Extended Producer Responsibility (EPR) is a transformative scheme whereby certain organisations and businesses will have to pay a fee for the packaging they supply to or import into the UK market. It is designed to shift the financial and operational burden of packaging waste management from taxpayers to producers. The money collected will go to Local Authorities (LAs), including:
- Waste disposal authorities;
- Waste collection or unitary authorities; and
- Statutory waste disposal authorities
and will help cover net costs associated with collecting, managing, recycling and disposing of household packaging waste to enable more efficient and effective packaging waste services.
Key benefits of EPR
EPR is the cornerstone of the UK's wider waste management reforms and offers multiple advantages, such as:
- Cost redistribution – transferring the costs for disposal of packaging from taxpayers to producers;
- Enhanced recycling awareness – improving and incentivising better use and labelling of packaging, thereby increasing consumer awareness of recyclability of products;
- Improved LA efficiency – incentivising LAs to improve the effectiveness and efficiency of their collection and recycling services;
- Environmental benefits – reducing carbon emissions and residual waste due to increased use of recycled/recyclable packaging; and
- Economic growth – driving infrastructure investment that supports economic growth and generates more than £1 billion annually to support local collection and disposal services, including recycling services.
Implementation
In the first year (April 2025 to March 2026), LAs will receive a basic payment based on publicly available and existing data, and data about tonnages, operations and unit costs gathered from a representative sample of LAs across the UK. The basic payment is calculated using a model based on certain LA characteristics, national policies and circumstances, amount of waste collected and managed, and the estimated composition of this waste.
From the second year (April 2026 to March 2027) onwards, the basic payment and any adjustments will be based on data submitted by LAs to the Scheme Administrator. LAs are not required to submit data in future years, although doing so will help improve the overall accuracy of the modelled payment calculations and help to ensure LAs receive more accurate payments.
The process of signing up for and receiving payments begun in November 2024 with Defra sending chief executives an email including an assessment notice, guidance and a schedule explaining the timeline for payments. In the first year, LAs will receive three grant determination letters detailing how much funding they will receive and when.
Supporting initiatives in recycling
The EPR will operate alongside and in addition to industry-led initiatives to reduce packaging waste. For example, Ecosurety, an environment and sustainability-focused organisation, has initiated a packaging compliance scheme with the purpose of accelerating change towards a more environmentally and socially sustainable world. The long-term goal is to return post-consumer flexible plastic film as food grade plastic and to shift to recycling at scale from kerbside collections.
Additionally, the British Plastics Federation have developed the Flexible Plastic Fund FlexCollect Project (the Project) which is the most extensive flexible plastic packaging kerbside collection trial ever undertaken in the UK. The Project is funded and managed by a consortium which includes DEFRA and Ecosurety and involves a wide range of stakeholders. It aims to understand how to recycle post-consumer flexible plastic at scale from householders via kerbside collection pilots and collaborates with nine local authorities covering a range of environments, socio-demographic profiles, collection methods and service offerings between 2022 - 2025.
Driving Reform
The overarching purpose of packaging EPR is to enable efficient and effective packaging waste services, which incentivises packaging reduction and recyclability, meaning less waste and more recycling. It is the cornerstone of the wider ongoing packaging reforms which will collectively:
- Support 21,000 jobs;
- Stimulate more than £10 billion investment in recycling capability during the next decade; and
- Present £1 billion worth of investment opportunities in plastics infrastructure.
Implications for waste contract procurements
The scheme provides much needed additional funding for LAs with waste collection and disposal responsibilities. However, this funding comes with an expectation that LAs will innovate to deliver effective and efficient collection and recycling services that deliver an improving supply of good quality recycled materials back to producers. The following will need to be kept in mind:
- Where waste collection services are outsourced, variations to existing contracts that implement such innovations (for example, greater separation of recycled materials) will need to be compliant with the Public Contracts Regulations 2025.
- Where contracts are up for re-procurement in the short term, the requirement to innovate as the scheme beds in should be baked into tender specifications so that proposals can be tested while competitive tension is at its greatest.
- Waste collection and disposal contracts tend to be some of the most complicated, high-value and lengthy contracts that LAs engage in. It is therefore worth investing in a detailed and bespoke procurement process, harnessing the flexibility provided by the Competitive Flexible Procedure under the new Procurement Act 2023, to ensure the best recycling outcomes are secured in before contracts are signed.
For more information on Extended Producer Responsibility and the procurement of waste contracts, contact Louis Sebastian (lsebastian@trowers.com).
