The United Kingdom Government has introduced proposals under the Extended Producer Responsibility (EPR) Scheme to require producers to pay the full costs of dealing with the packaging waste that they produce. Along with the plastic packaging tax that will go in effect next year, it is likely to have significant implications for all businesses handling plastic packaging. In the first year alone under the new EPR Scheme, the Government estimates that the waste management costs to producers will be around £2.7 billion, equivalent to approximately ten times more than the costs they face under the current scheme.
“The aim is to incentivize recyclability and reusability of packaging by rewarding, or penalizing, producers under a system of ‘modulated fees,’ based on the positive or negative aspects of the packaging they use,” said Jessica Gardner, a director in the regulatory group at European law firm Fieldfisher.
She added: “The Government is looking to introduce a ‘single point of obligation’ where a single producer is obligated to pay the full net costs of managing a piece of packaging. Rules would apply to determine whether, for example, the brand owner, importer, distributor or online seller of any given product pays the costs of waste management depending on their role in the supply chain for that particular product.”
The full net costs would include the collecting, sorting and recycling of packaging waste from households and businesses, along with litter and refuse management costs, including bin and ground litter. It is expected that the bulk of the costs will fall on brand owners. That is the manufacturers of products produced and packaged in the UK under a brand name, including private label or “own brand” products. However, the impact will inevitably be felt by many other businesses further down the supply chain, as producer costs are likely to be passed on.
The Government proposals indicate that producers would pay modulated fees based on the tonnage of packaging they placed on the market in the previous calendar year. Payments would be made quarterly, in arrears, to local authorities for the provision of waste management services for household packaging waste and to other waste managers and businesses for the collection and management of household-like packaging waste.
Gardner stressed that responding to the consultation is an opportunity for producers to have their say and to influence the direction of the Government’s proposals, which once they become law, are likely to be here to stay for the long-term.
“Producers should also begin assessing the sustainability risks associated with their packaging now in order to future-proof their business and their operations,” Gardner added.
The clock is ticking. Businesses have until June 4, 2021 to respond to the Government’s Consultation on the new EPR Scheme.
In addition to the UK, he Fieldfiser law firm has offices in Belgium, China, France, Germany, Italy, Luxembourg, the Netherlands, Ireland, Spain, USA and other countries. Its global staff numbers more than 1,500 people.