Cost, compliance and consequence – The UK’s extended responsibility for packaging regime explained

On 1 October 2025 the extended producer responsibility (EPR) for packaging regime came into force. Operated by the Department of the Environment, Food and Rural Affairs, the regime places new obligations on businesses which produce packaging to bear the cost of managing packaging waste from households. This cost was previously funded in part by the producers, which paid around 10%,  with the tax payer, via local authorities, paying the rest. The change reflects the “polluter pays” ethos, and encourages producers to create more recyclable packaging, in turn tackling the fact that the amount of household waste which goes to landfill is not reducing.

A producer will be captured by the scheme if it falls within the definition of either a small or large producer. A small producer has a turnover of between £1 million and £2 million and supplied more than 25 tonnes of packaging in the UK, or its turnover is over £1 million and it supplied or imported between 25 and 50 tonnes of packaging in the UK. A large producer has a turnover of more than £2 million and supplied more than 50 tonnes of packaging in the UK. Importantly, the Government guidance confirms that where an organisation is part of a group of companies which supply or import packaging, the turnover and weight of packaging supplied or imported for all those members should be added together and if the totals meet the criteria for a small or for a large organisation, then each of those members must comply with EPR for packaging (i.e. it does not matter whether they meet the criteria individually). In such a case, parent companies and their subsidiaries can comply with EPR either as a whole group, or through separately reporting for each subsidiary or a mixture of the two (and Government guidance provides more detail on these methods). The scheme does not apply to charities.  

Qualifying producers must register, and then must meet certain reporting obligations In particular, qualifying businesses must report by 1 April 2026 on packaging data for January to December 2025 using the Government reporting service.

Large producers also have to pay a fee depending on the quantity and type of packaging they supply. The money received under the scheme will be distributed by a body called PackUK, to Local Authorities to pay for the costs associated with collecting, disposing of, and recycling household waste. The Government estimates that the figure producers will end up paying will be in excess of £1.1 billion each year.  Initially producers will pay a set figure per tonne of material. Subsequently, the fee payable will reflect the recyclability of the material, meaning that the more difficult it is to recycle the more the producer will have to pay. Certain containers – such as aluminium drink containers - are exempt as they are already covered by a different scheme.

Various concerns about the scheme have been raised by the industries it will affect.  These include worries that businesses producing heavier packaging will be unduly penalised, as will “closed loop” recycling (which is where producers use packaging which has been collected and recycled to create new packaging). Sectors such as hospitality, particularly those that serve packaged food and drink to the public, are concerned that the new rules will place a particularly heavy financial burden on them at a time when they are already under pressure. The scheme has been criticised in Parliament as a “production tax”, and it is also felt to be too complicated. 

If a qualifying business does not comply the Environment Agency has a range of enforcement options at its disposal. Initially, attempts are likely to be made to encourage compliance. Other options open to the Agency include the imposition of “civil” penalties which include a fixed monetary penalty of £1000 for less serious breaches. For more serious breaches a variable monetary penalty may be imposed. The Environment Agency may also serve a compliance notice requiring the business to comply – if fails to more serious action will be taken – or it may agree an enforcement undertaking (a voluntary legally binding agreement) with the business. 

The Environment Agency is likely to reserve prosecutions for particularly poor behaviour or repeated instances of non-compliance. On conviction, the Court will impose a fine, and there is no upper limit on the sum which can be imposed.  Additionally, like many other regulatory offences, if the company has committed the offence due to the consent connivance or neglect of a director or member of management, that individual can be prosecuted alongside the company and, unlike a company, an individual could receive a prison sentence.

In practical terms, qualifying businesses should take prompt steps to check that (a) they have the necessary internal processes in place to comply with their data capture and reporting obligations; and (b) additionally, for large producers, that the figures on their invoice (notice of liability) are correct as there is a mechanism to challenge the fees charged if they are incorrect.  In the event that a business subsequently becomes subject to investigation for non-compliance, taking early legal advice is likely to be key if the best outcome is to be secured. This is particularly important because, even if there is no prosecution, the financial penalties for more serious breaches may be significant as they will be calculated using a stepped approach (based on the format the Courts use) which includes taking turnover into consideration.