Industry Insights: A Look at EPR

If you’ve been keeping an eye on industry news, there’s a high chance you’ve read a little (or a lot!) about Extended Producer Responsibility, or ‘EPR’. Set to come into effect from the 1st of January 2025, but also backdated all packaging from the 1st of January 2024. EPR is a new regulatory scheme that will change how businesses manage packaging waste. Naturally, this new scheme is set to impact various sectors, but its greatest impact will be on those that rely heavily on packaging, with retail and consumer goods likely to see the biggest changes.

So, what exactly is EPR, and what does it mean for UK businesses? Here’s what we know:
While local councils have managed packaging waste collection and recycling, producer responsibility for packaging waste has existed since introducing the Producer Responsibility Obligations (Packaging Waste) Regulations in 1997. These regulations placed some responsibility on producers to cover recycling costs through a system of Packaging Recovery Notes (PRNs). EPR builds on this, shifting more costs directly to producers.

There’s more to EPR than simply covering costs, though. What businesses pay will be calculated according to both the type and volume of packaging they bring into the UK market, incentivising producers to both use materials that are easier to recycle and to reduce their overall use of packaging – especially single-use packaging. So, in theory, EPR will encourage businesses to be more environmentally conscious and contribute to a more circular economy. But is it really that straightforward? Let’s take a look.

Who Will Have to Pay?
As it stands, EPR will apply only to UK businesses with over £1 million in turnover that supply or import more than 25 tonnes of packaging annually. However it is worth noting that businesses below this threshold may also be required to report packaging data if they meet lower thresholds (£1 million turnover and over 25 tonnes of packaging handled annually). DEFRA provides precise guidelines, and exceptions or lower thresholds could apply in specific circumstances

Which Sectors Are Affected?
Any sector that deals significantly with packaged goods will be affected, but we expect the greatest costs to fall on food and drink, consumer goods, cosmetics, and retail. While these sectors certainly have room to innovate and adjust their packaging systems, there’s little opportunity to simply ditch much packaging altogether. These businesses will face significant work ahead to assess exactly how much packaging they’re using, the types of materials they’re choosing, and how much EPR will cost them in the future.

How Much Will Businesses Have to Pay?
Nobody knows for sure yet. The Department for Environment, Food & Rural Affairs (DEFRA) is still working on calculating how much it costs local authorities to manage household packaging waste, and waiting for businesses to report their packaging data for previous years. Right now, DEFRA has provided a range of estimated fees for producers, known as ‘illustrative base fees’, for 2025-2026.

These have been calculated by dividing local authority waste management costs by the total amount of packaging sold. The result is a rate per tonne of packaging that businesses can expect to pay.

What’s Happening Now?
EPR comes into force on the 1st of January 2025 and are still required to report packaging data for 2023 and will also need to pay any related fees in 2025 based on 2024 data.

Are There Any Immediate Challenges?
Right now, businesses are focusing on gathering and reporting their 2023 and 2024 packaging data. Many are concerned that they still don’t know exactly what their first EPR bill in 2025 will cost, with fees published in April 2025 by DEFRA.

In light of this, some businesses, referred to as ‘freeriders,’ are trying to lower their EPR fees by underreporting their packaging volumes. However, this backfires and increases costs for everyone, since EPR fees are calculated by dividing total waste management costs by the amount of packaging reported. Therefore, if the packaging figures drop while costs stay the same, everyone’s fees end up higher to cover the gap. So, in short, it’s really important that businesses accurately report their packaging figures to keep
EPR fees fair and as low as possible.

Sector-Specific Impacts
Each sector affected by EPR will face unique challenges, with reliance on packaging materials varying for everyone. We in the soft drinks industry, frequent users of glass and cartons are likely to see increased packaging costs. Plastic and cans will be captured in the future DRS costs. While exploring alternative materials or processes could help reduce expenses, doing so will require substantial time and financial investment—especially for smaller producers, who could find the transition more financially challenging. Though we can’t predict any exact outcomes, it’s safe to say that most, if not all, businesses will end up protecting their profit margins by passing these costs onto consumers through price increases.

Retailers and trade buyers, such as supermarkets, caterers, school and hospitality businesses, will also feel the impact, with wholesale prices reflecting EPR fees as well. To manage these costs, some retailers may increasingly turn to private-label or own-brand products, attracted by the potential for better control over pricing. In the end, all affected industries are likely to face both positive discussions and disagreements, with suppliers and retailers collaborating and negotiating to manage the new costs. We can expect notable fluctuations in retail prices to reflect these changes and the accompanying uncertainties.

Looking Ahead: The Future of EPR in the UK
The EPR scheme is set for phased implementation, with fees expected to begin in 2025 after an initial delay from 2024. Naturally, this shift has introduced some real uncertainty around budgeting and planning for affected businesses. The government is still working with industry bodies to finalise the framework, but a notable new development in the EPR scheme is the proposal of a ‘co-design’ approach between the government and the producers themselves. While some argue that this is a positive step forward – using data from other countries’ producer-led EPR models to support the move – others have raised concerns that a producer-led model could end up prioritising cost control over environmental goals.

Ultimately, the UK’s EPR scheme marks a huge change in how packaging waste is managed, shifting the financial responsibility back onto the businesses creating it. For some, the scheme presents an opportunity to drive businesses towards more sustainable practices, while others may view it as simply an added regulatory and financial burden. As the final details become clearer, we know that businesses across nearly all sectors will need to adjust to these changes, balancing compliance requirements with cost considerations in an ever-shifting regulatory landscape.

Where to Learn More About EPR
If you’re a company preparing for EPR, here are a few resources to help you stay in the loop:

DEFRA, for regular updates on EPR guidelines, timelines, and compliance expectations.
British Brands Group and the Groceries Code Adjudicator, for information on the scheme’s impact on suppliers and retailer relationships.
The Grocer, for regular news and opinion pieces on all things EPR-related