The hope is to create a circular economy in packaging where greater quantities of recyclable waste are reprocessed for reuse.
It sounded like a great idea when first mooted in 2018. Environmentalists such as City to Sea were delighted as it would reduce costs and incentivise better packaging.
However, as the organisation detailed, despite the policy being part of the government’s plans, a UK-wide consultation in 2019 and another in 2021, a promised roll- out by 2023, by the time the last consultation responses were published in March 2022 the process had been delayed.
Overall, City to Sea is less than impressed with EPR’s progress, stating that “the scheme has now been delayed –again – from the proposed date of October 2024 to 2025”. It referred to Defra moving the goalposts following “extensive engagement with industry” and “the pressure facing consumers and businesses in the current economic context”.
It is true that EPR is new and requires a new way of thinking.
In relation to the EPR, Jordan Girling, head of Extended Producer Responsibility at WRAP, a climate action charity, says that for the first time “companies placing packaging on the market in the first instance will be wholly responsible for financing the management of that packaging once it arises as waste”. This is different to the former system in which producers were only partly responsible for financing the management of packaging waste. He knows that the new system brings additional costs to producers but says that “the scale of those additional costs will be dependent on the producer’s activities and how much packaging they are introducing to the market”.
Will EPR hurt print?
Considering who the EPR is targeting, the matter is of relevance to the sector.
Jon Clark, general manager of BPIF Cartons, a special interest group within the BPIF, says that the government regards packaging as pollution and so is applying the principle of ‘the polluter pays.’ However, he adds: “They conveniently forget that packaging is necessary to get product from point of production to point of consumption. And in addition to protecting the product, packaging also informs consumers about cooking, nutritional information and ingredients, etc; without packaging, food waste especially would increase significantly.”
He dismisses the argument that moving the responsibility will move cost on, saying that the cost of collecting, sorting and recycling packaging is presently paid for through Council Tax meaning that shifting the responsibility onto producers should help taxpayers: “Do we think that if this happens then our Council Tax will reduce? I very much doubt it.”
Clark emphasises that the cost of EPR should “not be borne by the packaging industry as it is so huge – it is estimated to be around £2bn per annum”. He reckons that ultimately the cost of EPR will filter down to consumers through higher prices of goods.
But taking an opposing stance, Girling believes that while the costs for packaging waste management will increase for ‘producers’ under the EPR system, “the costs of packaging waste management are not necessarily increasing overall; the existing costs are simply being redistributed to the companies that are placing the packaging on the market in the first instance”.
He does recognise that there are additional costs to set up the new system and that costs will increase as targets are increased. However, Girling takes the line that “placing 100% of the costs on the companies placing the packaging on the market means that those companies are more incentivised to make the packaging more manageable”.
How will the government achieve its goal?
EPR fees are to be calculated on the cost of collection, sorting and recycling of packaging based on the net cost to local authorities. But Clark worries that there is a grey area in relation to how efficient local authorities will have to become as “effectively they could have a blank cheque, with costs met by the packaging industry”.
And then there’s the matter of cost calculations where base costs for each material type will vary, with a further eco-modulated fee applied to materials that are easier or more difficult to recycle.
At the time of writing, Clark says: “There is no indication as to what these base and eco-modulated fees will be, which makes it impossible for companies to budget.” He notes that the government’s aim is to cut the amount of packaging used and to switch to more sustainable and easily recyclable materials such as fibre-based materials while increasing the amount and quality of recycling – this suits products made with paper and card but not necessarily others.
From an alternative standpoint, Girling and WRAP believe in the EPR system precisely because it “is progressive, capturing more packaging placed on the market than the former system” and because it “also allows for the introduction of integrated regulatory mechanisms that make the system fairer overall”. Here he’s talking of the eco-modulation that Clark has just referred to. Girling thinks that it’ll lead to producers placing easier to recycle packaging on the market and will be rewarded with discounted EPR fees and conversely, producers placing harder-to-recycle packaging on the market incentivised to move to more recyclable packaging through increased EPR fees.
Clark takes a moment to explain that the BPIF has been pushing for separate collections for paper and card as a means of improving still further the quantity and quality of recycling. “Unfortunately,” he says, “the government will not instruct local authorities regarding separate collections of paper and card leaving it up to the councils to carry on with co-mingled collections if that is their preferred option.” He’s not happy that some paper and card could be lost through landfill or incineration.
Clark also highlights the fact that most fibre-based material collected in the UK must be recycled abroad due to the lack of UK recycling facilities. This is why he says that “we must be aware of the requirements that the foreign recycling plants maintain – the UK cannot go it alone”. He contrasts the position in Europe and the UK: “In most of Europe separate collections of paper and card are the norm... but in the UK waste is a devolved issue so it is possible, even probable, that different rules could apply in the home nations; this must be avoided.”
Who has responsibilities under the EPR?
As to the practicalities of EPR, the theory is that brand owners should pick up most of the costs. But Clark is concerned that packaging suppliers could be responsible if they act as a ‘distributor’ of packaging to companies that are below the de-minimis thresholds. “This,” he says, “will put a huge strain on packaging suppliers as they will have to find out if their customers are ‘small’ within the definitions of EPR; this will be a huge administrative burden.”
In overview, reporting for large companies that have a turnover of more than £2m and handle over 50 tonnes of packaging a year will be required twice a year. While this requirement came into force in March 2023 Clark comments that “due to the lateness and uncertainty regarding reporting obligations if companies report their 2023 date by the end of May 2024 they will not be prosecuted”.
He points out that payments under EPR will start in 2025 and companies with a turnover of more than £1m handling between 25 and 50 tonnes of packaging will have a reporting obligation which did not exist before.
It doesn’t help with confusion in the trade that, as Clark points out, Nation of Sale data reporting has also recently been further delayed.
But the real issue, in Clark’s view, is that there is a great danger that “some companies who should have been registered under the current Packaging Waste Regulations have not done so through ignorance of the requirements and this will be highlighted under EPR reporting”.
Questionable rules?
The EPR rules have, according to Clark, the potential to place a huge financial and administrative burden on the packaging industry. He says that protecting the environment is one thing, but he has concerns about unintended consequences, such as an increase in food waste if packaging formats are changed to reduce the impact of EPR fees.
He’s adamant when he says that “the EPR scheme certainly is not ready” which is why there have been delays in implementation; “it is only recently that a scheme administrator has been appointed for the next two years and it is expected that an operation of the size of a FTSE 250 company will have to be put in place to fully implement EPR”.
Clark adds that “the EPR has been talked about for years; the performance of Defra and the Environment Agency has been disappointing to say the least with huge time delays in responding to various consultation processes and a total lack of clarity in the requirements of the scheme”. These rollbacks are causing confusion.
But in response, Girling tells that last summer the fees payable by producers under the new EPR system were deferred from October 2024 to October 2025 so that Defra could use the additional year to conclude the design of the EPR system.
He also considers it noteworthy that while the EPR fee payment obligation was deferred for a year, the rest of the new system was not. As a result, Girling advises that “producers need to report under two systems – old and new – in parallel” which will add administrative burden.
Even so, a particular bugbear of Clark’s is that those expected to pay the bills under EPR – namely the packaging industry – “have for the most part been ignored during the process to date.”
He’s bothered too that the process is confusing. However, Girling does not think the same; In fact, he says: “Defra’s communications about reporting requirements have been quite clear.”
Overall, Girling feels that the new packaging EPR system is workable, “that the new packaging EPR system goes far enough, particularly as there are plans to expand the system over time”, and the regulatory requirements and stakeholder obligations are ready.
However, he does acknowledge that the administrative burden of having to report under two systems but suggests it’s a small price to pay for environmental improvement.
What EPR will mean for print
Ultimately, Clark reckons that the EPR will certainly drag more print companies into extra administrative, taxation and cost burdens which have come quickly after the introduction of the Plastics Packaging Tax in April 2022.
The BPIF isn’t sitting idle. Clark says that the body is lobbying government with colleagues from other trade associations including the Packaging Federation and Incpen “to minimise the impact the impact of EPR on our members.” It is also holding briefings and round tables with members as information is released by Defra and the Environment Agency, operates an EPR e-help line and will be producing guidance for members.
Summary
But if the world of print is bothered about UK based legislation on this subject, Clark points to more coming out of the EU. He’s referring to the EU Deforestation Regulation which he says “will have an impact on UK manufacturers”.
At the end of the day, manufacturing-related businesses will have no option but to comply. If they’ve not taken good advice they should do so now and plan ahead.
