The implementation of Extended Producer Responsibility (EPR) for consumer packaging is imminent, see what it involves, how it works, and why obligated businesses must begin preparing now.
What is Extended Producer Responsibility (EPR)?
The current producer responsibility system for packaging has operated since 1997, but it has never covered the full cost of the disposal and recycling of packaging waste. A key part of the Government’s 2018 Resource and Waste Strategy (RWS) - Extended Producer Responsibility (EPR), is set to be implemented in 2024. EPR seeks to move the full cost of the disposal of household packaging waste away from local authorities to the packaging producers themselves, giving the producers complete responsibility for the costs of the packaging that they place on the market. It will do this through a system of payments from the producers to local authorities, with the amount paid being modulated according to the recyclability of the packaging.
EPR is increasingly recognised worldwide as an efficient waste management policy to help improve recycling and reduce the landfilling of products and materials. WWF has identified EPR as an effective and critical policy tool to address the growing Global Plastic Pollution*. The incentive behind EPR is to motivate producers to make better, more sustainable decisions at the design stage, more notably decisions that make it easier for the packaging to be re-used or recycled at their end of life. In addition, producers under an EPR scheme are incentivised to maximise the material benefits from the products throughout the value chain, ensuring they get the most from the raw material with the least waste possible.
The Cost of Packaging
Under the current PRN system, producers are obligated to pay around £200-300m a year. With EPR, it is estimated that these producer costs will rise, equating to approximately £1.7bn, down from the initially proposed £2.7bn when the guidelines covered both household and business waste.
Of the £1.7bn, around £1.2bn arises from managing household waste (which currently falls on taxpayers). This compromises of £800m in household packaging recycling and household waste recycling centre costs, £300m in household packaging residual costs, and £100m in managing packaging in street bins. Despite the significant increase in the cost added to the producers’ bill, EPR has been welcomed by key figures in the food and drink industry over mounting pressure due to the climate crisis.*
Key Components of EPR
Since the second consultation on EPR held in Spring 2021, multiple key aspects have been targeted and will prove to be the most substantial parts of the new guidelines and incoming legislation. Whilst this article covers the initial details of EPR, see our second article relating to the Legislation of EPR.
- Focus on household packaging: Initially, EPR would have made producers liable for both household and business waste, The new guidelines will only apply to household packaging waste, defined as primary or sales packaging. Business packaging waste, defined as commercially or industrially generated packaging will only be captured in the current interim PRN/PERN system.
- Full Net Cost Recovery: The total cost of collection, sorting, recycling, and disposal of the household packaging will be paid for by the producers, rather than a contribution that is currently paid. The current contribution system accounts for the producers to cover anywhere between 10% and 30% of the total costs.
- Modulated Fees: From 2025, producers will pay the fees based on the environmental & recycling attributes of their packaging, meaning the more recyclable and eco-friendlier the material is, the less they will have to pay.
- Mandatory Takeback Scheme: To increase recycling efforts of fibre-based composite cups, large businesses must now provide a point of collection and arrange recycling methods for the cups they sell.
- Deposit Return Scheme: To increase recycling efforts for plastic and aluminium drink, a deposit will be paid when purchasing the container, but can be returned in exchange for the deposit at a designated returns point or reverse vending machine.
- Mandatory Labelling: DEFRA has agreed to the use of the Recycle Now mark on all packaging and means that producers will be required to label their packaging using this sign, enabling a single clear approach across the UK.
Who is Affected?
Packaging manufacturers, brand owners, importers, distributors, online marketplaces, and service providers are all different types of obligated producers that will be targeted by these new EPR guidelines.
DEFRA has outlined action if all the following apply:
- You’re an individual business, subsidiary, or group (but not a charity)
- You have an annual turnover of £1 million or more (based on your most recent annual account)
- You’re responsible for over 25 tonnes of packaging in a calendar year (January to December)
In addition, if you carry out any of the packaging activities listed:
- Packaging own-brand products to sell to UK consumers
- Using a third party to package and sell own-brand goods to UK consumers
- Using ‘transit packaging’ to protect goods during transport
- Importing own-brand and third-party packaged products into the UK to sell to consumers
- Allowing third parties based outside the UK to sell packaged products or empty packaging through an online marketplace that you own
- Hiring or loaning out reusable packaging to UK third parties
- Making and then selling empty packaging to third-party organisations that do not need to act under the regulations
What will Obligated Producers need to do?
To simplify, under the new regulations, producers will be expected to collect and submit data reports on the consumer packaging they manufacture, handle, and supply. Addtionally, they must pay waste management fees, and continue to buy the interim packaging waste recycling notes (PRNs), but only for business packaging waste.
The data reports will be handled by a public body Scheme Administrator (SA) that is yet to be set up, who will bridge the relationship between the producers and local authorities. This reporting process will occur twice a year, in April and October and must include data on:
- Individual materials in the packaging you handle and supply
- Materials used in the your ‘Primary’, ‘Secondary’ and ‘Transit’ packaging
- Packaging likely to become household or non-household waste
- Packaging likely to end up in street litter or recycling bins
Primary Packaging is the individual container that stores goods in so they can be sold to consumers, such as plastic wrappings or steel tins. Secondary Packaging is for grouping several units together for the purpose of sale. Lastly, Transit Packaging is for shipping, including cardboards.
Types of Packaging to be Reported
When collecting data, weight and material type must also be supplied, with the weight being recorded to the nearest tonne (1,000kg). Material data should be categorised by the following types:
- Paper & Cardboard
When does it come into effect?
The new legislation was due to come into complete effect in 2023, but DEFRA has now announced and outlined a phased approach to rolling out the guidelines starting in 2024 but is expected to be fully in force by 2025. But there is still an imperative to act now, as of the 1st January 2023, affected producers must take steps to collect the correct packaging data and be expected to submit their findings for packaging sold across the first half of 2023. Organisations will have the ability to register for the EPR online packaging service from April 2023.
For more information on this subject, visit the UK Government website to see how UK Organisations can prepare for EPR.
Notes: For more information on the reforms to the PRN/PERN system, please visit DEFRA's consultation on reforms to the Packaging Waste Recycling Note system.