Shared Responsibility and Extended Producer Responsibility: What’s changing?

The Extended Producer Responsibility (EPR) system is a green policy tool designed to incentivise certain members of the supply chain to use easy to recycle materials for their packaging by making obligated businesses responsible for the full net cost (FNC) of the collection and recycling of the packaging waste they place onto UK markets.

Packaging producers that meet the threshold are currently obligated under the UK’s Producer Responsibility Obligations (Packaging Waste) Regulations 2007 UK Statutory Instruments 2007 No. 871 which subsidises the recycling of packaging waste placed onto UK markets. The UK is currently in phase one of the implementation of EPR and obligated producers must act now to prepare for the first data submission under the new system, but what is actually changing?

Clarity explains the key differences between the two systems and how obligated producers will comply with the new regulations.

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Background
Producer Responsibility: Packaging Waste Regulations 2007
Extended Producer Responsibility
What are they differences between EPR and the current Packaging Waste Regulations?
Questions about EPR?

Background

In July 2019, the government released its first consultation on the proposed reform of the 2007 Packaging Waste Regulations which explored a vast range of reform options. The second consultation was launched in March 2021 where the government outlined its final proposals for the new system, and a year later, in March 2022, it released its response to the consultation responses.

Producer Responsibility: Packaging Waste Regulations 2007

The Producer Responsibility system for packaging has been in place in the UK since 1997 and has been instrumental in increasing the recycling rate of packaging from 25% (pre-regulations) to 63% in 2021.

The packaging regulations were brought into place to ensure businesses placing packaging onto UK markets were helping to manage the waste being created. This system requires businesses to purchase Packaging (Export) Recovery Notes (PRNS/PERNS) that are equivalent to the amount of packaging they place onto UK markets.

The UK chose a market-based, supply and demand system to increase recycling rates and harness market forces to bring investment to the UK recycling network. This system works in harmony with the global waste commodity markets in which the UK operates in and provides financial incentive to those that buy and use recyclate, whether in the UK or overseas. The PRN market is a successful system and is set to remain the same until 2027 as a minimum.

Under the current producer responsibility system, costs are shared throughout the supply chain, with the percentage of responsibility allocated to different points:

• 48% to businesses that sell that filled packaging to end users (primary, secondary, and tertiary packaging)
• 37% to businesses that pack fill that packaging (primary, secondary, and transit)
• 9% to businesses that convert those raw materials into packaging
• 6% to manufacturers of packaging materials

To comply with the current regulations, obligated producers need to:

1. Register as a packaging producer annually
2. Submit annual packaging data to generate their recycling obligation
3. Meet their recycling obligation by purchasing PRNs and obtaining evidence of compliance
4. Submit a certificate of compliance by 31 January the following year or use a compliance scheme to do this. on their behalf

Extended Producer Responsibility

In 2018 the UK adopted the Circular Economy Package (CEP) meaning that the UK is committed to keeping resources in use for as long as possible, minimising waste and promoting resource efficiency. Extended Producer Responsibility will support local authorities by funding kerbside collections and more effective management of packaging waste. EPR is the UK’s answer to meeting the CEP and incentivises change makers to use easy to recycle and widely recycled materials in their packaging. This will be achieved through an eco-modulation system.

With EPR, obligated packaging producers will cover the full net cost of the collection, sorting and treatment of packaging waste in the UK. This policy is set to generate £1.7bn which will be redistributed amongst Local Authorities to improve their recycling infrastructure, subsequently improving recycling rates and the quality of recycling. The actual recycling of packaging waste will continue to be funded through the PRN system.

Instead of the financial responsibility being split across the supply chain, EPR will replace this with a single point of compliance that levies 100% responsibility for a piece of packaging onto one business – namely the brand owner, importer or pack-filler where the packaging is unbranded when placed onto the market.

To comply with Extended Producer Responsibility obligated producers need to:

1. Register as a packaging producer annually, this can be done through their compliance scheme
2. Submit two granular packaging data reports per year to generate their Local Authority waste management fee and their recycling obligation
3. Pay their Local Authority waste management fee to the scheme administrator
4. Meet their recycling obligation by purchasing PRNs and obtaining evidence of compliance
5. Submit a certificate of compliance by 31 January the following year, or use a compliance scheme to do this on their behalf

What are they differences between Extended Producer Responsibility and the current Packaging Waste Regulations?

Single point of compliance:

The first and main key difference between the two systems is the point of compliance. EPR levies 100% responsibility for a piece of packaging on one producer, whereas in the current system the responsibility for one piece of packaging is spread out across the supply chain.

Local Authority Costs:

The financial burden of kerbside collections currently sits with the taxpayer however, Extended Producer Responsibility will transfer this responsibility to obligated packaging producers by requiring a Local Authority waste management fee. This fee will be paid from producers to the scheme administrator and redistributed amongst Local Authorities.

Full Net Cost:

Where the current system only subsidises UK recycling through the purchasing of recycling evidence by obligated producers (PRNs), EPR will fund the full net cost of collection, treatment and sorting of packaging waste.

Eco-Modulation:

Defra will look to introduce modulated fees for each packaging material in 2025. Modulated fees determine the cost an importer or brand owner pays for a type of packaging depending on certain characteristics such as environmental impact of its production, recyclability and the life span of the material used. The more recyclable a material, the cheaper it will be under Extended Producer Responsibility.

Lower threshold for compliance:

Currently obligated producers are companies who have a turnover of £2m per year and place 50T of packaging onto UK markets. Under the new system companies who hit this threshold will be referred to as ‘large producers’, and companies who have a turnover of £1m per year and place 25T of packaging onto UK markets will be referred to as ‘small producers’ and will be brought into scope for packaging compliance for the first time. ‘Small producers’ will have a data only obligation and will be required to submit packaging data just once a year.

Reporting:

In the current system, obligated producers are required to submit packaging data once a year to generate their recycling obligation i.e. How many P(E)RNs they will need to purchase in order to comply. Under the new system, producers will report granular data twice a year with the packaging material, weight and type as well as packaging activity, waste type and for some producers the nation of sale of each piece of packaging. These twice a year EPR reports will produce both a PRN recycling obligation, and a household waste collection and management fee.

Questions about EPR?

If you have any questions on EPR or would like to discuss your obligation and compliance to the EPR system, please use the form below to contact us and one of our EPR specialists will contact you same day.