Major new packaging charges come into force next year. Prepare now to minimise the cost, advises David Meehan, packaging compliance expert at Biffa.
Extended Producer Responsibility (EPR) is due to be introduced in the UK in 2024.
The legislation makes producers responsible for the collection, sorting, recycling, or disposal of their product packaging. It means that businesses will have to fund the total cost of managing their household product packaging, from large white goods to groceries.
It aims to transfer the annual £1.7bn financial burden of household packaging waste collection from taxpayers to producers, generate accountability across waste streams, and make brands think more sustainably about their packaging lifecycle after purchase.
Historically, responsibility has sat with a small group of around 8000 compliant producers; now it will include smaller producers. EPR has the potential to help businesses better engage with a circular economy (waste recovery, recycling or regeneration in a closed loop).
Who is affected?
Any business which is identified as a ‘producer’ and handles over 25 tonnes of packaging in a year will be affected by EPR legislation and must act now
- Brand owners who sell packaged goods under their brand name. When a brand isn’t identifiable, the responsibility lies with the business responsible for packing or filling the packaging.
- Importers who import packaged products into the UK.
- Service providers who hire out or lend reusable packaging (such as supermarket crates).
- Distributors who manufacture or import empty packaging and sell that packaging to UK businesses (not already obligated as a producer).
- Online marketplaces that operate a marketplace whereby non-UK sellers can sell packaged products or empty packaging to UK consumers.
- Sellers who sell packaged products or packaging to the end-user.
Charities are exempt, even if they sell packaged products (like Christmas cards) in-store or online.
Many scenarios exist within these definitions, and impact on businesses will vary. Our packaging compliance experts at Biffpack are working with businesses to ensure compliance is met. The Department for Environment, Food & Rural Affairs (DEFRA) has also released an online obligation checker to help businesses understand if they are affected by the new legislation.
How are you affected?
The scheme will impact smaller and bigger businesses differently.
Smaller organisations with a turnover between £1 million and £2 million and handling 25-50 tonnes of packaging in a calendar year must provide detailed reporting on the packaging they produce and how waste will be managed.
Larger businesses with a turnover above £2 million handling more than 50 tonnes of packaging per year will have to cover the cost of EPR regarding their waste and report their data every six months.
Collection of this data must begin from January 2023 to create a full calendar year of data, with the first six months due for submission between July and October 2023 for large organisations or between January and April 2024 for small organisations.
Due to the lower threshold introduced by EPR, there will be lots of newly affected businesses in the UK that will need to review their reporting processes and make changes to start capturing data.
The Government estimates that producers’ costs will be around £1.7bn in the first full year of implementation. However, it also needs to calculate the cost based on the new reporting structure. Producer fees will be calculated in 2024 after a year of reporting.
Fees will initially depend on how much it costs to process or dispose of packaging based on volume. However, this will change over time & move to a system based on comprehensive recyclability assessments.
Reduce financial impact with preparation
For the first year, companies will have to report on aluminium, steel, glass, wood, plastic, paper, cardboard, fibre-based composites and other materials like industrially biodegradable packaging.
Additional reporting requirements will be introduced as time goes on. For example, from January 2023, a business may only need to report a plastic bottle as a 10g clear plastic bottle. But as EPR progresses, they will need to break down each plastic type used to make that bottle so that it can be recycled more effectively.
In short, the legislation will increasingly favour recyclable materials – the easier packaging is to reuse or recycle, the lower the cost to producers. Higher volumes of waste created by packaging choices will increase costs. Reviewing and redesigning your packaging now may incur costs in the short term but will ensure your EPR obligation is minimal going forward.
At a minimum, businesses must understand the requirements for branded products and packaging that will be disposed of in public bins. Better yet, identify by brand which products will be categorised as household waste and record the materials that make up their packaging; this will establish a clear head-start with reporting. Beginning to sort products into these areas will make the transition much smoother.
The best way to prepare for EPR is to ensure you have a thorough understanding of the recyclable potential of the packaging you handle. Use the reporting data you collect this year to pre-empt costs and plan more sustainable solutions.
Be mindful of time. Preparation is key, and product packaging used since January must be reported in October.
Systems will be available to help with transition. DEFRA is developing a calculator to help each business estimate how much EPR will cost. The Government is also offering help via a third-party compliance scheme. This allows a third party to help you register and report your data if needed. At Biffa, our EPR implementation team runs seminars and clinics to explain the new regulations.
There’s real merit in EPR. It will benefit the circular economy by incentivising businesses to recycle more. It encourages greater use of highly recycled and durable materials, which should spark a mindset shift from ‘produce to dispose’ to ‘produce to reuse’. Keeping track of and effectively managing packaging waste enables businesses to contribute to a ‘Waste Net Zero’ future.
More details at Biffpack.