What is Extended Producer Responsibility and how does it impact my small business?
The reform of the current packaging Producer Responsibility regulations to a system of Extended Producer Responsibility will bring a new requirement for smaller businesses that have never been obligated in these packaging regulations before. Small businesses that meet a certain threshold will have to pay an annual fee to the regulator and report annual packaging data.
This article intends to give newly obligated small businesses an overview of Extended Producer Responsibility, help them determine if they are obligated under EPR and inform them of the role they will play, and the action they need to take as part of this new system.
What is Producer Responsibility and Extended Producer Responsibility?
Producer Responsibility and Extended Producer Responsibility are both policy approaches used in the waste management field.
*A producer is an organisation that manufactures, handles, utilises, or sells a certain type of product/goods that will become waste
Currently, there are Producer Responsibility regulations in place in the UK for packaging, electrical and electronic equipment (EEE), and batteries. Companies that meet certain thresholds must comply to these regulations, which involves (1) submitting data on the amount of packaging/EEE/batteries handled or placed on the UK market and then (2) offsetting this amount through the purchase of evidence notes that demonstrate 1t of recycling of packaging/EEE/batteries has occurred. Through this system, the producers of packaging/WEEE/batteries handling and placing them on the market contribute to funding the recycling of these items when they become waste.
Packaging Producer Responsibility
Under the current packaging Producer Responsibility regulations, producers do only make a contribution to the full net costs of managing packaging when it becomes waste. The remaining costs are funded by Local Authorities through taxpayer money to collect our household packaging waste (see example diagram below), or private waste management companies paid for by businesses to collect commercial packaging waste.
Extended Producer Responsibility transfers the responsibility of full net costs of managing packaging waste to the packaging producers, extending that current responsibility of funding a contribution, to funding the full net costs instead.
Packaging Extended Producer Responsibility (pEPR)
The Government have consulted on implementing the Extended Producer Responsibility approach for packaging twice. We received their latest consultation feedback in Spring 2022, outlining how pEPR will be implemented from 2024 replacing the current system. It stated that the thresholds to be obligated in the current packaging Producer Responsibility system will remain for pEPR.
A company must meet both thresholds:
- Annual turnover of £2 million or more in most recent annual accounts
AND
- Handle 50t or more packaging during a calendar year
Where do small businesses come into packaging Extended Producer Responsibility?
A lower threshold will be introduced to bring smaller businesses into pEPR; those businesses exceeding this threshold will be referred to as a ‘small organisation’. This lower threshold will apply to companies that meet one of the following:
- Annual turnover between £1 - £2 million and handle and supply over 25t of packaging through the UK market in a calendar year
OR
- Annual turnover over £1 million and handle and supply between 25t and 50t of packaging through the UK market in a calendar year
Your annual turnover should be based on your most recent annual accounts.
What does it mean to ‘handle’ packaging?
Handling means you do all of the following:
- carry out one or more of the activities in the activity list or have these activities carried out on your behalf
- own the packaging on which the activities are carried out
- supply packaging or packaging materials at any stage in the chain or to the final user of the packaging
You are not handling packaging or packaging materials you use internally within your business.
Activity list:
- raw material manufacture – produce raw materials for packaging manufacture
- packaging conversion – convert raw materials into packaging
- packing or filling – put goods into packaging or put packaging around goods
- selling – supply packaged goods to the end user
- importing – import packaged goods or packaging materials from outside the UK, including raw materials that will become packaging, such as plastic pellets used to make bottles
- service provider – a business that supplies packaging by hiring it out or lending it
So what does my small business need to do?
To comply with the regulations, you must:
- take steps to record data about all the empty packaging and packaged goods you handle and supply through the UK market from 1 January 2023
- register for the EPR for packaging online service (registration opens for small organisations in 2024)
- pay an annual fee to the environmental regulator from 2024
- submit data about empty packaging and packaged goods you handled or supplied through the UK market throughout 2023
You’ll need to submit your data between 1 January 2024 and 1 April 2024. If you miss the deadline, you may need to pay a penalty charge.
Please see our timeline below to visualise these requirements:
If your business meets that lower threshold to class as a ‘small organisation’ in EPR and would like to find out how Comply Direct can support you, please do get in touch at consultation@complydirect.com
Alternatively, join us on our upcoming webinar Extended Producer Responsibility (EPR) – The newly obligated! on Tuesday 13 September where we will share any updates from DEFRA on the impact on small business and go further into detail on what you will need to do come implementation. Click here to register your place.