3 ways your businesses should be preparing for Extended Producer Responsibility fees
As the UK’s extended producer responsibility (EPR) regulations come into force, businesses using packaging should already have a handle on the potential costs to their business, understand their responsibilities and take proactive steps to ensure compliance.
The new EPR system holds producers accountable for the entire lifecycle of their packaging, from production to disposal. By encouraging businesses to reduce the environmental impact of their packaging, the EPR scheme aims to foster more sustainable practices and reduce waste.
In this blog, we’ll discuss the objectives of EPR, which businesses will be responsible for EPR fees, when the scheme kicks into action and the potential costs to your business. We’ll also outline three practical steps your business should be taking to prepare.
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What is Extended Producer Responsibility (EPR) regulation
EPR is a new packaging regulation designed to shift the financial responsibility for waste management from local authorities to producers of packaging.
Businesses that handle packaging will now be required to cover the full costs of managing the waste they generate, rather than just a portion. This system incentivises businesses to adopt more eco-friendly packaging solutions and reduce the amount of material they place on the market.
The money raised is intended to be used to reform the way that household waste is collected and processed, improving recycling rates and reducing packaging waste.
Which businesses will be responsible to pay EPR fees
The EPR legislation will apply to businesses that supply or import packaging into the UK market. This doesn’t only include packaging companies who manufacture, sell or import packaging directly, but the companies who use packaging too.
Businesses who fall under the legislation are primarily providing goods and services where the packaging enters UK households. This includes brand owner packaging, packers and fillers placing goods into unbranded packaging, businesses who operate in online marketplaces and direct to consumer shops, and distributors of retail goods.
Fees will apply to companies who handle 50 tonnes or more of packaging and have a turnover of £2million or above.
Companies below this threshold will still be required to report their annual packaging use.
When does EPR legislation start?
Whilst the fees have been pushed out to late 2025, the responsibility of reporting packaging use is already live. Companies should be logging their packaging usage for 2024 ready to report in early 2025.
To comply businesses with need to be able to identify the portion of their packaging that is ultimately sent to UK households vs what is sent only other businesses. Both types of packaging will attract fees but those servicing the household market will be required to pay the most.
Penalties for non-compliance in packaging regulation schemes can be significant, ranging from fines to prosecution for serious breaches. Therefore, it’s crucial for businesses to take immediate steps to assess their packaging, implement changes, and ensure they meet the new EPR requirements.
How much will EPR cost my business?
If your business falls within the category for EPR obligations, the costs will be dependent on the tonnage of material used.
In August 2024 the UK Government published illustrative fees by material type, whilst these fees have not been confirmed, they gave a lower, intermediate and higher projection of the costs that could be involved.
For example, the intermediate cost for each tonne of plastic used is projected at £515 per tonne. So, if you use 15 tonnes of plastic, your end of year household cost will be £7,725 for this material alone.
The fees cover aluminium, fibre-based composites, plastic, paper or board, steel, wood, glass and other materials too.
Three things your business should be doing to prepare for EPR legislation
We’ve pulled together three key tips to help you prepare for extended producer responsibility legislation:
1) Understand your packaging use and how the fees will apply to you: It’s important to understand what the impact will be to your business and whether you are eligible to pay the fees. You can then devise a plan of attack to manage this additional cost.
Does your business supply packaging which will end up in UK households?
You need to understand:
- Which packaging lines are potentially going into UK households
- Which packaging lines are only going to other Businesses
- The weight and type of all packaging materials that you use
This will allow you to do a quick calculation of the impact to your business. It also provides a framework for your packaging usage reporting.
Remember, you will need to submit detailed reports on the tonnage and material types on the packaging that you use. You must maintain accurate records to demonstrate compliance and be ready for audit.
2) Switch to more environmentally friendly materials: EPR costs are calculated by material used, with materials which are more problematic being charged higher than easily recycled materials. By taking stock of the packs you are using and the materials they contain, you can devise a plan of attack to switch materials to more environmentally friendly choices.
3) Consider a packaging review to reduce your packaging weight: Reviewing your packaging SKUs may not sound like the most exciting way to spend your time so, consider a packaging review. A review can help to reduce packaging material use and packaging costs, as well as the overall packaging legislation fees to your business.
A packaging expert can review the products you are using and identify ways to take weight out of your packaging. If you are using 50 tonnes of packaging annually, you may be surprised by the impact that shaving a few grams off an individual pack can have on your total packaging weight and your future EPR fees.
How Macfarlane Packaging can help you with EPR legislation
Navigating the complexities of EPR and transitioning to more sustainable packaging materials, or reducing packaging weight, can be a challenge for businesses of all sizes. Macfarlane Packaging is here to help you at every step of the journey.
The Macfarlane Packaging Optimiser tool can calculate the potential cost of EPR to your business and help uncover areas of opportunity for savings.
Our friendly packaging experts are on hand to conduct a packaging audit and advise on sustainable materials or opportunities for packaging weight reduction.
Why not contact us today to arrange a packaging audit for your business?