementing our technology, the tax will be avoided through automated systems implemented to ensure there is minimal impact on staff costs.”
What’s more, the Security Matters tech has been validated by some important partnerships in the plastics industry.
According to SMX, multi-billion-dollar multinational base chemical manufacturers have offered their experience in plastic additives, regulatory know-how, and understanding of the plastics value chain to expand the technology further.
A new direction for SMX
The endorsement of its technology by some of the biggest global players in the plastics recycling and production industry, alongside the plastic production tax in the UK, has presented an opportunity for SMX to evolve its business from tech supply to circular platform solutions.
Through the Security Matters technology, companies have access to transparent and accurate reporting and auditing, immediate compliance with PPT requirements, production management to avoid additional taxes, and better positioning with customers.
Companies want to avoid the new PPT, and they want to make sure the cost of avoiding this tax does not end up amounting to more than the tax itself.
To do this, they need consulting services. They need new technology. They need quick and accurate reporting and auditing processes.
Security Matters offers all this under one roof. The company has an important role to play as the global demand for healthy ESG practices rises.