On 26 March 2022, the UK Government and the devolved administrations published their joint response to a 2021 consultation on proposals for an Extended Producer Responsibility (“EPR”) regime for packaging.
EPR for packaging from households will be implemented so that the full cost of dealing with packaging waste will lie with packaging producers. The EPR regime will be implemented in a phased manner from 2024 in order encourage producers to reduce the amount of packaging used and to make packaging more recyclable.
The EPR regime timeline
The Government will develop a single UK-wide statutory instrument detailing the EPR regime for packaging over the course of 2022. It will be laid before Parliament in Spring 2023 and it is expected that the regulations will come into force in Summer 2024. To ensure that EPR can be implemented from 2024, the Government will also develop a separate Data Reporting statutory instrument that will come into force on 1 January 2023. This will be subsequently repealed by the EPR statutory instrument, which will contain identical provisions applying to data reporting from 2024.
The proposed EPR packaging regime
The most important aspects to be adopted in the coming years are set out below. Unless otherwise specified, the measures will apply across the whole of the UK.
Producers to pay the costs of managing household packaging waste
The Government will require packaging producers to pay for all of the “necessary costs”, involved in the collection and management of packaging waste produced by households through effective and efficient services. The costs in scope must be necessary in collecting, managing, recycling and disposing of household packaging and connected to the delivery of efficient and effective systems. Any costs incurred by a local authority (“LA”) that are deemed to be considered unnecessary or unreasonable in delivering services in an efficient and effective way will not be chargeable. This will depend on the circumstances in which that cost has arisen.
Producers will be required to pay disposal fees quarterly from April to March based on the packaging they placed on the market in the previous calendar year.
- Payment to local authorities and councils for collection of household packaging waste
The EPR scheme administrator (the “SA”) will be required to distribute payments to LAs for the full net disposal costs of providing efficient and effective systems for managing household packaging waste and to demonstrate how these costs reflect local circumstances and policy outcomes in each devolved administration of the UK.
- Payment for managing packaging waste arising from businesses
The Government has decided to adopt an interim solution for managing packaging waste arising from businesses. Essentially, the current system – under which packaging producers purchase PRNs and PERNs to demonstrate recycling obligations have been met for the packaging they have placed on the market – will be maintained for the time being.
- Modulated fees to incentivise the use of recyclable packaging
Fees will be modulated from 2025 based on recyclability assessments for packaging reported from October 2024. They are intended to incentivise producers to make more sustainable decisions when designing or purchasing packaging. Where possible, the SA will give obligated producers a long-term (3-5 years) view of modulated fee costs in advance of the start of the scheme, to allow them time to prepare and make decisions on product pricing and packaging use.
- Litter payments
The Scottish and Welsh Governments have signalled that they will pass the costs of clearing littered packaging from the ground onto producers. Both administrations will set out their intentions in due course.
- Mandatory takeback scheme for the collection and recycling of fibre-based composite cups (i.e. disposable coffee cups)
The Government will introduce a mandatory takeback requirement for fibre-based composite cups. Sellers of filled fibre-based composite cups that employ 10 or more FTEs will be required to provide a dedicated bin for the separate collection of cups in 2024 and report to regulators the tonnage they have placed on the market and the tonnage they have collected and sent for recycling. Where a business joins a takeback scheme, this information can be reported through the takeback scheme to the regulator.
- Mandatory labelling of packaging of recyclability
All packaging except for plastic films and flexibles will need to be labelled with ‘recycle’ or ‘do not recycle’ by 31 March 2026. Plastic films and flexibles will need to be labelled with ‘recycle’ or ‘do not recycle’ by 31 March 2027. Until the infrastructure and evidence base can be improved, compostable and biodegradable packaging must have the ‘do not recycle’ label applied.
The Office for Product Safety and Standards will be the enforcement body responsible for the monitoring and enforcement of the labelling requirements.
- Annual packaging waste recycling targets to 2030
Under the new EPR regime, annual targets for the six packaging materials (plastic, paper/card, steel, aluminium, glass and wood) will be set for each year from 2024 to 2030. Producers will need to evidence that they have met their recycling obligations by acquiring packaging waste recovery notes as under the current arrangements. The existing targets and the new targets are set out below.
The Government has not proposed recycling targets for wood packaging at this stage. It will undertake further work with the wood sector to explore options for adopting re-use obligations rather than recycling targets for wooden pallets. The Government will also set recycling targets for fibre-based composite packaging to apply from 2026.
- Reporting requirements
Producers will need to report detailed data on packaging, (i) the amount and type(s) of packaging they have placed on the market to calculate recycling obligations and disposal cost fees and (ii) details to inform the assessment of its recyclability and to enable disposal cost fees to be modulated, as well as informing how they label their packaging. Sellers of ‘filled’ fibre based composite cups will also need to report the weight of cups they have collected and recycled each year.
- De minimis thresholds
The Government will maintain the existing de minimis threshold (£2m turnover and 50 tonnes of packaging placed on the market) for producers who are obligated to pay fees to cover disposal costs and who have obligations under the PRN system.
In addition, a new de minimis threshold of £1m turnover and 25 tonnes of packaging placed on the market will be established. Producers who are between the two thresholds will be obligated to report the amount of packaging, by material and packaging type. They will not be obligated to pay fees to cover disposal costs or meet recycling obligations.
The confirmed obligations on packaging producers go further and deeper than those previously imposed. Packaging producers will also have to be aware of their new obligations in conjunction with any future reforms to the packaging waste recycling note (“PRN”) and packaging waste export recycling note (“PERN”) systems, which is subject to consultation and how these upcoming changes interact with the deposit return schemes that looks likely to be implemented in Scotland in Summer 2023 and in the rest of the UK in late 2024.