The United Kingdom is entering a critical phase in the rollout of its Extended Producer Responsibility for Packaging (pEPR) scheme, as PackUK begins issuing its first invoices to obligated packaging producers. While the initiative is designed to shift recycling costs from local authorities to packaging producers, industry experts are cautioning about potential unintended consequences that could unfairly impact certain sectors.

Under the pEPR scheme, which aims to support the circular economy, producers will now bear the financial burden of managing the disposal and recycling of the packaging they place on the market. The new system marks a significant change from the previous model, where local authorities shouldered the majority of these costs.

Invoicing Underway: The Start of a New Era

According to PackUK, producers will begin receiving notices of liability this month. These will be based on a flat-rate calculation: dividing the national waste management costs by the total volume of packaging placed on the market. Companies will have up to 50 days to pay their invoice, either in full or through quarterly instalments.

The government expects that local authorities will begin benefiting from the revenue generated through these payments by November 2025. Although the final base fees for the first year are lower than originally anticipated, concerns are emerging over how these fees are calculated and their broader impact.

Concerns Over Sector Disparities

One of the key criticisms is that the current flat fee structure does not differentiate based on material recyclability. This results in higher charges for producers using heavier packaging materials such as glass bottles and metal tins, despite these being more recyclable than many plastics.

Eluned Watson, an environmental and regulatory expert at law firm Pinsent Masons, highlighted this issue. "While this is an ambitious initiative that could significantly advance sustainability goals, the knock-on effects of the scheme need careful management," she said. "Certain industries—especially glass, metal packaging manufacturers, and the hospitality sector—may be unfairly penalised."

“We have experienced first-hand how dedicated our clients are to complying with the pEPR regime. However, concerns about economic challenges and consequential impacts are justified.” – Eluned Watson, Pinsent Masons

Watson further advised producers to review their fee statements promptly upon receipt to ensure the accuracy of the data used in the calculations. Any discrepancies could lead to financial liabilities or compliance issues further down the line.

Modulated Fees Coming in Year 2

While the first year of the scheme uses a flat fee approach, Year 2 will introduce a modulated fee system. This system is designed to incentivise sustainable packaging design by imposing higher fees on packaging materials that are less recyclable. The expectation is that this will steer producers toward using more sustainable, circular-friendly materials and formats.

This shift could address some of the concerns raised by industry stakeholders, particularly regarding fairness and material-specific penalties. However, companies are urged to begin adapting their packaging strategies now to prepare for the upcoming changes.

Balancing Reform and Impact

There is broad support for the pEPR initiative’s environmental goals, particularly the drive to internalize waste management costs and encourage packaging sustainability. But as implementation begins, it is clear that careful calibration is required to prevent economic imbalances and unintended sectoral disadvantages.

For many businesses, especially SMEs and industries reliant on heavier packaging materials, the first round of fees may come as a shock. Yet, with the introduction of modulated fees and increased transparency over time, the scheme could become a cornerstone of the UK’s sustainable packaging transformation.

Producers are advised to stay informed, audit their packaging data, and begin transitioning to more recyclable materials to mitigate future costs under the evolving pEPR landscape.