What is meant by extended producer responsibility EPR?

Extended producer responsibility aims to make the producer of packaging material responsible for the full net cost of collection, managing, recycling and disposing of household packaging waste and on-the-go packaging disposed of in street bins, as well as other incentives, such as reducing litter, eliminate unnecessary packaging and increase the quality of recycled materials.

EPR aims to achieve this by utilising the “Producer pays” principle, together with modulated charges based on the recyclability of the material in question.

So who counts as a Producer under the new EPR system?

1. Brand Owner – those who package goods and sell them under their brand name. Where a brand is not identifiable, then the obligation would fall to the organisation that carried out the packing or filling of the packaging.
2. Importer – those who import filled-packaging
3. Service Provider – those who hire out or lend reusable packaging
4. Distributor – those who manufacture or import empty packaging and sell that packaging to anyone who is not an obligated producer
5. Online Marketplaces – those who operate a marketplace whereby non-UK sellers can sell filled or empty packaging to UK consumers
6. Sellers – those who sell filled packaging to the end-consumer

The full cost of EPR is difficult to assess, due to a number of data inaccuracies. However, official literature suggests costs would be around £1.7b per annum for all packaging types. That being said, VALPAK, one of the largest UK compliance schemes, has estimated the overall system cost to be closer to £2.9b per annum in 2023. The vast discrepancy is largely attributed to the somewhat unknown cost of Household collection systems. This represents a 15 – 30 fold increase in costs compared to the current system.

To put this into context, if the costs are passed on by industry (very likely), then each shopping basket of 58 items provided by a major UK retailer would see costs increase by approx. 0.4% – 0.6% for the ~27.8mio household in the UK – equivalent to around £108 per household (figures based on 2021 assessments and a 1.6% RPI – current values may vary significantly).

The scheme will be managed by a scheme administrator who will be appointed by Defra and will likely be within the public sector.

A key point of note in the new scheme is concerning Biodegradable and compostable material. At present, these should be labelled as ‘do not recycle’ until the infrastructure and can be improved. This means it will automatically attract a higher modulated charge.

At present, business waste is not considered within the scheme, as the sectors have demonstrated that business waste is already handled in a very efficient way. This may change later on, as the UK Government intends to establish a taskforce to review options for businesses in 2026/27

So who qualifies for eligibility to the new EPR system:

There is a de minimis threshold for paying fees which is £2 million annual turnover and handles more than 50 tonnes of packaging a year, and the threshold for reporting packaging is half of this. If a company has a turnover of £1m and handle 25 tonnes they will need to report packaging placed on the market but not financially contribute.