In 2021, a consultation which continued a previous consultation from 2019 started. The consultations aimed to reform the Packaging Producer Responsibility system. In the second consultation, the government set out its final proposals for the new system. The new system focused on the specific mechanisms for the introduction of Extended Producer Responsibility (EPR).
Extended Producer Responsibility (EPR) hopes to incentivise producers to design packaging that is easy to recycle by ensuring that they pay the full net cost (FNC) of managing their packaging once it becomes waste. This is a significant change from the current system, which only covers the recycling of packaging waste.
The full net cost (FNC) includes the cost of collection, recycling, disposal, the clearing-up of littered and fly-tipped packaging, and communications relating to recycling and tackling littering.
Who will pay the EPR tax?
Under the new Extended Producer Responsibility tax, companies will pay based on the amount of packaging that they use throughout the year. The tax, which will come into effect on 1st January 2024, will be an extra incentive for businesses to use the right size packaging for each product, as they will be charged more for excess packaging.
There are going to be 2 types of obligations for companies under Extended Producer Responsibility (EPR):
- Obligation to pay the full net cost (FNC)
- Obligation to report where packaging is placed on market (POM)
In a change to the current system there will no longer be a packaging activity chain (Manufacturer, Convertor, Packer/Filler, Seller, and End User). Instead, there will be a single point of compliance.
This single point of compliance will require companies to pay the full net costs (FNC) and include:
- Brand owners (those whose brand is on the packaging) or the packer/filler
- Importers of packaging or filled packaging
- Distributors/Wholesalers selling packaging to companies under the thresholds
- Online Marketplaces selling goods surrounded by packaging into the UK
- Service Providers who rent, hire or lease packaging
Under Extended Producer Responsibility (EPR), anyone selling packaged products in the UK will be obligated to comply with mandatory labelling requirements regardless of the size of their company. In addition, companies who supply people who remove the packaging from goods (end users) will have a new obligation to register and report the amount of packaging placed on market (POM) by nation.
The cost to business is set to rise substantially with the current system costing UK companies between £200-£300mil a year. Extended Producer Responsibility (EPR) is set to cost somewhere in the region of £1.7bn, this coupled with a single point of compliance will mean costs for companies could easily increase 10 to 30 times.
How can Right Size packaging help?
With the Extended Producer Responsibility costs expected to soar, it will be crucial for businesses to review their packaging costs and where they can be reduced. Right Size solutions allow you to reduce waste, ensuring your packaging fits your product exactly, all while helping the environment too.
Right Size solutions combine Ribble’s industry leading Fanfold material and state of the art technology to create the perfect size box for all your products.
We have a simple 4-step process for our Right Size solutions.
- Enter your box style and dimensions.
- Select how many you require.
- The box is produced within seconds.
- Your products are packaged in the perfect sized box.
By saving on fuel and transport costs, regaining warehouse space, saving on labour costs, you can reduce your packaging costs by 30% and support our planet.
