Although Defra are yet to release the official modulation fees, it is crucial producers begin to prepare now to avoid financial turmoil in the future.
With the final data submission under the shared responsibility system now completed, Extended Producer Responsibility (EPR) is in full swing and obligated packaging producers must prepare now. Through the ‘polluter pays’ model, Extended Producer Responsibility for packaging aims to reduce packaging waste and increase resource efficiency.
The mechanism to achieve the aims set out by Defra is in phase two of the implementation of EPR, where a modulated fee system based on the recyclability of the chosen packaging format will be introduced. Each material will be graded on its recyclability; the harder to recycle, the higher the fee it will incur.
In 2025, obligated packaging producers will be asked to provide much more granular data on their packaging format. This data submission will inform packaging producers’ Local Authority Waste Management fee for 2026 and will depend on the sustainability of their packaging.
Although Defra are yet to release the official modulation fees, it is crucial producers begin to prepare now to avoid financial turmoil in the future.
Update:The first modulated fee submission will now be in October 2025 instead of October 2024. Defra have released some possible materials that will be modulated in the second phase of the implementation of Extended Producer Responsibility. Although the initial focus of eco-modulation is on recyclability, Defra recently shared they will be considering broader environmental implications of packaging materials in later revisions of EPR. |
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Clarity outlines 4 ways packaging producers can prepare for the modulated fee system:
1. Understand the UK Packaging EPR system
Extended Producer Responsibility for packaging began its implementation in January of 2023, and obligated packaging producers will be required to fund the full net cost of the collection, sorting, treatment of packaging waste as well as the actual reprocessing of packaging through the PRN system. It is the principle that the direct cost of specific packaging recycling should be met by those placing the packaging onto the UK market, therefore transferring the responsibility from the taxpayer and placing it onto brand owners and producers.
In the current shared responsibility system, costs are shared throughout the supply chain however, under EPR there will be a single point of compliance with one company responsible for 100% of each piece of packaging placed onto UK markets. This will most likely be the brand owner or importer.
Due to the single point of compliance, those obligated under EPR will see their packaging compliance costs increase significantly. To avoid financial surprises further down the line it is essential that your business is familiar with the incoming regulations.
The key elements to look out for when understanding the EPR system are:
- What’s required of you under the new regulations
- Data reporting requirements and timelines
- How modulated fees may inform the choice of your packaging format
- Updates or changes to the regulations
- Registration requirements
- Updates on cost
To ensure your understanding of the UK packaging system read our guide below.
2. Assess your packaging design
Assess your packaging design on the sustainability and recyclability of the materials used. Where possible, reduce the amount of packaging used and find smarter solutions to your packaging needs. Using less packaging will reduce your obligation overall, therefore reducing costs. Opting for packaging materials that are easy-to-recycle will also significantly reduce your fees under EPR.
It’s crucial to evaluate your packaging format against the materials listed by Defra for potential modulation in the second phase of EPR. The first submission in this format is due in October 2025. As you review, identify any materials in your packaging that align with those listed by Defra and seek out easily recyclable alternatives.
During this assessment, look out for opportunities to not only reduce the overall weight of your packaging but also to improve recyclability and minimise the carbon impact of your packaging. This comprehensive approach will not only reduce costs under EPR, but it also contributes to more sustainable packaging practices and the circular economy.
3. Review your packaging data
Under EPR, your packaging data will be an extremely important element in keeping your costs down. Under EPR you will be obligated to provide much more granular and detailed packaging data, this will inform your Local Authority Waste Management fee, it is crucial your data is accurate, and you have a reliable data set to refer to.
To assess how to reduce and improve the sustainability of your packaging, you must have a full picture of what your current packaging format is. Whatever stage your data is at, our data team are on hand to support your business and create a portfolio of accessible, detailed and accurate data.
Streamline your packaging data process and gain valuable insight to your packaging format by contacting our packaging compliance data experts for a free consultation call below.
4. Keep up-to-date with policy developments
As with any policy in its early stages of implementation, EPR is ever-evolving with new information coming out month on month. Your business needs to be aware of all changes to the new system as they are released by Defra to ensure your decision making around packaging is well informed, and you have the full context of the policy reform.
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