Extended Producer Responsibility

EPR is set for phased implementation from 2024 and will affect producers across the packaging chain - are you prepared?

What is Extended Producer Responsibility (EPR) for packaging?

Extended Producer Responsibility (EPR) is a policy tool which requires producers to be responsible for the packaging they place on the UK market at the end of its life. It is in line with the 'polluter pays' principle which states those who produce pollution should bear the costs of managing it to prevent damage to human health or the environment. Under EPR proposals packaging producers will be made responsible for the full net cost of managing the packaging they place on the market.

The UK Government first announced their intention to introduce EPR for packaging in the Resources and Waste Strategy published in 2018 and have since published several consultations. The new EPR system will replace the current Packaging Waste Regulations with a phased implementation from 2024.

The PRN/PERN system will remain as an interim solution to demonstrate recycling obligations have been met. A new fee will be introduced (in addition to PRN/PERNs) for payments to local authorities and councils (local councils in Northern Ireland) for collection of household packaging waste, and on the go packaging disposed of in street bins. A modulated fee structure will be introduced from 2025 offering financial incentive to encourage sustainable packaging design to reduce EPR costs.

Who will be obligated under EPR?

If you are a producer first placing packaging on the UK market, whether UK sourced or imported, it is likely you will be affected by EPR. Proposals state a move from the current shared responsibility approach to a ‘single point of compliance’ whereby just one business in the packaging chain is responsible for all costs. It is proposed that brand owners (the person who puts their own branded products into the packaging) and importers of empty packaging or prepacked goods will become the obligated producers responsible for the whole cost.

In addition, businesses selling goods in the UK, including Distributors, Retailers, Online Marketplaces, and Sellers will be required to report separately the volumes and material types of packaging they place on the market, in some cases broken down into the four nations of the United Kingdom (England, Wales, Scotland and Northern Ireland).

Under the current Packaging Waste Regulations a producer must meet the combined threshold of a turnover over £2 million and over 50 tonnes of packaging handled – this will remain the threshold under EPR legislation. There will also be a new threshold introduced of £1m turnover and 25t of packaging handled which will obligate smaller producers to report packaging data. If you meet either of these thresholds our team can help you understand what EPR means for your business - contact us today.

Our team is helping producers prepare for EPR, for more information and to understand exactly how we can help you...

 

What is full net cost recovery?

Full net cost recovery seeks to make obligated producers responsible for the entire cost of recycling the packaging they place on the market; this includes the cost of collection, treatment and recycling. Producers will be required to pay the costs of dealing with packaging waste that arises with the householder and on the go packaging disposed of in street bins.

This is a fundamental step change away from the existing Packaging Waste Regulations, which requires obligated producers to pay towards ensuring there is enough capacity to meet the recycling targets. Under full net cost recovery obligated producers will see a significant rise in their compliance cost. It is envisioned that the cost of compliance will rise from approximately £350 million to £1.7 billion under the proposed EPR system.

What are modulated fees?

A modulated fee system will be introduced from 2025 to provide discounts depending on the environmental impact of the packaging placed on the market. Packaging that can be easily recycled will attract lower EPR fees compared to hard to recycle packaging. This will therefore provide financial incentive for producers to use more sustainable materials in their packaging.

Government will confirm the structure of modulated fees following the consultation process once key decisions are finalised. Nevertheless, it is clear that less sustainable and hard to recycle materials will incur higher costs, whereas sustainable packaging which is easily recyclable will be rewarded with lower fees.

Next Steps

The Government released the second round consultation for EPR in March 2021. The response was published in March 2022, alongside a new consultation in light of Government decisions to retain the PRN/PERN system as an interim solution. Find out more here.

Full details including the methodology and framework producers will be required to follow are not yet fully known, however we would advise you to start preparing where possible to ensure your business is ready for the impacts of the EPR reform. Our team are here to help members every step of the way, get in touch today.