Packaging extended producer responsibility

Packaging extended producer responsibility (pEPR) is a UK-wide scheme that requires packaging producers to cover the full cost of managing household packaging waste. This includes the costs of collecting, sorting, recycling and disposing of packaging once it is discarded by consumers. A revised scheme began in April 2025 and replaces a previous system where producers paid only a proportion of these costs. Local authorities will continue to manage household recycling services but will now receive funding from producers through pEPR.

Background to reform

The UK’s original packaging producer responsibility scheme was introduced to meet obligations under the EU Packaging and Packaging Waste Directive. It required businesses over a certain size to recover and recycle a proportion of the packaging they placed on the market. Compliance was demonstrated through Packaging Recovery Notes (PRNs) or Packaging Export Recovery Notes (PERNs), issued by accredited reprocessors (for example, recycling plants) and exporters.

The original scheme was heavily criticised. In 2017 the House of Commons Environmental Audit Committee found that producers covered only around 10% of packaging waste disposal costs, with taxpayers funding the rest. It recommended reforms to incentivise better recyclability of products and improve transparency. The National Audit Office raised concerns in 2018 about the lack of checks on exported waste and the risk of fraud. Industry groups, such as the British Plastics Federation, also criticised the scheme for encouraging exports over domestic recycling investment.

Development of the revised scheme

The revised pEPR scheme was developed through a series of consultations between 2019 and 2023. These sought views on policy design, technical aspects of PRNs and PERNs, and draft regulations.

The scheme is being implemented under the Producer Responsibility Obligations (Packaging and Packaging Waste) Regulations 2024. It is administered by PackUK, a body within the Department for Environment, Food and Rural Affairs (Defra), and operates across all four UK nations. Producers must register with their respective environmental regulator and report packaging data.

Each part of the UK will separately evaluate the scheme, with the first review due to be completed by December 2028.

Payments and fees

Large packaging producers (those that have a turnover of £2 million and handles more than 50 tonnes of packaging per year) must pay fees based on the amount and type of household packaging they supply. These fees are passed to local authorities via PackUK. The government estimates the shift in cost from local authorities to producers will total around £1.2 billion annually. Local authorities are expected to use the funding to improve recycling services and infrastructure. PackUK can reduce funding to a local authority if there is evidence it is being spent elsewhere.

In the first year (2025 to 2026), producers will pay flat base fees per tonne of material. These reflect average handling and recycling costs and are not adjusted for recyclability. For example, the base fee for plastic is £423 per tonne, while for glass it is £192. From the second year (2026 to 2027), fees will be adjusted and based on recyclability, using a red–amber–green (RAG) rating system. Packaging rated green will incur lower fees, while red-rated packaging will attract higher charges.

Industry concerns

There has been concern from the metal, food packaging and glass industry associations about how the fees for the scheme have been calculated and that there is a disproportionate cost burden on heavier materials. The government has said it will assess industry feedback on the issue.

For the purposes of pEPR, producers will need to assess whether their packaging is household packaging or non-household packaging. There have been some concerns raised about the definition of household/non-household items and whether the rules capture these items correctly. The government has said that it would consider refining the scheme.

Closed loop recycling

Closed loop recycling refers to systems where producers collect and reprocess packaging to make new products within the same category. Some food and drink businesses have argued that pEPR penalises these systems. In response, the government has published further regulations to allow producers of food-grade plastics to offset pEPR fees when recycling in closed loop systems.