The UK’s EPR conundrum: Harmonizing, financing and raising industry awareness

09 Feb 2023 --- UK packagers have been obliged to collect data on their product origin, weight, trade and other parameters since the start of the year. This is the government’s first step to implementing a comprehensive extended producer responsibility (EPR) scheme by 2025. However, industry experts are conflicted over the plans, which differ fundamentally from EPR designs in other countries.

PackagingInsights speaks to consultants at Ecoveritas and Ecosurety, as well as Thomas Lindquist – the man who originally conceptualized EPR in 1990. Each of these experts believes EPR has in many ways failed but is positive about the concept’s future as a policy tool for improving environmental sustainability and holding businesses to account for their role in pollution.

Ecoveritas’ chief strategy officer, Andrew McCaffery, says: “With required actions under EPR finally underway, outlining how the new regulation will work in practice for UK businesses that must comply with this new legal requirement must become our priority.”

“We must move beyond discussing its merits and instead help businesses unpick the intricacies in already challenging times.”

McCaffery asserts that EPR can and should create a circular packaging economy that prioritizes source reduction and reuse above recycling. “Well-designed EPR is a service charge for the collection, sorting and processing. When you look at other policy solutions, it has proven to be one of the most efficient and effective ways of tackling the problem,” he asserts.

“It provides the ongoing and sufficient funding scheme we need when designed correctly. It drives the proper environmental outcomes by putting money into the right places. Money that’s raised in the system stays in the system.”

Packagers will soon need to pay for the environmental damage caused by their products.Data collection, fee modulation
In December, the UK government began requiring British businesses that handle or supply packaging to begin collecting relevant data on product origin, weight, trade and other parameters by January 2023. If relevant data is not presented by January 2024, businesses could face financial penalties.

Data aggregation was introduced as a postponement measure to prepare the packaging industry for potential fees based on complex guidelines. There are fears by policymakers that confusion will result through the intricate costs and varying requirements assigned according to different sizes and turnovers of any given company, along with the materials they use.

However, there has yet to be any clear indication of how fee modulation will work, which is a crucial part of any EPR system, according to Ecosurety. Fee modulation will determine cost rates according to packaging material types. Companies will be effectively penalized for using environmentally damaging materials or rewarded for transitioning to more environmentally sustainable design options.

“Without [eco-modulation] there is no incentive for producers to ensure the packaging they place on the market is more recyclable, which the government stated was a key objective of the packaging reforms alongside local authority waste management payments. An integral part of EPR systems globally is eco-modulation of some form,” says Louisa Goodfellow, a policy adviser for Ecosurety.

Establishing costs, ensuring harmony
In the EU, establishing eco-modulation rules is central to Brussel’s plans to protect its Single Market and ensure effective enforcement between the 27 Member States. Economic incentives and minimum reusable design guidelines have been established for industry players to achieve between 2025 and 2030.

Collecting data ahead of the UK EPR laws is mandatory for British packagers.In the UK, the situation is different, despite the beginning of data collection. “Again, it is crucial that we will have a clear indication of producer costs as soon as possible,” says Goodfellow.

“Without these businesses placing packaging on the market, they have no clear incentive to look at their material use and overall packaging formats more closely. This needs to be coupled with clear guidance and decision-making on data requirements.”

Harmonization, as emphasized in EU legislation, is also needed, Goodfellow continues.

“Taking the packaging reforms as a whole, there are concerns around interoperability between the four nations (England, Wales, Scotland, and Northern Ireland). This could risk the environmental benefit of the legislation if the devolved governments don’t collaborate to ensure workable systems.”

“Another difference in the UK system compared with other case studies is that the public sector will entirely manage overall scheme management. In the main, private industry tends to have some involvement, so there is a vested interest in operability, but due to the nature of local authority waste payments, the private sector cannot legally become involved,” she emphasizes.

Lindquist on the UK
Thomas Lindquist, a Swedish researcher, conceptualized EPR in 1990. He recently spoke to PackagingInsights about how the idea has developed and been implemented. He remarks that the UK has chosen a different approach. “Sometimes I was wondering why,” he says.

Sorting data is essential to allocating EPR costs and presents a challenge for many countries. “Theoretically, it’s a kind of intriguing system with competition elements. The problem is to do it in practice in a good way is extremely difficult and may cost a lot of money. Some people and consultants (that I met) working with UK companies have confirmed this.”

“Then I have always imagined that some of [those problems] would be solved. You automate systems and you don't have the same information barriers and access to information. It becomes computer programs and similar and both costs go down.”

“Whether and wherever you manage to keep track of data and those types of things, I don’t know. I can see other countries who try to have elements of this. For instance, Lithuania and Poland decided that they couldn’t manage it based on too much cheating and difficulties around it. So they left it,” he explains.

“I’m not based in the UK and I don’t think so much about the UK’s influence on the rest of the world and its environmental influence, but I would say it’s cleverly done in a sense. If we can stall it we can work earlier with the minimum requirements from Brussels.”

Private versus public
Lindquist agrees with Goodfellow that private sector involvement is lacking.

“I kind of like certain things when I look back on their history, but one of them is the question about us introducing deposit refunds in Sweden. What I like is that the government managed to stay out of most of the things,” Lindquist says.

“There were certain things they had to do. The Swedish government had to kind of put up laws which forced you to be a member. They kind of realized with time that they also have a role in enforcing this and making it happen. You can’t, as a private entity, deal with the ones who are not members. So if someone manages to stay outside and doesn’t do what you are supposed to do, it’s only the government who can deal with it.”

Regardless of how the UK government manages to steer the private industry toward legislative targets without becoming too involved, Goodfellow emphasizes that at this point, British businesses must become more aware of what is coming.

“Although we agree that small businesses would be unduly burdened by the financial obligations that larger producers will pick up, it’s presently unclear as to whether this cohort of businesses will be aware of their new reporting responsibilities, given many of them will have never interacted with packaging producer responsibility before,” she says.

“The EPR legislation will also require that this financial obligation reverts to large producers along the supply chain. How this, and the single point of compliance generally, will work in practice is something that all obligated producers need to be aware of and understand as soon as possible.”

By Louis Gore-Langton

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