Following the publication of the estimated fee boundaries for the Extended Producer Responsibility (EPR) scheme in August, Defra has posted new illustrative base fees for EPR, sharing a single figure rather than a range.
This approach has been taken following agreement across all four Governments of the final proposed modelling scenario for the total local authority disposal costs that should be recovered through EPR in 2025.
| Material | Rate (in £ per tonne) |
|---|---|
| Aluminium | 435 |
| Fibre-based composite | 455 |
| Glass | 240 |
| Paper or board | 215 |
| Plastic | 485 |
| Steel | 305 |
| Wood | 320 |
| Other | 280 |
How are the fees calculated?
Illustrative base fees are calculated by dividing packaging waste management costs (for household packaging waste) and other relevant costs by the total amount of household packaging placed on the market. The result is a fee rate which is expressed in cost per tonne of packaging placed on the market. The calculation is applied to each category (e.g. plastic, aluminium, etc.).
This release uses the most recent data submitted by large organisations into the Report Packaging Data (RPD) online portal system for January to June 2024 (extracted on 19 December 2024) for all materials, including glass.
Glass tonnages include household drink containers as they are in scope of EPR producer fees (unlike single-use PET, aluminium and steel drinks containers 150ml to 3l in size, which are in scope of a Deposit Return Scheme across the four nations).
This modelling scenario is the basis for the initial funding allocations sent to local authorities at the end of November 2024. This total figure for the UK amounts to £1.5bn (rounded figure to the nearest £500m), which is much lower than the upper scenario it had previously modelled (£1.8bn).
‘Sustainability goals come at huge cost’
Commenting on the single figure estimate, Jim Bligh, director of corporate affairs and packaging at The Food and Drink Federation said: “The new Extended Producer Responsibility regulations could be a game changer for the UK and our flatlining recycling rates. As an industry, food and drink manufacturers are embracing EPR and the opportunity to revolutionise the UK’s recycling system, while ensuring we have access to the recycled content we need to meet our own sustainability goals.
“But, this comes with a huge cost for business, with UK food and drink manufacturers committing more than £1bn a year to EPR from next October.
“Our members negotiate pricing with retailers up to a year in advance. Until now they’ve been doing this without clarity from government on the EPR fees they’ll pay next year, and, as a result, without clarity on the actual cost of their products. Defra’s confirmation of more specific fee estimates is therefore welcome, as it will give businesses the certainty they urgently need about the costs they’ll be facing from next year.
“Now that we have this clarity, it’s vital that Defra works with producers – who are now legally responsible for improving the UK’s recycling rates – to ensure that this multi-billion-pound investment produces real results for the nation.”
But not everyone is as optimistic about the news, with the CEO of the British Beer and Pub Association (BBPA) describing the fees as ‘painful’.
BBPA chief executive officer Emma McClarkin raises particular issue with the revised glass estimates, stating they are “an extremely worrying step in the wrong direction”.
“Government must be clear-eyed that these proposed higher additional costs on brewers would land an extra £160m or 5p per glass bottle on the sector. This could force some brewers to leave the glass bottle market.
“Given the incredibly narrow margins UK brewers operate to, as they make an average of 2p per bottle of beer, this means they’ll be forced to pass on extra painful costs to the consumer if they want to carry on making their product.
“The sector is, of course, committed to a more circular economy and sustainable packaging solutions, but it is critical that Government properly considers the full impact of these fees and wider packaging reforms on our industry which will severely diminish growth and risk jobs.
“We urge them to continue to review these fees and ensure they are fairer and more sustainable, so we can continue to play a critical role for the UK’s economy and employment.”
Will EPR costs change?
The final disposal costs are undergoing quality assurance checks and while the illustrative base fees can provide further clarity to industry, these figures are still subject to significant uncertainty and will change in year one of EPR as more data are submitted by producers, and compliance monitored by regulators. The fees will also change in future years.
Final fees for the first year of EPR will be released after 1 April 2025 (the deadline for reporting packaging supplied by registered producers in 2024).
