Valpak launches “hybrid model” for UK-wide EPR scheme

29 Apr 2019 --- Packaging compliance scheme Valpak has put forward a collaborative “PackFlow” approach as an alternative to the Extended Producer Responsibility (EPR) scheme proposed by the UK government. An EPR scheme is one component of the government Resources and Waste strategy consultations, launched in February, inviting industry opinion on how to “overhaul the waste system.” Outlined in a report, PackFlow Hybrid Model – An Enhanced Approach to EPR Reform, the hybrid system is aimed at growing end-markets, recycling capability and minimizing the necessary costs resulting from an EPR system.

The plans set out by the government will see the costs of recycling borne by those that produce packaging waste. Currently, packaging producers pay only around 10 percent of the costs of dealing with packaging waste. By increasing that to cover the full amount, the government hopes to incentivize producers to think carefully about using less packaging and to switch to using packaging that is easier to recycle.

The Director of Consulting at Valpak, Andrew McCaffery, says the combined system represents the best opportunity to develop end markets and encourage meaningful recycling. “None of the models offered in the consultation have focused strongly on ways to develop end-markets. We have a unique chance to reform the system in a way that will redefine the costs around collection and recycling and transform the landscape for packaging. We should ensure that whichever option is chosen represents a robust system designed to meet – and exceed – the UK’s requirements,” McCaffery notes.Under the hybrid model, local authorities would be guaranteed fair and consistent payment, while recycling and end markets are also supported.

To grow end-markets – and recycling capability – long-term strategic investment is crucial, McCaffery insists. Under the hybrid model, local authorities would be guaranteed fair and consistent payment, while recycling and end markets are also supported, he explains.

Speaking to PackagingInsights, Adrian Hawkes, Policy Director at Valpak, notes that the model also “offers the best potential to minimize the significant increase in costs which will result from the requirement for ‘full net costs’ for business.  It will also incentivize the necessary investment in greater reprocessing activity in an economically effective way.”

The 20-page report, which was first introduced at Valpak’s recent PackFlow meeting, attended by government representatives, industry partners and other compliance schemes, summarizes the company’s research into the strengths and weaknesses of the proposed UK scheme. It also covers the successes and shortcomings of overseas systems, and analyzes the pros and cons of the four existing consultation models, before introducing the idea of a hybrid approach that enhances the options outlined by the government.

What does the “hybrid” model propose?
Under the amended, hybrid version, a single not-for-profit organization – producer management board (PMB) – would set a modulated fee that covers the full net costs of packaging collection by local authorities. This would cover approximately 80 percent of total full net costs of recycling while the remaining, smaller portion would help to ensure that focus also remains on meeting recycling targets and producing the necessary evidence of proper recycling activity.

The company notes that the benefits that could come from the scheme include:

• Lower costs and greater transparency for producers;
• Consistent and fair funding for local authorities, with guaranteed outlets for materials;
• Funding for national and local consumer communications campaigns;
• Providing producers with a choice of innovative and strategic packaging recovery organizations
• A target-driven scheme;
• The government retains a strategic overview while spreading risk among packaging recovery organizations;
• Financial support available for strategic investment by reprocessors; and,
• Significant reduction in size and administration of PMB.

“The hybrid adaptation would help us to implement more sustainable systems that meet the requirements – and aspirations – of the circular economy, while allocating funds in a balanced way. The changes we face require careful consideration; ideally with further consultation once the options have been fine-tuned and narrowed down,” says McCaffery.

What else are the consultations proposing?
The consultations also propose a Deposit Return Scheme (DRS) for cans and bottles and a tax on plastic packaging that contains less than 30 percent recycled content. The government will elicit industry opinions on its plans which closes on May 13.The consultations also propose a Deposit Return Scheme (DRS) for cans and bottles and a tax on plastic packaging that contains less than 30 percent recycled content.

On the DRS point, Hawkes notes that “any final decisions should be made on sound cost-benefit analysis. We and others have highlighted a number of flaws in the current Impact Assessment and we believe these should be addressed before decisions are made.”

Earlier this month, an Institute of Economic Affairs (IEA) report warned that a UK-wide DRS would be a “highly inefficient” way to increase recycling and recovery rates. Authored by Christopher Snowdon, Head of Lifestyle Economics, IEA, the scathing report noted that a DRS would increase recycling rates for beverage bottles and cans from 70-75 percent to 85-90 percent, but at a disproportionate cost. 

On the packaging tax, Hawkes says, “whatever is decided it should be fairly applied across all packaging, whether it is UK sourced or imported and whether it is pre-filled or empty. This will give a level playing field and avoid distortions.”

Other industry figures have also voiced concern over the potential tax. Kenton Robbins, Managing Director of PFF, the UK’s largest independent producer of thermoformed plastic for food packaging, notes that applying a degree of pressure to deal with plastic waste is the right thing to do, but that there are hurdles facing the UK recycling industry that will make 30 percent recycled plastic levels difficult for some companies to achieve. 

The consultations will make up a crucial part of the government’s upcoming Environment Bill, which will be introduced early in the second session of Parliament. They also build on existing government work to tackle unnecessary waste and plastic pollution, including a ban on microbeads in personal care products, a five pence plastic bag charge which has taken over 15 billion single-use plastic bags out of circulation and a consultation to extend it to all retailers.

By Laxmi Haigh