Sustainability regulations and the packaging industry

As sustainability regulations increasingly influence industries across the globe, the packaging sector is actively working to advance the circular economy. Regulatory frameworks – such as the widely implemented Extended Producer Responsibility (EPR) and the EU’s Corporate Sustainability Reporting Directive (CSRD) – are driving companies to rethink their practices.

The packaging industry still faces significant challenges in reaching a circular economy. Indeed, only 9 per cent of plastic is recycled worldwide, according to the European Environment Agency, highlighting the enduring dominance of a linear economy and undermining the United Nations’ Sustainable Development Goals.

Sustainability regulations are tackling this issue. To understand how this evolving regulatory landscape is guiding the industry toward a circular economy, we will explore the EPR and the CSRD.

Extended Producer Responsibility

EPR is a policy framework that holds producers accountable for managing their products at the end of their lifecycle, supporting the circular economy by encouraging sustainable product design.

In the UK, EPR applies to businesses, subsidiaries, or groups with an annual turnover of £1 million or more and that supply over 25 tonnes of packaging into the UK market each year. Those with a turnover between £1 million and £2 million are classified as small producers with lighter reporting obligations, while those over £2 million and handling more than 50 tonnes annually are considered large producers and face more detailed reporting and fee requirements.

Under EPR, eligible businesses must meet several obligations to improve packaging waste management and boost recycling rates. These include:

• Data Collection and Reporting: Companies must track and report the types and amounts of packaging they supply to the UK market.
• Fee Payments: Businesses are required to pay various fees related to waste management and the administration of the scheme.
• Recycling Obligations: Firms must obtain Packaging Waste Recovery Notes (PRNs) or Packaging Waste Export Recovery Notes (PERNs) to demonstrate compliance with recycling targets.
• Nation Data Reporting: Businesses must also report ‘nation data’ detailing where in the UK their packaging is sold and where it ends up after use.

From the 2026/2027 reporting year, EPR fees in the UK will be modulated to encourage businesses to choose packaging materials with lower environmental impacts. This means that, even within the same material category, a higher volume of recyclable packaging will incur lower fees per tonne than less recyclable options. For example, recyclable types of plastic or paper will cost less than harder-to-recycle versions of those materials.

Examples of materials that may incur higher fees include polyvinyl chloride (PVC), compostable and degradable plastics, glass with attached ceramics, and paper or card with double-sided lamination. Initially, the base fee rate will depend on recyclability, but over time, the criteria may expand to include factors such as reusability and the overall environmental impact of both producing the packaging and managing it as waste.

Corporate Sustainability Reporting Directive

The EU’s CSRD mandates that all EU-based companies meeting certain thresholds publicly disclose relevant ESG data. This transparency enables investors, civil society groups, consumers, and other stakeholders to evaluate a company’s sustainability performance. The CSRD forms part of the European green deal, which aims to help the EU reach net zero emissions by 2050.

A key part of the process involves completing a Double Materiality Assessment (DMA) which serves to evaluate an organisation’s financial and environmental impact through stakeholder interviews and employee questionnaires. While this process is time-intensive and complicated, it is a key requirement that provides some strategic advantages – flagging to consumers the entity’s decisive position on the green transition.

Currently, a company falls under the CSRD reporting requirements if it meets at least two of the following criteria:

• €50 million or more in net turnover
• €25 million or more in total assets
• 250 or more employees

However, a proposal introduced in February 2025 seeks to ease the reporting burden on smaller businesses. If adopted, the revised thresholds would apply only to companies with over 1,000 employees and more than €450 million in annual net turnover. This change would exempt an estimated 80 per cent of currently affected companies from CSRD reporting.

From compliance to impact: the industry shift under sustainability regulations

Sustainability regulations have moved from the margins to the mainstream, playing a pivotal role in shaping the future of the packaging industry. Businesses are consequently re-evaluating their operations to align with circular economy goals and enhance the recyclability of their products at the end of their lifecycle.

To reduce reliance on virgin resources, companies are increasingly incorporating post-consumer recycled (PCR) materials into their packaging, with a 2022 survey showing that 48 per cent are making this transition. Similarly, the use of Forest Stewardship Council (FSC)-certified papers is becoming more popular, with the number of FSC-certified companies having doubled from 2019 to 2024. It is as a result of sustainability initiatives such as the EPR that businesses are becoming increasingly conscious of how to look after the entire lifecycle of their products’ materials.

As regulations increasingly prioritise recyclability, inks and adhesives are also being re-evaluated by the industry. This has resulted in water-based alternatives gaining favour due to their improved compatibility with recycling processes. Indeed, in 2024, the global water-based adhesives market size was estimated at USD 38.63 billion and is expected to grow at a CAGR of 9.5 per cent from 2025 to 2030.

Equally, mono-material packaging is gaining significant traction for its improved recyclability, as simplified designs eliminate the need to separate or disassemble mixed materials. The rise in this packaging type was shown in a Global Market Insights report which estimated the market's value at USD 10.9 billion in 2024, projecting a robust CAGR of 6.4 per cent, reaching USD 20.2 billion by 2034.

Overall, as we approach critical climate tipping points that risk irreversible damage to our planet, sustainability has moved beyond corporate buzzwords to an urgent existential and regulatory imperative. Encouragingly, regulatory pressures are already catalysing a meaningful shift within the packaging industry toward more sustainable solutions. While there is a long way to go, this transformation signals a hopeful and proactive direction, with the sector committed to reducing its environmental impact and leading the way toward a greener, more sustainable future.

Mike Jones is Head of Innovation & Global General Manager of Intelligent Solutions at Mainetti, a sustainable packaging company.