Last reviewed 28 May 2021
Businesses which handle or manufacture packaging now have a more detailed picture of the Extended Producer Responsibility (EPR) scheme which is set to come into force in just two years’ time. John Barwise explains what the future holds.
EPR means that the business sector will take on all the costs associated with waste packaging, whether it is recycled, recovered or sent to landfill. Details of the proposed scheme are set out in the Government’s consultation, Introduction of Extended Producer Responsibility for Packaging, published on 24 March 2021.
EPR will replace the existing Packaging Regulations. Steve Gough, Chief Executive of Valpak (a major compliance scheme) commented that: “The policy that will result from this consultation represents the most significant change in the way we deal with waste packaging since the advent of the Packaging Waste Regulations in 1997. It will impact the entire supply chain, so we hope that all stakeholders will engage.”
In the first year, the cost to business is estimated to be £2.7 billion. Most of the costs will be incurred by Brand Owners — the companies whose brand name goes on the product label. The overall cost to the economy will not increase; rather, costs are being shifted from local authorities onto industry. Local authorities will be given money to invest in the collection and recycling of packaging waste.
EPR will benefit the environment by giving manufacturers a financial incentive to supply packaging that is recyclable, reusable or refillable. This should in turn reduce the amount of packaging that becomes waste. Obligated businesses will all have to pay a fee, but the fees will be modulated, ie recyclable packaging will attract lower fees. With the agreement of business, some of the income from fees could be used to invest in recycling infrastructure for packaging which is currently difficult to recycle, such as plastic films. By 2030, it is hoped that 78% of all packaging will be recycled.
Littering should also be reduced under EPR, as the costs of clearing up litter will be met by the producers of (for example) fast food packaging. Coffee shops will have to provide recycling bins outside their premises where consumers can deposit fibre-based cups. New labels will give consumers a clear message — “recycle” or “don’t recycle” — based on the availability of recycling infrastructure in their area; there will be no more ambiguous “may be recycled” messages.
Retailers and manufacturers are still awaiting details of the deposit return scheme (DRS) for drinks containers, which will work alongside EPR. Industry has expressed disappointment that the promised consultation on DRS has been delayed.
Defra is clear that EPR will definitely come into force soon. The purpose of the consultation is to discuss the details of how it will work.
The consultation document sets out the following timescale.
Environment Bill given Royal Assent.
Businesses gather data about their packaging.
Regulations in place.
Scheme Administrator appointed.
First payments made to local authorities to collect and recycle household packaging waste.
Larger coffee chains provide take-back for cups.
Producers assess packaging for recyclability.
Modulated fees introduced.
Payments made to businesses for managing packaging waste.
Payments made for management of litter.
Material specific recycling targets, including possibly one for fibre-based composites (the material used for cups).
Possible reuse targets for packaging.
Mandatory labelling of packaging.
All coffee shops take back cups.
How the scheme will work
There are some significant differences between EPR and the existing packaging regime. Firstly, the costs associated with any item of packaging will not be shared out along the “packaging chain” but will be met by a single producer, normally the brand owner. The Government has placed the main responsibility on brand owners because they are “best placed to act quickly and effectively to change the packaging used on their products”.
The responsible producer will meet the full net costs of managing packaging waste, including:
collection of recyclables from households
disposal of packaging in household “black bin bag” waste
clearing up litter.
Most producers who are currently covered by the packaging regulations will continue to be obligated, but businesses which are solely retailers and do not have a packer/filler role will no longer have to pay fees. They will, however, still have to report data.
UK-based importers of filled packaging will also be obligated under EPR, as will “online marketplaces” who provide a platform for overseas businesses to sell packaged goods online in the UK.
Although EPR encourages the use of refillable and reusable packaging, suppliers of refillable packaging such as pallets and IBCs will still have to pay a fee the first time the packaging is used. These producers are classified as “service providers”. Secondary and tertiary transport packaging is exempt from the regime.
Small businesses and their suppliers
Under the current regime, small businesses whose turnover does not exceed £2 million, or who handle less than 50 tonnes of packaging each year, are exempt. There will still be an exemption from the regulations for the smallest businesses, though there is a possibility that the threshold size could be reduced.
Smaller obligated businesses will no longer be able to take advantage of the “allocation method” which, under the existing regulations, allows them to estimate the amount of packaging they handle based on their turnover.
An important feature of EPR is that all packaging should be covered, including that handled by small businesses. To achieve this, businesses which supply unfilled packaging, eg empty paper cups, to exempt businesses will have to pay the fees and will also be responsible for labelling. These “distributors” may be wholesalers, importers or any other business.
Small, independent coffee shops will probably be required to provide collection points after 2025. Coffee shops will have to take back all kinds of fibre composite cups, not just their own brand, to ensure collection of cups for drinks consumed on-the-go.
Producers will have to provide more detailed information about the packaging they place on the market, specifically, packaging likely to be classified into many more categories. A research project undertaken for Defra in 2019 proposed 79 categories. Retailers who are not brand owners will still have a reporting duty. For example, sellers of coffee cups will have to report on the tonnage of cups collected and recycled through their takeback arrangements.
In order to track packaging through the waste chain and ensure that it is actually recycled, it is likely that a new digital waste tracking scheme will be introduced. This has already been proposed as part of the Resources and Waste Strategy.
Local authorities and waste businesses
Local authorities and the waste industry will benefit from EPR as they will receive payments for the collection and recycling of packaging waste, whether this is in the form of household waste, kerbside collections or litter. However, their payments will be partly dependent on the quality of the service they offer. Those which offer an efficient and effective service will receive full net costs, while those with a lower quality service will receive less. This is intended to drive up the quality of recyclate.
The local authorities are still awaiting the publication of a promised consultation on consistency of recycling collections, which will play an important part in raising the overall recycling rate.
EPR has the potential to make a very big difference to the recycling and reuse of packaging, with significant benefits for the environment and no net cost to the economy. Businesses have until 4 June to comment on the consultation paper.