Extended Producer Responsibility for Packaging Consultation Document 24 March 2021

Extended Producer Responsibility for Packaging Consultation Document 24 March 2021 1 of 213 We are the Department for Environment, Food and Rural Affairs. We’re responsible for improving and protecting the environment, growing the green economy and supporting our world-class food, farming and fishing industries. We work closely with our 33 agencies and arm’s length bodies on our ambition to make our air purer, our water cleaner, our land greener and our food more sustainable. Our mission is to restore and enhance the environment for the next generation, and to leave the environment in a better state than we found it. © Crown copyright 2021 This information is licensed under the Open Government Licence v3.0. To view this licence, visit www.nationalarchives.gov.uk/doc/open-government-licence/ This publication is available at Gov.uk Any enquiries regarding this publication should be sent to us at [email protected] www.gov.uk/defra 2 of 213 Contents 1. Executive summary .............................................................................................. 4 2. Introduction ........................................................................................................ 14 3. Background ........................................................................................................ 21 4. What we want to achieve – principles, outcomes and targets ....................... 26 5. Producer obligations for full net cost payments and reporting ..................... 45 6. Producer disposable cups takeback obligation .............................................. 64 7. Modulated fees & labelling ................................................................................ 70 8. Payments for managing packaging waste ....................................................... 88 9. Litter payments................................................................................................. 134 10. Scheme administration and governance ..................................................... 144 11. Reprocessors and exporters ......................................................................... 158 12. Compliance and enforcement ....................................................................... 166 13. Digital design .................................................................................................. 172 14. Implementation timeline ................................................................................ 174 15. Costs and benefits of proposals ................................................................... 180 Annexes: ............................................................................................................... 185 Annex 1: Refillable/reusable packaging ............................................................. 185 Annex 2: UK-wide single management organisation ........................................ 190 Annex 3: UK-wide administrator and compliance schemes ............................. 194 Annex 4: Comparison of the two approaches against Extended Producer Responsibility principles ..................................................................................... 199 Annex 5: Plastic film and flexible packaging ..................................................... 205 Annex 6: Biodegradable and compostable plastic packaging ......................... 209 3 of 213 1. Executive summary Introduction 1.1 The UK Government and the Devolved Administrations are committed to protecting the environment and have all signalled their strong intent to introduce Extended Producer Responsibility for packaging so that producers pay the full costs of dealing with the waste they produce. These commitments include those in the 2018 Resource and Waste Strategy for England; the 2019 Conservative Manifesto; the Scottish Government’s Making Things Last; the Welsh Government’s Beyond Recycling, A strategy to make a circular economy in Wales a reality; and Northern Ireland’s 2019 Waste Management Plan. 1.2 Powers are being taken through the Environment Bill to enable the introduction of Extended Producer Responsibility schemes. In addition, in order to comply with the Ireland/Northern Ireland Protocol under the EU Withdrawal Agreement, the UK Government must ensure that Northern Ireland continues to transpose the Packaging and Packaging Waste Directive, as amended. The Directive was most recently amended by the Waste Circular Economy Package which requires Extended Producer Responsibility for packaging. 1.3 The system of producer responsibility for packaging has been in place in the UK since 1997 and has helped to increase recycling of packaging waste from 25%, 20 years ago to 63.9% in 2017. Over this period, we exceeded all UK and EU packaging waste recycling targets, and the cost of compliance to business was kept low when compared to countries in Europe. 1.4 However, as with any system that is over 20 years old, it needs reform. In 2019 Government1 set out the case for significant reforms to the current system in the consultation document Reforming the UK Packaging Producer Responsibility System. This included making producers responsible for the full net cost of managing packaging once it becomes waste, setting more ambitious targets for producers, and introducing clear and consistent labelling for recyclability. It recognised that the reforms must result in a packaging producer responsibility system that has a positive long-term impact, and works well for all stakeholders, for the UK and for all parts of the UK. Given the integrated nature of the packaging value chain and that many manufacturers and retailers operate across the UK, the proposals were based on the continuation of a UK-wide approach. 1.5 The consultation received 679 separate responses and 34 campaign responses. These were strongly supportive of the outcomes and principles 1 Unless otherwise stated “Government” refers to the UK Government, the Scottish Government, the Welsh Government and the Department of Agriculture, Environment and Rural Affairs in Northern Ireland. 4 of 213 underpinning the reforms, and broadly supportive of the proposals. In response to the consultation Government outlined its intent to progress these policy proposals, introduce an Extended Producer Responsibility scheme in 2023 and take primary powers in the Environment Bill to enable it to implement the reforms. 1.6 Since this first consultation, the Environment Bill has been scrutinised in the House of Commons and will be carried over to the next parliamentary session (when the Report Stage will be completed in the House of Commons). We have undertaken additional review of consultation responses, evidence development and stakeholder engagement to develop proposals further. This work has enabled Government to confirm its preferred approach to many key elements of the reforms and to seek views, through this consultation, on the specific details of implementing its preferred approaches. 1.7 For some areas Government seeks more views on broad options. Where this is the case it will be important for Government to form a clear position soon after consultation to allow the focus to shift to legislating. As a result, we will look to actively engage stakeholders in these areas during consultation to help facilitate broad consensus. Summary of proposals and benefits 1.8 As a result of the proposals set out below, and assuming the introduction of recycling consistency proposals in England and an ‘all in’ deposit return scheme, our analysis indicates a total UK packaging recycling rate by 2030 of 78%, with the estimated recycling rates for each material exceeding those set in the European Union. The recycling rates for glass (96%), card (86%) and steel (93%) are ambitious and close to the maximum likely to be achievable. The recycling rates estimated for aluminium of 69% and plastics 62% are lower, but we expect these to increase once the collection and recycling of other aluminium packaging and plastic film and flexibles are included in our analysis. 1.9 We estimate this increase in the recycling of packaging will generate 3.1 million tonnes of traded carbon benefits and 1.3 million tonnes of non-traded benefits over the appraisal period (2023-2032). This represents £412m of benefit to society2. This does not include additional savings resulting from reduced packaging use as these have not been quantified at this stage. 2 The impact assessment for EPR accounts for the portion of costs and benefits. Specifically, it includes the impact of modulated fees on EPR materials, the collection of plastic films and flexibles, and mandatory take back of paper cups. It excludes the benefits of increase recycling of deposit return scheme materials, and, while being funded by EPR producers, it does not include the costs and benefits of consistent collection of other packaging materials such as pots tubs and trays as these are accounted for in the consistency IA. 5 of 213 1.10 Under the proposals set out in this consultation, packaging producers will be made responsible for the full cost of managing the packaging they place on the market. Government estimates that their costs will be in the region of £2.7bn in the first full year of implementation. 1.11 This cost transfer, from the public purse and those who dispose of packaging waste, will incentivise producers to question whether the packaging they use is necessary, could be reduced or not used at all. Government also proposes introducing obligations, possibly in the form of packaging reuse targets from

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