The Department for Environment, Food and Rural Affairs has announced that Extended Producer Responsibility (“EPR”) will be introduced from 2024. However, this article explains why businesses need to start considering now which steps they will take to meet their record-keeping obligations under EPR.
What is EPR?
It is estimated that the UK generates 11.6 million tonnes of packaging waste per annum, and that, currently, packaging producers pay only 10% of the cost of dealing with packaging waste. EPR is intended to encourage producers to use less packaging and to use packaging that is easier to recycle by making them fully responsible for the cost of managing the packaging that they place on the market. In due course, EPR will also require all packaging types (except for plastic films and flexibles) to be labelled as either ‘recycle’ or ‘do not recycle’.
Which companies will be obligated under EPR?
The EPR will apply to businesses that have an annual turnover of at least £1 million, are responsible for at least 25 tonnes of packaging per annum, and that undertake the following packaging activities:
- packaging own-brand products to sell to UK consumers;
- using a third party to package and sell own-brand goods to UK consumers;
- using ‘transit packaging’ to protect goods during transport so they can be sold to UK consumers;
- importing own-brand and third-party packaged products into the UK to sell to consumers, unless doing so on behalf of a third party (e.g. a supermarket);
- operating an online marketplace that allows third parties based outside the UK to sell packaged products or empty packaging through it;
- hiring or loaning out reusable packaging to UK third parties; and
- making and then selling empty packaging to third-party organisations that do not need to take action under the regulations.
The extent of a business’ obligations under EPR will depend on whether they are classed as a “large organisation” or a “small organisation”. Large organisations have an annual turnover of £2 million or more, and handle and supply more than 50 tonnes of empty packaging or packaged goods in the UK. Small organisations:
- have an annual turnover of between £1 million and £2 million, and handle and supply more than 25 tonnes of empty packaging or packaged goods through the UK market; or
- have an annual turnover of over £1 million, and handle and supply between 25 tonnes and 50 tonnes of empty packaging or packaged goods through the UK market.
Both large and small organisations will have record-keeping and reporting obligations under EPR. In addition, large organisations will continue to be required to purchase packaging waste recycling notes (PRNs) and packaging waste export recycling note (PERNs) under the existing packaging waste producer responsibility regime. From 1 April 2024, large organisations will also be required to pay a fee based on the quantity of packaging they handle and supply that is collected by local authorities from households or street bins, and this will become a modulated fee based upon the recyclability of the packaging material from 2025.
What are the record-keeping obligations under EPR?
From 1 January 2023, large organisations and small organisations will need to record the weight of:
- individual materials in the packaging they handle and supply;
- materials used in their ‘primary’, ‘secondary’ and ‘transit’ packaging;
- packaging likely to become household or non-household waste; and
- packaging likely to end up in street bins.
Data must be collected on the weight (to the nearest tonne) of individual material types used in the packaging handled and supplied.
The packaging will need to be categorised into the following materials:
- aluminium;
- fibre-based composite;
- glass;
- paper or cardboard;
- plastic;
- steel;
- wood; and
- ‘other’ (e.g. bio-degradable plastics, cork, cotton, flax-based products, nitrile, rubber, silicone, etc. – the weight of each material within this category will need to be separated).
Each material type will also need to be categorised as either:
- primary packaging (also known as a ‘sales unit’ – i.e. the individual container in which goods are stored to sell to consumers);
- secondary or shipment packaging (i.e. packaging for grouping several ‘sales units’ for selling or shipping purposes); and
- transit or tertiary packaging (i.e. packaging used to group secondary packaging units together to protect them while being transported or handled).
Finally, organisations that:
- sell any filled packaging to consumers;
- sell empty packaging to UK organisations that do not need to comply with the regulations;
- sell empty packaging directly to consumers in the UK;
- hire and loan out reusable packaging;
- own an online marketplace that allows other organisations to sell their empty packaging and packaged goods to UK consumers; or
- import packaging to the UK that is discarded without selling or exporting it,
must collect ‘nation data’ (i.e. information about which country in the UK the packaging has been sold, hired, or loaned in).
What are the reporting obligations under EPR?
The reporting obligations depend on whether a business is a “large organisation” or a “small organisation”.
A large organisation will have to register for the EPR for packaging online service from April 2023 and submit data about empty packaging and packaged goods it handled or supplied through the UK market every 6 months. Initially:
- for the period January to June 2023, data will need to be submitted between 1 July 2023 and 1 October 2023; and
- for the period July to December 2023, submit data between 1 January 2024 and 1 April 2024.
A small organisation will have to register for the EPR for packaging online service (although registration will not open for small organisations until 2024) and submit data about the empty packaging and packaged goods it handled or supplied throughout 2023 between 1 January 2024 and 1 April 2024.
Nation data will need to be submitted by December 2024.
If either a large organisation or a small organisation misses a reporting deadline, a penalty charge may be payable.
Comment
The introduction of EPR reflects the current regulatory direction of travel towards sustainability in packaging, and follows the introduction in April 2022 of the plastic packaging tax. The data collection and reporting obligations under EPR will represent a significant increase in the administrative burden for businesses. For the first time, businesses with turnovers of between £1 million and £2 million and which handle between 25 tonnes and 50 tonnes will be required to collect and report on their packaging. Furthermore, those companies which are already obligated report on their packaging to acquire PRNs and PERNs may find that additional information is required in order to meet nation data requirements. The Government has recognised that packaging producer compliance schemes will have a role in assisting companies to collect the necessary data. However, small organisations are unlikely to already be members of such schemes (as they are not obliged to purchase PRNs or PERNs), so they will need to decide whether to potentially pay for their assistance in collecting the data, or attempt to collect it on their own. Therefore, and particularly because of the risk of a penalty charge for late submission), businesses should take the time now to plan how they will be in a position to record the packaging that they handle and supply from 1 January 2023.
For more information or advice, please contact one of our experts in our Regulatory Team.
