PackUK release first draft of disposal fee modulation framework, impacting obligated producers from 2026 onwards

During the Circular Economy Joint Stakeholder Forum on 1 April, PackUK, the Scheme Administrator, revealed a preview of the potential fee modulation framework under packaging Extended Producer Responsibility (pEPR). This modulation framework will be applied in 2026, to packaging placed on market in 2025. This follows the release of the first publication of the Recyclability Assessment Methodology (RAM) in December 2024, with a reconsidered version RAM 1.1 expected to be released later in April. Please be aware the fee modulation framework discussed below is subject to change, with a finalised policy statement due in June. 

What is a disposal fee? 

• Under the new pEPR Regulations (learn more about pEPR here), alongside Packaging Recovery Notes (PRNs), obligated producers will be required to pay pEPR ‘disposal fees’ on all their reported ‘household’ and ‘commonly ends up in public bins’ packaging 
• The current iteration of base fees is available here, with ‘final’ base fees for 2025 (packaging placed on market in 2024) to be released in June. 

What is modulation? 

The table below shows a summary of the evolution of disposal fees and modulation, giving a side-by-side comparison between Year 1 (2025/2026 fees) and Year 2 (2026/2027 fees). 

2025 – Year 1 of disposal fees (based on packaging placed on market in 2024) will be charged as per large producer bi-annual submissions for household and public bin packaging and the different material categories (e.g. Paper or Card, Fibre-based Composites, Plastic, Steel, Aluminium, Glass, Wood, and Other), at a flat base fee rate. Government will notify producers of the final disposal fee rates in June 2025, and they will be charged from October 2025, to be paid in quarterly instalments in November 2025, January, April, and June 2026. 

2026 – For Year 2 of disposal fees (based on packaging placed on market in 2025) large producers will have to start applying the RAM to their household and public bin packaging. The Red, Amber, or Green output is reported in their bi-annual submissions which will inform fee modulation from 2026 based on the recyclability of their packaging. Packaging that is difficult to recycle at scale in the current UK infrastructure will be classed as ‘Red’ and will receive a fee increase, while packaging that is widely recycled will be classed as ‘Green’ and will receive a discounted fee. Invoices will be raised in July for 2026 onwards with quarterly payments in August, November, February, and May, and will include fee modulation based on the Red, Amber, and Green household and public bin packaging in producers’ submissions. 

Further reading: 

You can find the current guidance on the RAM on Gov.uk. As discussed above, it is expected a refined version (RAM 1.1) will be released imminently which will hopefully include simplifications and clarifications for Year 2 of disposal fees to help producers develop their systems and become compliant under the evolving regulations. 

The first peek at modulation 

On 1 April 2025, in the Circular Economy Joint Stakeholder Forum, PackUK presented the first look at potential modulated fees for the coming years. 

Certain principles have been taken into consideration for modulation including incentivising producers to use recyclable materials in their packaging, making sure resultant fees reduce the risk of producers switching their packaging materials to less sustainable or less recyclable materials. PackUK have also considered that pEPR and the RAM align with other policies and reforms in all four UK nations, including the incoming Deposit Return Scheme (DRS) and amendments to the UK Emissions Trading Scheme. 

In developing the modulation, PackUK are keen to stress that this is not meant to be punishing for producers but is there to encourage and incentivise producers to move to more recyclable materials in line with plans for a circular UK economy. 

Under this first draft of modulation, materials classed as ‘Red’ will face a percentage uplift in fees consistent across all materials, and ‘Amber’ will be set to the base fee. The money raised from ‘Red’ packaging across all materials will be then placed into a pot to be divided amongst ‘Green’ packaging across all materials to give a single ‘discount’ percentage across all materials. This could, in effect, mean that the extra money raised from ‘Red’ plastic would go to subsidise ‘Green’ glass, for example. 

In 2026, for packaging placed on the market in 2025, packaging defined as ‘Red’ will potentially face a 20% increase to the base fees. This is expected to increase as pEPR implementation continues, with estimations projecting a 60% increase in 2027 and a doubling of the base fee in 2028. The discount for ‘Green’ packaging would therefore be calculated based on the split of all ‘Red’ and ‘Green’ packaging from all producers submitted for a compliance period. 

It is interesting to note that this 20% increase for 2026 is a relatively low modulation compared to other countries in the EU, with a doubling of the base fee by 2028 being a much more ambitious target. Comparatively, many countries in Europe only have modulated fees on plastic, whereas in the UK all materials will be modulated giving the ability for ‘Red’ packaging across all materials to subsidise ‘Green’ packaging across all materials. 

Here are some illustrative fees based on this first report from PackUK, considering differing modulation scenarios. The ‘Green’ discount is for illustrative purposes only and PackUK will release final modulations in June when the data submitted by producers has been fully analysed. Please be aware the fee modulation framework discussed below is based on estimations and ‘illustrative’ base fees, so will be subject to change, with a finalised policy statement from PackUK due in June 2025. This table provides obligated producers with a very rough estimation of the disposal fees faced across implementation of modulation.  

*NA for Wood and Other as there are no ‘Green’ scenarios presented within the current RAM methodology. 

A reminder this is the first publication of the RAM fee modulation framework. PackUK expect to share the final base fee and modulation statement in June 2025. All figures and prices are therefore subject to change. 

If you want to learn more about the pEPR and the implementation of RAM, please contact your dedicated Beyondly Packaging Team or solutions@beyond.ly. Beyondly can help to review your packaging now to reduce costs later.