Defra has finally published its response to the second round of consultation on Extended Producer Responsibility (EPR) for Packaging Regulations. Extended Producer Responsibility is an established policy approach that gives producers an incentive to make better and more sustainable product and it places the financial cost of managing products once they reach end of life on producers.
In this article we summarise the main proposals from the consultation.
Revised EPR timetable, scope and cost
Defra will now implement EPR in a phased manner from 2024, rather than 2023 as initially planned.
Payments for business packaging waste have been dropped following wide criticism across the industry. The government has decided to focus on payments for household packaging waste and packaging in street bins managed by local authorities for now. This decision significantly reduces the overall cost of the new system as it has been reduced by £1 billion to £1.7 billion.
Defra will establish a task force, with cross-sector representation to identify new options for business packaging waste backed by robust market evidence ahead of a review in 2026/27.
Under EPR producers will be financially responsible for payments to local authorities and councils for the collection of household packaging waste, and on the go packaging disposed of in street bins. These payments will support improved recycling collections for households and provide for the collection of additional packaging materials for recycling such as flexible plastic films. It is worth highlighting that payments for packaging waste that is littered will not be included in England and Northern Ireland.
EPR governance
A Scheme Administrator (SA) will be appointed. It will start to mobilise in 2023 and will be fully operational in 2024. An indicative view from HM Treasury is that the SA is likely to be classified as being within the public sector sector (rather than a not- for- profit body set up by Producers which was proposed in the first consultation).
PRN system
Defra will continue to rely on the current PRN system to demonstrate producers’ recycling obligations have been met until 2026/2027. Following this decision Defra has published a new consultation aimed at reforming the PRN system. The key areas of this consultation include reporting requirements and timeframes for the trading of PRNs and the introduction of a ‘technical competence’ test for compliance scheme operators and accredited reprocessors/exporters.
Modulated fees
The government will introduce modulated fees based on products recyclability from 2025, rather than 2024. It is worth highlighting that payments for packaging waste that is littered will not be included in England and Northern Ireland.
Producer thresholds
Defra has decided to maintain the existing threshold for producer recycling obligations and disposal cost payments at £2m turnover and 50 tonnes of packaging handled each year. However, a lower threshold of £1m turnover and 25 tonnes of packaging handled each year will be introduced for producers to report packaging placed on the market only.
Packaging recyclability labelling
All packaging types (except for plastic films and flexibles) will be required to be labelled as ‘recycle’ or ‘do not recycle’ by March 2026. Defra also indicated that until the infrastructure and evidence base can be improved, compostable and biodegradable packaging must have the ‘do not recycle’ label applied.
Deposit Return Scheme -DRS- consultation
In March 2021, the government launched a second consultation considering a deposit return scheme (DRS) for single use drinks containers, following an initial consultation in 2019. The government has indicated that it is analysing the consultation responses and will publish a full response in due course.
Our view
We welcome the pragmatic approach taken by Defra in delaying the implementation of EPR by one year to 2024. Their decision to drop business packaging waste from the EPR scope is sensible considering how impractical their proposed options were and the opposition faced from all corners of the industry.
We will continue to work with Defra and industry stakeholders to deliver the EPR system in line with the revised timetable. It is pleasing to see that DEFRA are attempting to introduce the EPR alongside the DRS as there is significant overlap and interdependencies between the two which a staggered introduction will only exacerbate.
We also welcome the publication of a new consultation aimed at reforming the existing PRN system to address long-standing and significant issues such as lack of transparency, fraud and PRN prices volatility. Addressing these issues will be key in delivering a more robust and future proof system that adequately contributes to the wider EPR framework.
Whether you are an importer, producer in the UK or retailer you will undoubtedly be impacted by EPR. Wastecare is one company that firmly believes that with the right approach we can embrace the changes without it costing the Earth.
