Plastic recycled in the UK could supply nearly three-quarters of domestic demand for products and packaging if the government took action to build the industry, a new report said on Thursday.

The UK consumes 3.3m tonnes of plastic annually, the report says, but exports two-thirds to be recycled. It is only able to recycle 9% domestically.

Measures including increased taxes on products made with virgin plastic, and mandatory targets for using recycled plastic in packaging, could encourage an additional 2m tonnes of plastic to be recycled in the UK, the report from Green Alliance said.

The analysis said simply collecting plastic and sending it abroad for recycling does not solve the problem of the global scourge of plastic pollution.

“The UK does not have an adequate system to capture, recycle and re-use plastic materials,” the report said.

It recommends three new measures to ensure more plastic is recovered in the UK and used as raw material in manufacturing. These are:

Mandatory recycled content requirements for all plastic products and packaging;

Short-term support to kickstart the plastic reprocessing market; and

a fund to stabilise the market for companies investing in recycling plastic domestically.

Green Alliance produced the report for a group of businesses that have formed a circular economy taskforce.

Peter Maddox, director of Wrap UK, said the UK had to take more responsibility for its own waste.

“Our mission is to create a world where resources are used sustainably. To make this happen in the UK, we need to design circular systems for plastics and other materials that are sustainable both economically and environmentally. This will require some fundamental changes from all of us.”

The report said government action is necessary to create and support a secondary plastic market in the UK. “The government is uniquely placed to address the market failures that have led to unnecessary reliance on virgin materials to the detriment of the environment, industry and the economy.”

UK businesses including supermarkets recently signed up to a pact to cut plastic.

But voluntary pacts were not enough, the report said, and government action was needed.

“A secondary plastic market ... could recycle an additional 2m tonnes in the UK and fulfil 71% of UK manufacturing’s raw material demand ... Voluntary initiatives like the UK plastic pact ... only thrive when supported by a credible prospect of government regulation if industry does not deliver.”