The EPR scheme is designed to shift the part of the bill currently paid by tax payers to local authorities for collecting, reprocessing and recycling packaging on to producers.
The initial roll-out will focus on household and street bin waste. The Government's response to its consultation with stakeholders on the scheme allows for further discussion on managing business waste, which is expected to entail significant commercial costs.
The food industry expected to bear £2.7bn of total costs under the new regime. However latest Government estimates published in response to the consultation put the price tag at £1.7bn. It calculates a further £300m costs for packaging waste recovery notes, which are currently also shouldered by producers, plus £100m systems administrations costs.
Costs passed to consumers?
The Food and Drink Federation (FDF) previously argued that this cost hike would hamper the food industry's drive to make packaging more eco-friendly. Rising commodity inflation has also exacerbated fears that EPR costs would have to be passed down the line to final product manufacturers, retailers and ultimately consumers, further increasing shopping bills.
However, FDF chief executive Karen Betts welcomed the Government's response, which was published on 26 March: “Food and drink manufacturers fully support changes in UK public policy to help us all move towards a circular economy, and we’re committed to continuing to work in partnership with governments and consumers to achieve this.
"We’re pleased the UK Government has today proposed a constructive and pragmatic approach to Extended Producer Responsibility, which will impose changes on how manufacturers approach packaging our products. We welcome the UK Government’s flexibility as the measures have been drawn up, including further discussion on business waste, which would impose disproportionate costs on businesses, as well as the obligation on industry to pay for illegal littering, a decision which we hope the devolved administrations will also adopt.
“Food and drink manufacturers will continue to engage with UK and devolved governments on the remaining elements of EPR, including the establishment of the scheme administrator and implementing the related chemical recycling process.”
Key Government proposals following EPR consultation
- EPR to be phased in from 2024, rather than 2023, focusing on payments for household packaging waste and packaging in street bins managed by local authorities;
- modulated fees based on recyclability to be introduced from 2025, rather than 2024;
- Government to keep exploring payments for commercially collected packaging waste through a task force, with cross-sector representation;
- threshold for producer recycling obligations and disposal cost payments to be kept at £2m turnover and 50 tonnes of packaging handled each year, rather than lowered;
- 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;
- compostable and biodegradable packaging should bear the ‘do not recycle’ label, allowing time to build evidence it can be safely collected and composted separately;
- a scheme administrator will be appointed, to be fully operational in 2024;
- mandatory use of the Recycle Now recycle mark for producers who are required to label their packaging, enabling a single approach across the UK; all packaging types (except for plastic films and flexibles) to be required to be labelled as ‘recycle’ or ‘do not recycle’ by 31 March 2026; plastic films and flexibles will need to be labelled as ‘recycle’ or ‘do not recycle’ by 31 March 2027.
Meanwhile, the Plastics Packaging Tax is set to take effect from 1 April, requiring producers to pay £200/tonne of plastic packaging containing less than 30% recycled materials. Government guidance on how different forms of packaging will be affected by the tax can be found here.