This legislation has been introduced from the beginning of 2023. Purpose of this legislation is to reduce the amount of packaging used and increase recycling rates in Great Britain and Northern Ireland.
Recycling rates have gone from 25 % in 1997 to 64% in 2017 but have since stagnated. The new legislation is aimed at providing an infrastructure to increase recycling rates. Currently it is a post code lottery as to whether certain pack types are kerbside recyclable. The objective is to improve the circular economy for packaging, and to have a homogeneous kerbside recycling for all packaging types.
“There is a need to stem the flow of packaging which goes
unrecycled and is lost forever to landfill and incineration.
Packaging materials that are not recycled back into new
packaging harm our natural environment”.
This objective aligns with the UK Environment Agency which has set out one of its long term goals to have healthy air, land and water.
An ongoing commercial historical issue, is that the cost of packaging has no provision to pay for associated recycling costs. Even though recycled plastics save significantly reduced amounts of emissions, some estimates have concluded that recycled plastic costs an average of $72 per ton more than virgin plastics.
There is another reform brought about by Extended Producer Responsibility (EPR). Currently the costs of dealing with packaging waste are paid for by local councils. From Jan 2023, firms that supply packaging are responsible for the costs of dealing with packaging waste, moving costs away from councils and council taxpayers.
Producers will be required to pay for the collection and disposal costs of packaging they supply when it becomes waste. This will encourage producers to reduce the amount of packaging they place on the market, and to improve the recyclability of their packaging – in turn ensuring less waste ends up in the natural environment.
WHAT WILL BUSINESSES HAVE TO DO
Primarily establish if they are obligated . If you produce 25 – 50 tonnes with a £1 Million + turnover you are a small producer. If greater than 50 tonnes of packaging you are classified as a large
producer. For further details consult with Govt advice.
Obligated organisations will have to submit data to the environment agency once or twice a year for small and large producers respectively.
Information is detailed in bullet points below, with hyperlinks to the government document which explains in more detail.
• The type of entity buying and using packaging for its products (6 categories in total) Click on link for further details.
• Where this packaging is disposed of Household / Non household 9 categories
• What materials are used to make the packaging e.g. paper, metal, plastic, aluminium steel in total etc 15 categories and respective weights
• Broad packaging functionality in terms of how packaging is used to protect and market the product. This is referred to as Packaging class. There are 9 classifications in total
• Geographical location where the packaging is packed around the product & where it is disposed of.
The above date will give the Environment Agency detailed information they do not currently have for the 12 million tonnes3 of packaging placed on the UK market, some of which contains plastics that are hard to recycle. The introduction of EPR for packaging could be a game-changer. When done effectively, it will reduce the impact packaging has on the environment by regulating material use and increasing recycling.
WHAT WILL IT COST BUSINESSES
DEFRA have announced the money needed to be raised will be £2.7 billion to fund necessary activities. Cost per tonne has not been announced by DEFRA. Government press releases have been communicated about this forthcoming on cost to manufacturers explaining there will be a significant uplift which is currently paid today for Packaging Recycling Notes.(PRN) The current PRN subsidises current recycling. Let’s recycle have estimated costs for EPR to increase by a factor of five plus a factor of 2.7 for brand owners as they have sole responsibility for the levy. Currently for PRN the levy is shared with other suppliers in the supply chain, so they currently pay 37 % of the PRN levy. Whereas they will pay 100 % of the EPR levy.
• PRN is only paid by organisations using more than 50 tonnes of packaging per year.
Extrapolating the data from lets Recycle for paper and plastic we have the following scenario
Recycling mean cost for plastic (Packaging Recovery Note (PRN) = £220 / tonne Currently brand owners that fill pkg pay 37 % of this fee. However for EPR fee brand owners will pay 100 %
It is estimated that EPR will be 5 times the current PRN/
I would add a word of caution these are estimates and may not reflect reality. The message to take from this is that there will be a significant increase in the cost for packaging recovery fees, so businesses should act immediately by reducing their packaging and removing nonfunctional packaging.
HOW DO I KNOW MY BUSINESS HAS MINIMAL PACKAGING
Determine the critical areas which will govern the achievable limit for packaging optimisation. This should include the following, each should be analysed to identify opportunities.
1. Protection of goods,
2. Packaging manufacturing process
3. Packaging/filling process
4. Logistics (including transport, warehousing and handling)
5. Presentation and marketing of goods
6. User/consumer acceptance