How does the UK get to a fully functional EPR?

The Government’s decision to replace the Packaging Waste Regulations with a new form of EPR reflects an ambition to adopt the producer-pays principle, to ensure the full cost of recovery and recycling of packaging is achieved. While Defra is still deciding exactly how the fees will work, we know producers will pay a fee determined by the volume and modulated according to the type of packaging they are putting onto the market.

The implementation of the policy has been riddled with delays. The data-collecting requirements for EPR came into force in January 2023. Originally, large producers were expected to report this information to the Environment Agency twice a year starting from October 2023. The first round of producer fees was originally expected for 2024, but these were delayed to October 2023. Defra also announced that it would not begin enforcing data reporting until 31 May next year – although hopes producers will still comply.

Progress is so slow that a government report released in July this year rated collections and packaging reforms – which EPR is a part of – as ‘red’, meaning unachievable by 2027.

How is the data collection for EPR going so far?

“The data reporting system is really struggling at the moment. It’s been poorly developed and the type and extent of data producers are expected to report is too complex,” notes Phil Conran, Director at consultancy 360 Environmental.

A recently closed consultation called for responses on how well the findings of the previous consultation were represented in the legislation for EPR. From a general sense, the industry seems to feel that the issues have been captured fairly well but it is when it comes down to the finer details that it crumbles. Even if one small element is missed or badly written, EPR becomes a nightmare to follow and enforce.

There is a lack of clarity when it comes to issues such as how producer fees will be calculated, the level of future recycling targets for each material, or who the scheme administrator will be. Conran observes that more needs to be done: “Currently, there’s enough on the bones of the legislation to go forward, but the system is left with some huge gaps – mainly for producers who are confused by the extraordinarily complex data requirements.”

The amount of data companies are expected to submit is extraordinary. Defra is trying to gather information that could inform future reforms – such as a deposit return scheme (DRS) – as well as EPR. Commenting on the delay, Conran adds: “I think Defra has realised that the data complexity adds little to what they're trying to achieve.

“EPR is essentially about separating household and non-household packaging so that the producer can pay local authorities for the costs associated with collection and disposal. But the data reporting requirements are not just ‘household’ and ‘non-household’, you have primary, secondary, tertiary, shipment, little, DRS packaging, and so on.”

“If you look at the spreadsheets, producers are required to submit over 1000 cells of information – whereas the current system has about 120. For me, it’s complexity for the sake of complexity; not necessity.”

A further example of a lack of clarity exists around terms like ‘household packaging’ and ‘primary formats’ when classifying data – which could include anything from a PET bottle to a barrel of beer. These need to be defined separately as the PET will be categorised under household waste whereas the barrel would be exempt from EPR and will not need local councils to be funded to collect it. The way the legislation is written lumps all primary packaging together. As it stands, Defra has knitted the definition of household packaging and primary packaging, creating confusion for producers.

The new data system was developed in-house by Defra and requires the bi-annual submission of a CSV file – whereas the current system uses an online form. There have been a whole host of teething issues. 360 Environmental has found that when an email address has been used to create one form, it then cannot be reused. This creates a problem for consultancies that need to submit on behalf of multiple clients.

“It’s as though someone has sat down to develop the IT system without any knowledge of how the current data system works,” comments Conran. One inference is that Defra may need the time afforded by the delay to sort out these issues.

Hope is not lost for EPR

While the industry is clearly frustrated over EPR, there is still hope that the scheme could have a positive impact. Legislation is particularly difficult to pass in the UK, so it’s not irrelevant that there is now draft legislation that will (eventually) enforce data reporting.

The good news is that despite the previously mentioned issues around complexity and clarity, the industry is likely seeing some of the benefits of EPR already.

Robbie Staniforth, Innovation and Policy Director at Ecosurety, said: “Quite often, it's thought that this is going to be a net win for local authorities – that they get ‘free money’. Well, I just don't think it's going to be the case given the way that Defra designed the system.”

The benefits to local authorities will mostly be in changing formats of packaging being placed on the market so producers pay smaller fees. Some big brands will make these changes sooner given consumer pressures and the promise of EPR, but it is yet to be seen how this will play out. It’s possible that producers will find a way of being completely outside the system rather than paying modulated fees - for example, by moving away from single-use and towards reuse models. With this in mind, it’s possible local authorities are already seeing the impact of EPR through formats of packaging that are easier to recycle and reduced volumes of packaging.

Although many people have lamented the delayed enforcement, Staniforth notes that it might not be as serious an issue as some people think: “Even if they had enforced it, it was a couple hundred pounds fine if you were late. So it didn’t really have much teeth anyway. It wasn’t like the Environment Agency was going to be flying around trying to bring producers into compliance straightaway.”

One of the best parts of EPR is the modulated fees and how they will hopefully incentivise the switch to better packaging which is likely more recyclable. This is likely to benefit both waste management companies and consumers who want to make more sustainable choices.

Lee Marshall, Policy and External Affairs Director at CIWM, notes that despite delays, there has been significant progress: “Because of the delays, we're not where we thought we would be. But, the data reporting has come in, work is moving forward on the scheme administrator, and we've got an idea of when the payments will kick in.

“I wouldn't go as far as to say the glass is half full, but EPR is certainly moving forward. I think we need to remain positive.”

At this stage, it’s hard to make an overall judgement on EPR as the industry is prospectively judging how well the legislation is written – not how well it is governing the flow of packaging in practice. It does seem however that there are the bare bones of what could be an effective system – if the key issues are addressed.

Are there more delays in the future?

Phil Conran feels that EPR needs a fundamental reconsideration – that Defra simply cannot tinker around the edges as this will continue to confuse people further. Most likely the system needs to be made a lot simpler in its first few years to get it up and running. 

Another issue is the lack of a clear timeline for collections consistency, which was originally set to come into effect in October 2023 but now has no implementation date attached to it. As set out in the Resources and Waste Strategy, EPR is intended to fund the consistent collection of recycling across England – now renamed ‘Simpler Recycling’ - but this has also been subject to delay on the part of Government Ministers.

Marshall said: “Until we know the timeline for consistency, we can get a lot of EPR stuff in place but we can’t get the funding flow right.”

Staniforth warns: “We need to remember that the precariousness of UK politics is going to play into any timeline we currently have for EPR. As every month passes, we need to stop ignoring the fact that there might be a change in government that interrupts its introduction. A change in government right slap-bang in the middle of the timeline could definitely be a problem.

“It could also be something that works to improve EPR – but it definitely won’t help to speed things up. It’s unlikely a new government will come in and agree that it is all exactly spot on and speed up delivery.”

At best, a new government might take the time to fix the issues and continue at a steady (but likely still delayed) pace. At worst, they might start all over again and the timeline will completely reset. So yes, more delays are likely.

Regaining the trust of the industry

There’s still widespread support for the ideas behind EPR from across the industry, but the unfolding of events that have led up to this stage has resulted in a lack of trust and faith in its delivery.

Staniforth says: “Everyone agrees that the UK is behind in terms of producers being responsible and we need to rectify this as soon as possible.”

Conran summarises: “It’s frustrating. It's been five years in the making and yet suddenly everything is being put on hold. And now they're rushing in to try to turn around what is – at the moment – almost an unworkable system into something that's going to operate.

“No one takes issue with the principles of EPR, it's the detail of how those principles have been applied and the gaps that we've still got that the industry has a problem with.”

Staniforth added: “What they're trying to do is half keep the PRN system that everyone has fed back is not working anymore. And then, they're also trying to find a way to divide the massive bill of collecting waste from people's houses between all the producers in the UK.

“And so rather than do something new and transformative, they're trying to be all things to all people – which means it's all just a bit watered down and probably not going to serve its purpose.”

Marshall also points out that there are calls across the industry for DRS to be paused so that Defra can get EPR and Simpler Recycling up and running. He said: “Let's delay DRS and get consistency and EPR in. We can then revisit DRS. It's not never, it's just not now.

“And actually what that gives us the ability to do is focus on getting EPR right. It keeps the cost for producers down for the moment and makes it slightly simpler for the public.

“And it gives us time to figure out whether we can do a digital DRS that utilises the kerbside infrastructure, which again has the potential to keep it simple for residents, make waste services more cost-effective and reduce the cost to producers.”

Although delays are frustrating and everyone involved – likely including those within Defra – will wish that these issues had been ironed out years ago, it does seem that there is no choice but to continue taking time to bring more clarity to the system.