EPR: The Complete Guide


Contents

Overview
What is EPR?
Why is EPR being implemented?
When is EPR taking place?
How will EPR work?
How will EPR impact businesses?
How much will EPR cost to businesses?
How will Local Authority funding change after EPR?
How to prepare for EPR?
Questions about EPR?

Overview

The implementation of Extended Producer Responsibility (EPR) is imminent and obligated businesses must begin preparing now.

This new system is designed to encourage producers and importers to use easy to recycle materials in their packaging and ensure that those obligated businesses pay for the full net recycling cost of the packaging they place onto UK markets, rather than the consumer.

What is EPR?

Extended Producer Responsibility is a system whereby obligated packaging producers will be required to fund the full net cost of the recycling of packaging. It is the principle that the direct cost of specific packaging recycling should be met by the those placing the packaging onto the UK market. Taking the recycling responsibility from the consumer and placing it onto brand owners and producers.

Why is EPR being implemented?

In 2018 the UK adopted the Circular Economy Package (CEP), meaning that the UK is committed to the full net cost of collecting, sorting, treating and recycling to be funded by producers rather than central government taxation. EPR is set to help local councils by funding collections and more effective management of packaging waste; it is the UKs answer to meeting the CEP and encourages the use of easy to recycle materials and penalise the use of hard to recycle.

When is EPR taking place?

There will be a phased introduction of EPR, beginning with the gathering of data from January 2023 by producers for:

Registration under EPR and the first data submission will take place in Q1 for 2024, and by Q3 of 2024 brand owners will need to gather data in modulated categories such as polymer type and packaging format.

How will EPR work?

EPR will fund the full net cost of the collection, sorting and treatment of packaging waste through local councils by obligated packaging producers; the actual recycling of packaging waste will be funded by producers through the PRN system.

The collection and recycling of business packaging waste, for now, will be funded by the businesses that dispose of the packaging waste.

How will EPR impact businesses?

Producers, brand owners and importers will be impacted by EPR; it is inevitable that costs will increase under an EPR system, plus more complex data recording and increased demand of submission requirements.

Producers, brand owners and importers who place over 50 tonnes of packaging on UKs markets and have a turnover that exceeds £2 million annually are liable for the additional costs and data requirements under EPR.

Businesses that do not meet the 50 tonnes of packaging placed on the UK market and have below a £2 million annual turnover are exempt from the payment aspect of EPR however, under the new system these smaller producers may be required to gather and submit detailed packaging data. Any producers, importers and brand owners with more than a £1 million turnover, who handles 25 tonnes of packaging annually will have reporting obligations.

How much will EPR cost to businesses?

EPR will change the way that costs of compliance are spread throughout the supply chain.

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

EPR will replace all of the above with a single point of compliance that levies 100% responsibility for a piece of packaging onto one business – that business will be the brand owner or importer – most often this will be the pack filler, or the business that specifies the pack filling. For secondary and transit packaging, the brand owner will be regarded as the pack filler.

Because the 100% responsibility will now sit with one company, this means that often a pack filler brand owner of primary packaging may see their share of cost move from 37% to 100%, almost 3 times increase in the volume of packaging they now need to fund. For those companies that formally picked up the packaging manufacturer, converter, or seller of primary packaging, their responsibility for primary packaging will now be zero.

So, for the part of EPR that funds the recycling process through PRNs the biggest change is in the percentage responsibility for PRNs – previously pack fillers funded roughly 1/3 of primary packaging, and under EPR, those that are brand owners will fund it all. So, an increase for those companies in their recycling obligations.

How will Local Authority funding change after EPR?

Whilst PRN funding changes in percentage, the biggest change in financials under EPR is the move to fund the full net costs of collection of household packaging as well. The costs of this are estimated at roughly £1.4 billion, so when spread amongst all the brand owners that produce household packaging, costs for these brand owners are likely to exceed 5 times the cost of their current compliance, but also, as the new single point of compliance they will now take 100% responsibility for their packaging, so real time costs might be as high a 13 to 15 times their PRN costs

How to prepare for EPR?

To prepare for EPR and achieve a seamless transition to the new system you must:

Questions about EPR?

Looking for further support in order to prepare your business for EPR or have further questions on the topic? Please get in touch using the form below a member of our team will aim to respond as soon as possible.







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