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Summary of EPR consultation

22 MARCH 2019

We have produced a brief summary below of the Extended Producer Responsibility Consultation recently published which is due to close on 13 May. 

With proposals for a radical change to the packaging waste regulations that will see costs to producers rise to 10-20 times current costs, local authorities being paid their costs of packaging waste collection and more and a shake up of the management process, the new regulations will have a huge impact across all sectors. We would therefore advise anyone who might be remotely affected and who hasn't looked at the consultation to read our summary to see whether they should respond.

1.         Introduction

The Government is proposing to radically change the current packaging regulations to a new system that would see new regulations taking effect in 2022 and being fully implemented in 2023. This has been laid out in a consultation that requires responses by 13 May 2019.

This has been driven by two key factors:

  • European Circular Economy changes to which the UK has committed.
  • A belief that the existing PRN system cannot deliver on future targets.

The major change demanded by the new EU Waste Framework Directive Article 8a is that producers – businesses that place packaging onto the market – should pay the full net costs incurred by those left with the waste at the end of its life in getting it recycled or otherwise disposed of.

The UK must therefore move towards a system that charges producers based on the cost of waste management, not the cost dictated by whether we will meet targets.

As well as consulting on a revised packaging waste system, the government has issued consultations on:

It is expected that there will be a second EPR consultation in early 2020, so the outcome of this one will be to narrow down the options to probably a single preferred position. IT IS THEREFORE VERY IMPORTANT THAT YOU READ AND RESPOND TO THIS CONSULTATION if you are currently:

  • A producer
  • A reprocessor or exporter
  • A waste management company
  • A local authority
  • A regulator
  • A compliance scheme

The EPR Consultation is 125 pages long and contains 92 questions. It is divided into 11 main sections covering:

  • An explanation of ‘full net cost recovery’ – who it applies to and what will be included.
  • Driving better design of packaging.
  • Options for spreading costs to more producers.
  • Supporting improved collections and infrastructure.
  • Labelling and consumer communication.
  • Target proposals through to 2030.
  • Different model options to replace the PRN system.
  • Strengthened controls on the export management of packaging waste.
  • Greater transparency.
  • Compliance monitoring and enforcement
  • Estimated costs and benefits.

2.            Types of waste

The consultation considers three types of packaging waste:

  • Consumer facing ‘household’ packaging that would typically be collected by local authorities. This would include both product packaging and with the exponential increase in online home deliveries, secondary packaging such as cardboard boxes, bubble wrap etc.
  • Waste similar to this that would be found in commercial premises – referred to as ‘household-like’ packaging.
  • Packaging generally only found in commercial and industrial (C&I) use – primarily transit packaging - and which normally has a net value.

3.            Brief explanation of the proposals

  • Full Net Cost Recovery.
    • The Governments position is that this will only be applied to household and household-like packaging and would see registered producers paying for the costs of: collection and transport to recycling facilities; the costs of recycling or disposal where it can’t be recycled; local authority litter clean-up; consumer communications; system management, monitoring and enforcement. Material values would be netted off these costs.
    • It is predicted that this will see producer costs escalate from the current annual average of around £70m PRN cost plus £20m administration and enforcement to up to £2bn.
  • Proposals to make packaging more recyclable.
    • This would see producer charges being based on the recyclability of what was placed on the market through modulated fees and deposits defined by a central organisation.
  • Options for spreading costs to more producers.
    • The current system shares responsibility between the raw material producer, the packaging manufacturer, the product manufacturer who places the product into packaging and the seller who sells the packaged item to the end user with importers taking responsibility for what happens prior to import. The proposals consider moving to a single point of responsibility eg product manufacturer/brand owner or importer. It also considers ways to ensure online retailer packaging is all captured.
  • Collections and infrastructure.
    • This considers ways to reduce the use of non-recyclable packaging, improve the quality of what is collected, encourage recycling infrastructure growth and distribute producer funds to where they are needed.
  • Communication.
    • The Government intends to use these regulations to demand recycling labelling standards and to fund consumer communication campaigns.
  • Targets.
    • This puts forward target proposals that go beyond the EU target through 2025 and 2030 but it also proposes the targets for 2021 and 2022 to see out the PRN system which include an increase in the small producer ‘allocation’ tonnage.
    • Respondents therefore need to consider these carefully as they propose some big increases for those two years and this will be the only consultation on targets.
    • On page 67, there is reference to the introduction of separate targets for the different UK nations. This would demand separate nation reporting and the identification of waste produced by nation.
  • Model options.
    • This is the big one as it proposes 4 different model options to replace the PRN system.
    • Model 1 – Compliance schemes manage the process of producer registration, producer charges and distribution of ‘full net cost recovery’ funds to local authorities and the waste sector and then meeting targets. Compliance schemes responsibilities would be far greater in terms of accountability and fund management with the need for contractual engagement with 400+ local authorities.
    • Model 2 – A government-appointed Producer Management Organisation is responsible for the full process, effectively taking the role of compliance schemes in model 1.
    • Model 3 – a hybrid of 1 and 2 with the PMO taking responsibility for household and household-like and compliance schemes managing C&I packaging under a similar system to the current PRN.
    • Model 4 – producers pay both a deposit and a modulated fee into a centrally managed fund for packaging placed on the market. The modulated fee works as in option 2 for household and household-like packaging but producers would then be required to demonstrate evidence of recycling – similar to the current PRN – to be able to reclaim part or all of their deposit. The principle here is that if a producer puts non-recyclable packaging into the market, they won’t get their deposit back and it will therefore incentivise the use of recyclable packaging. The proposal is that the deposit would be high enough to change behaviour and would therefore be significantly more than the FNR modulated fee level.
    • There are pros and cons for all models. For models 1-3, it is about delivering full net cost recovery and the principle objective. For model 4, it is more about getting rid of ‘bad’ packaging.
  • Strengthened controls on the management of packaging waste.
    • These proposals respond to widespread concern over the quality of recyclables we export or try and reprocess in the UK and are about tightening export controls and improving the quality of collections.
  • Greater transparency.
    • There are widespread concerns about the lack of transparency in the current PRN system on where the money goes. The proposals are for much tighter control on reprocessors and exporters to be more transparent with pricing and what the money is used for with a requirement for audited accounts. In addition there are recommendations that reprocessor and exporter accreditation should be mandatory. There are also proposals that in models 1, 3 and 4, compliance schemes would be much more tightly regulated including reporting on how producer fees are spent.
  • Compliance monitoring and enforcement
    • The consultation provides a lot of detail on reporting expectations and enforcement proposals.
  • Estimated costs and benefits.
    • There is a cost analysis in the consultation on how the proposed changes would impact to 2030. But the key figures of interest suggest the current approximate annul UK-wide costs that would need to be covered by FNCR are as follows:
      1. Household packaging recycling – £644m
      2. Household-like packaging recycling -£185m
      3. Disposal of household packaging in residual waste - £174m
      4. Disposal of household-like packaging in residual waste - £197m
      5. Litter - £789m
      6. Communications, enforcement, system management – not estimated, but probably another £30-50m
    • In total, then, potentially around £2bn compared to the current system cost of around £40-200m depending on PRN costs.

4.            Responding to the consultation

The Consultation closes on 13 May. There are 92 questions, but responding to all the questions is not a requirement and it is suggested you pick out the key questions that relate to your circumstances.

Responses should be made to:
packaging@defra.gov.uk  or in writing to: Extended Producer Responsibility Team Department for Environment, Food and Rural Affairs, Ground Floor, Seacole Block, 2 Marsham Street, London, SW1P 4DF

Defra have a huge task to analyse responses from this and the other 3 consultations and would therefore welcome respondents only answering the questions they feel are relevant to them and answers being brief and to the point.

5.            Summary of questions:

Q1-5 – about the respondent – this is particularly important to answer in detail where the respondent is answering on behalf of a specific sector or large organisation that will be heavily affected

Q6-9 about more general aspects of EPR

Q10-13 – about Full Net Cost Recovery

Q14-17 – about packaging design

Q18-25 – about what producers should be obligated. Particularly important if you have an opinion about single point or shared responsibility, Q23 especially

Q26-36 – about who should get paid for what

Q37-39 – about communications

Q40-44 – about labelling

Q45-47 – about data

Q48-55 – about targets (Q51 – about the split of targets by nation)

Q56-66 – about the different model options

Q67-70 – about export controls

Q71-78 – about transparency

Q79-92 – about compliance monitoring and enforcement

 

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