As the UK Government continue work to reform the UK packaging producer responsibility system it is vital that businesses understand the ramifications of changes, not least because of the associated increased cost and data requirements.
There are a number of new regulations in the making all of which will impact one another. Much terminology is being used around these regulations, so here is a glossary to aid your understanding:
EPR - Extended Producer Responsibility
Extended Producer Responsibility aims to deliver greater resource circularity by making producers more accountable by following the ‘polluter pays’ principle. EPR is expected to be applied in a number of areas in the future including tyres, fishing gear, construction and textiles. However, EPR in the UK will apply firstly to packaging and this is being implemented via reforms to the current Packaging Waste Regulations, which were the first Producer Responsibility Regulations in the UK back in 1997.
Extended Producer Responsibility will put a far greater onus on Producers to move away from a linear model towards a more circular approach.
FNC – Full Net Cost
The government consultation on reforming the UK packaging system has stipulated that producers pay the full net costs of collection, transportation, sortation, treatment and disposal for consumer-facing packaging (including packaging similar to consumer packaging but arises in restaurants or offices etc.). In addition, this must also include communication campaigns relating to recycling and also littering, plus costs for litter and fly-tipping clean up. Furthermore, administration, enforcement and reporting costs must also be covered by producers.
Valpak research suggests that the current Packaging Waste Recovery Note (PRN) system covers just 7% of post-consumer waste management with local councils covering a large proportion. Therefore, producers will bear significant cost increases in an EPR system compared to current levels.
HH & HH-like - Household & Household-Like Packaging
HH & HH-like packaging refers to packaging that is consumer-facing or of a similar type. Material within this scope will face the highest cost increases compared to levels under the current system. When we talk about EPR costs we therefore refer to HH & HH-like.
C&I – Commercial and Industrial
Post-consumer waste management operates very differently to waste deriving from businesses. Local councils are not burdened with costs in the same way that they are with HH & HH-like packaging. Commercial and industrial (C&I) packaging is therefore not expected to see the same level of cost increases as Household or Household-like packaging will need to see in order to meet the requirements.
DRS – Deposit Return Scheme
Applicable to certain drinks containers, the UK’s first DRS is scheduled to begin in July 2022 in Scotland before the rest of the UK in 2023/2024. Packaging that falls into the scope of the DRS will be excluded from the Packaging Waste Regulations and the reformed system to incorporate EPR. Therefore, when we talk about EPR costs it is worth noting that DRS material is excluded.
POM – Placed On the Market
This refers to the tonnage a business is placing on the market. POM could be used with reference any of the above e.g. DRS POM, C&I POM or EPR POM. Remember that they are net of one another, so a EPR POM will exclude anything classified as DRS or C&I. The POM cost will vary depending which system it falls under e.g DRS, EPR, C&I.
This refers to the flow of packaging material onto the UK market and into the UK waste stream. Valpak Consulting has conducted a number of research projects assessing the UK packaging system including Packflow 2025 and Packflow Covid-19.
Modulated fees are a key part of the EPR system which will require producers to pay higher a higher cost per tonne for placing packaging onto the market not deemed widely recycled. The scope of and scale of modulated fees is still to be determined.
This refers to the process of the UK Government consulting with stakeholders before introducing new regulations. It is important that industry engage in this process. Valpak respond to government consultations and include the feedback we receive from our members. We also encourage businesses and stakeholders to respond directly if they wish. See a summary of the first round of government consultations relating to Packaging Reform here.