In June 2022, the UK government announced that all organisations responsible for packaging would need to comply with new EPR regulations beginning in January 2023.
The regulations apply to any company with an annual turnover of over one million pounds and responsible for introducing more than 25 metric tons of packaging into the British market.And while this is the British market, EPR laws are also becoming increasingly popular in the US, so if you're an American company, you have an opportunity here to get ahead of the curve too.
But what does EPR mean, and what does it mean to become EPR-compliant? If you're scratching your head over this new announcement, we at Scrapp can help. We've put together this article to help you understand EPR, and what it means for you.
Defining Extended Producer Responsibility
Extended producer responsibility (EPR) is a policy approach that shifts the responsibility for managing a product's environmental impacts from the government and taxpayers onto its producers. It's basically like playing a massive UNO reverse card which makes companies responsible for the environmental impact (cost) of packaging instead of letting consumers deal with it. This cost will help to incentivise our favourite brands to choose smarter packaging decisions that are easier to recycle and kinder to our planet.
Under this approach, producers are responsible for collecting, disposing, and recycling their products at the end of their life.
Suppose you're doing business in the UK. In that case, the new regulations mean that you may need to do the following: collect and report data on the packaging you handle or supply, pay a waste management fee, buy what is known as packaging waste recycling notes (PRNs) or packaging waste export recycling notes (PERNs), and report information on where your packaging has been sold, hired, loaned, gifted or discarded.
The actual EPR requirements vary depending on the size of your organisation. Suppose you're a small organisation, which the UK government defines as having an annual turnover between one million to two million pounds and producing less than 50 metric tons of packaging. In that case, you have to do a bit less. You only need to take steps to record data about all your empty packaging and all the packaged goods you handle and report that data to the government. In 2024, you'll also have a year to register your organisation and start paying an annual fee to an environmental regulating body.
But if you're a large organisation, meaning that your annual turnover is over two million pounds and you produce more than 50 tonnes of waste a year, you'll not only need to do everything the small organisations are doing; you'll also need to buy PRNs or PERNs to meet your recycling obligations. And as a large organisation, you'll have to report your data on a much faster schedule than a small organisation, with reports due every six months. Registrations for large organisations begin in July 2023, and from April 2024, you'll also need to start paying scheme administrators an administration fee and a waste management fee for any packaging you supply and handle that's collected by local authorities from households and street bins.
In either case, missing your deadlines will incur a penalty charge, so it's crucial to ensure you understand what EPR compliance means for your business and that you meet all your deadlines. That sounds like a hassle, but it's for a good cause because EPR is critical to the circular economy.
EPR and the circular economy
If you've been working in the environmental space, you might have heard the term circular economy before. The circular economy is an economic model that aims to reduce waste and increase resource efficiency, partly by keeping resources in use for as long as possible and partly by recovering and regenerating waste into new products. It's built on three principles: eliminating waste and pollution, circulating products and materials at their highest value, and restoring nature. With the world facing several global environmental challenges, like climate change and pollution, models like the circular economy are becoming more critical than ever.
EPR contributes to the circular economy in several ways:
1. It incentivises producers to design products that are easier to recycle and dispose of, which helps reduce waste and increase resource efficiency. This can also lead to the development of new technologies and processes that make it easier to recover resources.
2. EPR helps to ensure that the producers take on the costs of managing the end-of-life of products rather than being passed on to the government and taxpayers. This creates a level playing field for producers, as those who design more sustainable products can recover their costs more efficiently.
3. EPR can help foster a more collaborative approach to managing the end-of-life of products.
Producers, governments, and other stakeholders can work together to develop effective systems for collecting, disposing, and recycling products, which can help to increase the overall efficiency of the circular economy.
These three benefits make EPR a key component of the circular economy and can help reduce waste, increase resource efficiency, and foster stakeholder collaboration. By shifting the responsibility for managing the environmental impacts of products to the producers, EPR helps to create a more sustainable and resilient economy.
How much does EPR cost?
The UK government estimates that EPR could end up costing producers up to 1.7 billion pounds, although of course, any one business won't be responsible for taking that entire cost on by themselves. The new EPR regulations are meant to help ensure that smaller companies in the UK pay their part, but businesses just becoming EPR compliant will incur some costs. Unfortunately, it's difficult to tell just how much those costs would be at this stage. In the US, things are different. The US doesn't have a general EPR policy at the moment. While EPR bills have been introduced in some US states since 2021, notably Maine and Oregon, the nature of the American market means that it might take a while before EPR regulations take on the same momentum as in the UK and Europe. That makes predicting the eventual cost of EPR on American brands more difficult.
Packaging fees will depend on how much waste you produce, so making sure you're efficient with packaging and cutting back on waste now will only end up helping you and the environment. The more sustainable your packaging, the lower your fee, so it's worth starting to consider more sustainable packing options. These will be different for everyone, but you can start looking into your specific needs to make sure your packaging does everything it needs to while being as sustainable as possible. Keeping things as simple as they can be from the start will help you avoid complications further down the road. And with many of the EPR's current administrative obligations (like collecting data on packaged products and reporting those), making sure that your own administration and data collection systems are running smoothly now will help you streamline the EPR process later.
As a note, while EPR is intended for brand owners, meaning people who are responsible for packing and filling a package, if you are a retailer, service provider, distributor, importer, or online marketplace of any kind and you sell packaged products that are not immediately identifiable as part of a brand, you may end up liable for EPR costs in their stead. So if this is you, make sure that you know which products you’re selling and whether those brands are EPR-compliant, so that you don’t end up picking up the tab. If you’re confused at all, you can use the Department for Environment, Food & Rural Affairs (Defra)’s online tool to see if your organisation has EPR obligations and what those are.
Finally, if you run a charitable organisation, you’re likely exempt from EPR. Charities don’t have to comply with EPR, even if they sell packaged products (like boxes of Christmas cards) in-store or online.
And if you’re a consumer, worried that new EPR legislation will increase prices in the middle of a historic cost-of-living crisis, you’re not alone. Thankfully, new research from Columbia University has shown that EPR laws shouldn’t result in an appreciable price increase. That’s because packaging is never more than 2% of the total cost of a product, so even with EPR, prices only go up by a fraction of a percent, and that’s for the highest-consuming households. Because EPR is also focused on increasing efficiency, it’s expected that the costs associated with EPR will decrease with time.
How can Scrapp help you become EPR compliant?
The journey to becoming EPR-compliant can be daunting, so if you're looking for a place to start, we can help. Here at Scrapp, we help brands and retailers become EPR-compliant by:
1. Communicating correct recycling practices of their products
2. Understanding recyclability of product packaging
3. Tracking materials and packaging types in their value chains
With over 10+ years combined experience, we're experts at the sort of packaging data management that you’ll need to bring your business up to speed. You can book a consultant call with us at any time. As a bonus, you’ll get Brand Verified on our Scrapp App for free.
It’s never too late to get ahead of the curve, so enquire today!
Get in touch: enquiries@scrapprecycling.com