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Proposed Plastic Bag Levy - Extended Impact Assessment: Volume 1: Main Report



1. Hidden costs cover the purchase, transport and storage of bags by a retailer, normally passed on to consumers through the price of goods.

2. Some stores in independent initiatives already charge for their lightweight carrier bags.

3. Throughout this report, the term 'lightweight' plastic carrier is used to describe 'disposable' plastic carrier bags available at the checkout as opposed to reusable bags such as 'bags for life'. Bags will vary in size depending upon products purchased. We understand, and have taken into account, the fact that lightweight plastic carrier bags are often reused for a second purpose.

4. For example, Lidl and B&Q (see Appendix 2).

5. Correct chemical name is polypropene.

6. Biodegradable bags can be properly classified by how they decompose (either by microbes or through heat, ultraviolet light and water) and by the material they are made from (e.g. natural starch sources such as maize or wheat, or synthetic polymers from oil). Blended materials are also available, e.g. starch with HDPE or polyester [ RMIT].

7. Also copper, nickel, cobalt and cerium as well as photoactive compounds such as ferrocene.

8. Oxo-biodegradable plastic bags produced by Symphony Plastic Technologies plc.

9. Approximately 90% of plastic carrier bags used in the UK are imported from the Far East/China [ CBC, Pringle].

10. It is a statutory requirement under the Food Safety (General Food Hygiene) Regulations 1995 SI 1763 that meats are packed appropriately before supply to the customer.

11. Range of 1.84-6.08% for 2002/03 [ SEPA]

12. Scottish local authorities collected a total of 3,345,458 tonnes of controlled waste (household, commercial and industrial) for disposal or recycling in 2002/03 [ SEPA].

13. The Keep Britain Tidy Group

14. Calculated using population scaling on the upper and lower UK bag consumption figures: 8.6% of 8 billion equals 690 million bags, while 8.6% of 10 billion equals 860 million. The average of these two numbers is 775 million.

15. Waitrose quoted as 1-2%; J Sainsbury's at 0.3%.

16. Paper bags are normally used in the non-food retail sector for clothing, shoes, etc.

17. From consultation with BRC.

18. It is assumed that 30% of the total reduction in the use of lightweight plastic and paper carrier bags is transferred to 'no bag', as adopted for a 15 cent levy in the Australian report [ DEH]. The remaining 70% reduction is assumed to be split between paper carrier bags and heavyweight plastic carrier bags. Using information from the UK Expenditure and Food Survey 2002/03 [ ONS], we calculated expenditure likely to require a carrier bag and then split it according to (a) those retail categories (e.g. footwear, clothing, etc.) thought most likely to accommodate a switch to paper carrier bags (as seen in the Republic of Ireland) and (b) those retail categories (e.g. food, beverages, etc.) most likely to accommodate a switch to heavyweight plastic carrier bags. On this basis, 36% of total household expenditure is sourced from (a) and 64% from (b). It has therefore been assumed that 25% is transferred to paper carrier bags (i.e. 36% 70% = 25%) and 45% is transferred to heavyweight plastic carrier bags (i.e. 64% 70% = 45%).

19. It is assumed that, of those consumers who transferred to paper bags under Scenarios 1A and 1B, half now transfer to heavyweight plastic bags and half transfer to 'no bag'. We made this assumption because no other suitable evidence was available. Thus, the total proportion of the reduction in lightweight carrier bags now transferred to heavyweight bags is equal to 57.5% (i.e. 45% + (50% 25%)).

20. Taken from the Carrefour study [Carrefour].

21. This is based on share of turnover in SIC(92)52, i.e. the retail trade with less than 250 employees, as determined by the Institute of Retail Studies, University of Stirling. Hence, in scenarios 1B and 2B, the levy is assumed to apply to 70% of the retail base in scenarios 1A and 2A. By adjusting the retail base in this fashion, it has been assumed that a £1 expenditure equals a £1 turnover and that the number of bags issued per £ expenditure at a SME equals the number of bags issued per £ expenditure at a non- SME. This is a crude assumption, but necessary without any data available.

22. Scaled for population [ CSO.ie2005, Stats Scot]

23. Numbers calculated as described in Section 4.3.

24. Example calculations. For lightweight carrier bags under scenario 1B: (30% 775) + (70% 10% 775) = 287. For heavyweight carrier bags under scenario 2A: 8 + [(775 -78) 58% 5%] + [(39 - 4) 70% 5%] = 29

25. 88.2% was landfilled in 2002/03. Only 2.2% was incinerated, 5.9% was recycled, 2% was composted and the remaining 1.7% was treated by other means [ SEPA].

26. From Table 18 in the Carrefour study. Numbers greater than one indicate a greater environmental impact compared with lightweight plastic carrier bags and numbers less than one indicate a lesser environmental impact .

27. The Carrefour study used the terms 'strong', 'medium-weak' and 'weak' to describe the risk of littering for each of the bags. We interpreted these terms numerically as 1.0, 0.4 and 0.2, respectively, in order to be able to show graphically how the risk of littering may change under the different levy scenarios.

28. As noted in Appendix 3, the scores against these environmental indicators reflect potential risk than actual harm. Some indicators such as eutrophication are very site-specific in terms of actual impact, depending on the level of wastewater treatment employed and the state of the receiving environment. Others (e.g. climate change impacts from greenhouse gas emissions) are not site-specific.

29. For comparison, the Australian study assumed that reusable 'bags for life' are reused around 52 times before being recycled, i.e. once a week in a given year [Nolan- ITU].

30. On average, bin liners weigh 15g each and lightweight plastic carrier bags 8g each. Thus, the environmental impacts of a bin liner were assumed to be 1.9 (=15/8) times greater than a lightweight plastic bag, giving an approximate ratio of 2:1. We have used this ratio throughout our analysis.

31. Information provided by the CBC showed that there are three kinds of paper bags in general used in Scotland, depending on size and whether they have handles or not. These weigh 51g (checkout bag, no handles), 81g (carrier bag with handles) and 166g (carrier bag with handles). The arithmetic mean of these is 99g.

32. This analysis suggests some potential for an increase in solid waste generation for scenarios that favour a switch to paper bags. This is due to different assumptions about the relative weight of plastic and paper bags, and the fact that the LCA looks at solid waste impacts throughout the bag life cycle rather than just the end-of-life disposal phase.

33. Most recent published data (2002/03) .

34. Data from CBC and SRC. For paper bags the checkout bag weighing 51g was used for consistency with the LCA base case. If the average weight of 99g, see footnote , was used then the waste implications would be greater.

35. As stated earlier, data on black refuse sacks and disposable nappy sacks were not available. If these figures were included, the net decrease in resource consumption would be less.

36. We assessed the categories within the survey and made a judgement on whether a carrier bag might be required for purchases, e.g. insurance and holidays would not, but household goods and hardware would.

37. In reality it is more likely that a £ spent by a lower income household buys more goods and this requires more bags than a £ spent by higher income households, since the price paid per unit by the latter will be higher. Sufficiently detailed data were not available however to accommodate this complexity.

38. Except in some stores such B&Q and Lidl (see Appendix 2).

39. Derived from data provided by the CBC and survey data reported by researchers from University College Dublin [ UCD]. The average cost of lightweight carrier bags to the retailer is £7.47 per 1,000 excluding storage and transport [ CBC].

40. Derived from data provided by the CBC and survey data reported by researchers from UCD. The average cost of paper bags to the retailer is £163.33 per 1,000 [ CBC]. The switch to paper bags is largely assumed to be by the clothing and shoe retailers.

41. It is recognised that shoppers will have a wide range of options with an equally wide range of unit costs (e.g. currently from £0.10 for a 'bag for life' to £2.00 for an unbleached cotton carrier bag purchased privately). CBC suggested a range from 65p to £1.50; we used the lower figure. In addition, only those bags sold for more than â'¬0.70 (approximately £0.48) are excluded from the levy in Republic of Ireland.

42. Based on share of turnover in SIC(92) 52 retail trade with less than 250 employees determined by the Institute of Retail Studies, University of Stirling. Hence, in scenarios 1B and 2B, the levy is assumed to apply to 70% of the tax base in scenarios 1A and 2A. By adjusting the tax base in this fashion, it has been assumed that: a £ expenditure = a £ turnover and the number of bags issued per £ expenditure at a SME = the number of bags issued per £ expenditure at a non- SME. This is a crude assumption, but necessary without any data to the contrary.

43. HM Revenue and Customs levy VAT on environmental taxes such as the climate change levy, the aggregates levy, the landfill tax and the oil duties. It is expected that the proposed carrier bags levy would likewise be subject to VAT.

44. www.smithanderson.com

45. SEPA informed us that recycling rates for 2003/04 were 12.3% nationwide (data to be published in June 2005). However, 2002/03 SEPA statistics were used for consistency.

46. Plastic films are recycled in large amounts, though this is mainly back-of-store packaging, estimated at 300,000 tonnes per year [ CBC]. There is very little post-consumer recycling of plastic carrier bags and there are very few facilities to do so. For example, the recycling rate for lightweight carrier bags in Australia in 2002 was 2.7% [ DEH].

47. Step 1: 88.2% (landfilled) + 2.2% (incinerated) = 90.4%. Step 2: 88.2% / 90.4% = 97.6%

48. The facility is known to exist in many food retail outlets for the take-back and recycling of heavyweight bags-for-life, but no data on the level or rate of this was available.

49. Recycling of paper bags was not considered for the LCA in Section 4 due to the assumptions in the Carrefour study. This will lead to a difference in the results presented here with those in section 4 under the 'solid waste' environmental indicator.

50. 13.3% of paper is recycled. This leaves 86.7% going to another route. 97.6% will be landfilled: 97.6 % 86.7% = 84.6% overall. 2.4% will be incinerated: 2.4% 86.7% = 2.1 % overall.

51. Figures have been rounded.

52. Savings based on landfill costs of £55/tonne and incineration costs of £65/tonne. The unit costs include collection, transfer and gate fees (including landfill tax in the case of landfill). However, it has not been possible to separate the fixed from the variable elements of the costs. Given the relatively small scale of the changes in waste tonnages, only the latter will be saved. The cost savings will therefore tend to be overestimates. However, landfill costs are likely to rise during the same period as a result of the landfill tax escalator.

53. Response by the Association of Charity Shops to consultation paper issued by Mike Pringle MSP.

54. An accountable person is responsible for submitting the required information to the Revenue Commissioners.

55. Total number of retailers in the all-Scotland Valuation Roll from April 2005. There were 52,690 properties classified by the assessors as 'shops'.

56. Assumes full payment of the levy.

57. The timescale for set-up is unknown.

58. As in Republic of Ireland (see Section 2.2).

59. In our calculations, however, we assumed that every individual across Scotland is essentially identical in terms of bag-using behaviour. In addition, the amount of revenue raised by a local authority will be a function of, among other things, the age profile and socio-economic characteristics of its population (and in turn their behaviour as consumers), and not just its total population. Furthermore this ignores the impact of consumers making purchases at outlets not located in the local authority in which they reside.

60. These estimates do not take into account any increased demand for refuse sacks, as we were unable to source data on current sales levels or the likely increase in demand.