UK’s new Extended Producer Responsibility regime increases waste packaging responsibilities
The question
How will the Extended Producer Responsibility (EPR) regime alter the way businesses deal with waste packaging?
The key takeaway
The cost to businesses of dealing with waste packaging will increase significantly under EPR. Obligations regarding collecting data on packaging handled and supplied and reporting that data to the Government came into force on 28 February 2023, and will be followed up in 2024 with ongoing reporting requirements along with registration and fee payment obligations and a continuing requirement to purchase Packaging Recycling Notes (PRNs) and Packaging Export Recovery Notes (PERNs).
The background
As part of its Resources and Waste Strategy released in late 2018, the UK Government committed to working towards the objectives of the EU’s Circular Economy Package. This involves a series of legislative reforms which include implementing EPR in relation to packaging waste. EPR aims to create an incentive for waste packaging producers to: (i) use less packaging overall and (ii) use packaging that is easier to recycle.
Many retailers and brand owners will likely already be registered as a “producer” under the current Packaging Waste Regulations 2007 system and this position may not change under EPR. However, businesses will need to take stock of how EPR may impact their obligations as a household packaging producer.
The development
One of the main changes under EPR is that the full cost of collecting, sorting, recycling and disposing of household packaging waste will be placed on packaging producers rather than the taxpayer. Currently the UK’s waste packaging regime operates on a shared producer responsibility basis and it is estimated that packaging producers pay around just 10% of the cost of dealing with packaging waste. Under EPR, the focus will be on having a single point of compliance within the waste management chain – with the party that has the most influence on packaging choices – and it is envisioned that the cost of compliance for packaging producers will rise from approximately £350m to £1.7bn.
There are two phases to implementing EPR:
5. 2023: The Packaging Waste (Data Reporting) (England) Regulations 2023 (and equivalents for Wales, Scotland and Northern Ireland) (Reporting Regulations) came into force on 28 February 2023. These impose data collection and reporting obligations on packaging producers in the UK. The results of this reporting will feed into calculations for fees that, in turn, will herald the implementation of the second phase.
6. 2024: Fee payment obligations will be introduced (based on calculations facilitated by the requirements under the Reporting Regulations) as well as ongoing data reporting requirements and PRNs and PERNs by producers will be needed.
Next steps
A key step for businesses in evaluating the impact of EPR is determining whether their organisation is caught by the Reporting Regulations and, if so, if it is as a “small” or “large” producer.
Producers who have a turnover of less than £1m annually and/or handle less than 25 tonnes of packaging will not currently have obligations under the Reporting Regulations. Producers who have an annual turnover of £1m to £2m and handle 25-50 tonnes of packaging annually will fall within the definition of “small” producers. “Large” producers are those who have a turnover of more than £2 annually and handle more than 50 tonnes of packaging or packaging materials a year. The Reporting Regulations also confirm that each company in a group of companies will be considered a “small” or “large” producer if the aggregate of the annual turnovers and packaging tonnage thresholds handled by the companies in the group meet the relevant “small” or “large” producer thresholds.
Why is this important?
Small producers (that are not also an online market operator or seller) will only be subject to data collection retention and reporting obligations regarding the type and weight of their waste packaging. Conversely, large producers, aka “fully obligated producers” (that are not also an online market operator or seller) will be subject to more detailed data collection, retention and reporting. They will then also have further fee payment and recycling obligations, discharged via purchasing PRNs or PERNs, as applicable.
Any practical tips?
Organisations which are unsure whether they are caught by EPR can check via an online questionnaire the Government has provided to confirm the roles/responsibilities of organisations.
Businesses already registered with a registered compliance scheme under the existing producer responsibility regime should engage with their provider to understand the practicalities of getting ready for EPR, as they will be able to provide operational and practical assistance.
From 1 January 2023, businesses will need to have started collecting and recording the data which EPR requires in order for it (or its compliance scheme) to report at the applicable times.
Business would also do well to start reviewing current packaging practices and considering options in terms of both reducing the amounts of packaging used and whether any aspects of the packaging can be made easier to recycle.
The Department for Environmental, Food and Rural Affairs (DEFRA) is currently developing an EPR digital platform (which should be operational from July 2023) that will allow producers to register and report their data.
Spring 2023