EPR: Costs and Benefits

Extended Producer Responsibility (EPR) for packaging is a policy tool which transfers the full net cost of the collection, sorting, and treatment costs of packaging waste from the taxpayer to specific members of the supply chain.

In the UK EPR for packaging system, there is a single point of compliance where one business will be responsible for 100% of the packaging they place onto UK markets. This differs from the previous shared responsibility system where costs are shared throughout the supply chain.

Due to a single point of compliance, rather than shared, businesses that are obligated under EPR are likely to see their compliance costs increase significantly. Those that are deemed responsible for consumer primary packaging are likely to see the largest increases. Despite the positive aims of the policy such as reducing packaging waste and increasing recycling rates, there will be financial implications for businesses.

Although the costs of EPR will be high, there is potential for these to be reduced by businesses that can adapt their packaging, reduce their packaging, and offer take back of harder to recycle materials.

Below we’ll outline the costs and benefits of Extended Producer Responsibility for packaging:

Costs

Local Authority Waste Management fee:

EPR for packaging places increased financial responsibility on producers for managing the end-of-life of their products. The single point of compliance element of EPR means that one business will take responsibility for the full net cost of the collection, treatment and sorting costs of each piece of packaging they place onto UK markets. In August, obligated packaging producers will be required to submit detailed packaging data to their compliance scheme which will form the basis of their Local Authority Waste Management fee to be paid in 2024.

Increased monitoring and reporting requirements:

In the previous system data reporting is in the 7 +Other categories and requires producers to include material, weights and packaging activity. Under EPR they will be required to include not only material, weight and packaging of each piece of packaging but also the packaging type, and for many producers, the nation of sale of each piece of packaging. Collating this level of information can be costly and time consuming, proactive planning is crucial to keep costs at a minimum.

Administrative costs:

Due to the increased reporting obligations under EPR, obligated businesses will need to establish updated administrative systems and processes to manage their packaging compliance data and the additional information needed.

Improved sustainability:

Once modulated fees come into operation from 2025, Extended Producer Responsibility will financially incentivise obligated businesses to opt for more sustainable alternatives in their packaging design. Not only does this present a financial benefit in lowering your compliance costs, it also presents an opportunity to reduce your businesses environmental impact, and innovate your packaging design, encouraging smarter and greener packaging solutions.

Improved brand reputation:

By complying with EPR, reducing your packaging, and increasing the recyclability of your packaging, your business demonstrates its commitment to sustainability and ethical business practices. Although complying with EPR is the law, utilising a scheme like Comply with Clarity to ensure your reprocessing subsidy is ethically sourced goes beyond this.

We understand that due to EPR reform and increased costs, ethical and sustainable business practices in packaging are becoming increasingly important in businesses’ Environment, Social and Governance strategies. By working with Clarity Environmental and our sustainable Packaging Recovery Note (PRN) sourcing policy, we ensure the money our scheme members spend on PRNs goes to companies whose values align with our own.

Read more about our industry-first, recycling quality standard, CREQS, below.

CREQS

Increased customer loyalty:

Recent research conducted around consumer behaviour and packaging showed that 71% of respondents purchased a product based on the sustainability credentials of its packaging, and 61% of respondents claimed they are less likely to buy products with packaging that is harmful to the environment.

This research illustrates that by utilising the principles of EPR to bring innovation to your packaging format, and demonstrating your commitment to sustainable business practice, consumers are more likely to shop with you.