Extended Producer Responsibility – is it on your radar?

Perhaps this is on your radar, perhaps not but this hidden tax for producers is not one to be ignored.  Finance directors and business owners need to be aware of a potential additional cost taking effect from 1st October 2025.

The Extended Producer Responsibility (EPR) is a policy approach that works on the ‘polluter pays’ principle, thereby making producers responsible for their products along the entire lifecycle, including the post-consumer stage.

The packaging EPR operates through an environmental levy coming into force in October 2025 for larger organisations, generating funding from producers that helps to pay for the collection, sorting, and recycling of waste products, as well as sharing detailed information on production, products, waste generation, and treatment.  

What types of packaging is included?

Packaging EPR applies to all types of material, including glass, plastic, aluminium, wood, cardboard, steel, cork, rubber, and ceramics.

Packaging is defined as any material that is used to cover or protect goods that are supplied. It makes handling and delivering goods easier and safer. It includes anything that is designed to be filled at the point of sale – even a coffee cup.  

How much could the fees be?

Local Authorities will be able to recoup some of the costs associated with packaging waste handling by collecting packaging fees from larger producers. The fees will be based on the amount and type of packaging with the least environmentally friendly paying a higher rate per tonne.

An indication of likely fees per tonne, depending on the type of packaging material, can be found here.

Does EPR apply to your business?

The regulations will apply to a wide range of businesses that import or supply packaging. Your organisation could be affected if all of the following apply -

• you’re an individual business, subsidiary, or group (but not a charity); AND    
• you have an annual turnover of £1 million or more, based on your most recent annual accounts; AND
• you were responsible for importing or supplying more than 25 tonnes of packaging to the UK market in 2024; AND  
• you carry out any packaging activities such as supplying packaged goods to the UK market under your own brand, placing goods into packaging, importing products in packaging, owning an online marketplace, hiring, or lending out reusable packaging, or supplying empty packaging. 

Typical types of businesses that will be impacted include manufacturers, retailers (online as well as high street), wholesalers, and distributers of packaged goods.

How will EPR impact your business?

The key obligations under the regulations are that packaging producers must register their organisation, report packaging data, and ensure their products are collected and recycled or recovered properly.

The impact of EPR depends on whether you’re classed as a ‘small’ or ‘large’ organisation.  

• Small - your annual turnover is between £1 million and £2 million and you’re responsible for supplying or importing between 25 tonnes and 50 tonnes of packaging in the UK.    
• Large - you have an annual turnover of £2 million or more and you’re responsible for supplying or importing more than 50 tonnes of packaging in the UK.    

What action should you take?

If you miss a reporting deadline, you may need to pay a late fee. The next deadline to report data is 1st April 2025.  

If you’re a small organisation you will need to –

• Create an account on the EPR packaging online service.
• Record and report your 2024 data by 1 April 2025.
• Continue reporting annually – 2025 data by 1 April 2026
• Pay a registration fee to the Environment Agency.

If you’re a large organisation, to comply with the regulations you will need to record data about the empty packaging and packaged goods you supply or import in the UK from 2023 and 2024. You should have already reported your data for January to June 2024 by 1 October 2024. You now need to –

• Record and report your data for July to December 2024 by 1 April 2025.
• Continue reporting every 6 months.
• From 1 October 2025, based on 2024 data, pay a waste management fee, scheme administrator costs, and a registration fee to the Environment Agency.

If you’re part of a group, parent companies and their subsidiaries can comply with EPR for packaging in different ways -    

• A whole group – the parent group creates an account and reports packaging data on behalf of each subsidiary that supplies packaging.
• Individual subsidiaries – each subsidiary that supplies packaging creates an account and reports independently.
• A mixture – the parent company reports on behalf of some parts of the group, while other subsidiaries report for themselves.    

If the parent group is reporting on behalf of some or all of its subsidiaries, you will need separate packaging data for each subsidiary. To determine what size companies within a group will be classed as, add up the turnover and weight of packaging supplied or imported for all members of the group that supply or import any packaging. If these totals meet the criteria for a small or for a large organisation, then each of these members must comply with EPR for packaging, regardless of whether or not they meet the criteria individually.    

The Environment Agency can enforce fixed monetary penalty fees for non-compliance so the time to act is now.

• understand what data you will need to collect.  
• undertake a supply chain audit to determine who is responsible for the packaging levy.
• think about action that could be taken to minimise packaging volumes and types of materials.

Further information can be found here.

Next steps

For expert support on the topics mentioned, please get in touch with the Bishop Fleming ESG Services team today and let us guide you through every step of your ESG journey.