EPR 101: Demystifying the New Requirements

What UK packaging data must be reported and by when? Who in the supply chain is responsible? Get straight answers to your EPR compliance questions from the experts in this practical video chat between PackTotal’s packaging regulations expert Claire Adams and sustainability leader Joel Tashe from CleanHub.

Here’s what you can expect:

• 🤔 Plain English on what you need to report and when
• 💡 Handy tips to get your data in order
• 💰 Insight on fees and incentives around materials
• 💻 Software options to make compliance easier
• ⏰ Guidance on deadlines to avoid penalties

Don’t get left behind on packaging taxes! This talk answers FAQs for producers large and small.

Transcript:

Joel (Host): “Hello everybody. Hi, it’s a pleasure to host yet another LinkedIn live this time with Claire Adams and we’re going to talk about EPR 101, Extended Producer Responsibility. So a bit of a public service announcement before we really get into the conversation with Claire and before I’m going to introduce Claire. Extended Producer Responsibility is a legal topic. We are not talking to a lawyer today, but to somebody who’s very well versed on the topic, so do feel free to ask questions. This is, again, the reason why we do these LinkedIn lives, that we want to bring in experts; we want you to participate. I repeat myself but I love podcasts and sometimes I’m a bit annoyed that I can’t interrupt and ask questions to the guests, so this is why we do the lives. Use the comment functionality if you have questions, just be aware this is not legal advice of any sorts, but we’re also going to talk where you can find more information and with that, very very happy to welcome you Claire. Maybe we start with a quick introduction from your side and then we get into the topic. “

Claire: “Thank you. Thanks for inviting me Joel and looking forward to the chat today. Yes my name is Claire. I work for PackTotal and we’re a software company and we have developed a new data management and compliance reporting software system specifically for the packaging industry and the regulations that are affecting the industry right now. So we came into the market about two years ago when plastic packaging tax came out because of the intricacies of the complications of the calculations and how everyone had to collect that data. We saw a gap that organizations would need some help with those calculations and when we started looking into the industry, we saw that EPR was on the horizon and the extra complications in the data set that would have to be produced. We knew that we had to extend the software to be able to cope with those calculations as well so that’s what we’ve built. We’ve been looking into the industry for a good couple of years now and the technical team have got a very very in-depth knowledge of the regulations and everything that’s required for an obligated producer to be able to produce the reports. I have got a good topline knowledge of it but happy to be here to chat to you today about what it is who’s affected, what people have to do, and like you say, where we can go to get some help and advice to be able to cope with how the obligations and everything that we’re having to do.”

Joel: “Perfect, great. Then let’s dive right in because the title is EPR 101. I’m a complete beginner on the UK EPR system I know about roughly how it works here in Germany but I have no idea in the UK and maybe we play a little game, a bit of a simulation. Say I’m leaving Berlin and move to London for good because it’s the more beautiful city and I’m starting a brand I’m selling fast moving consumer packaged goods. What do I have to do about EPR? When do I qualify for it? What do I need to look out for as a business owner okay?”

Claire: “Well first things it’s good that you actually know that there is something about EPR. It’s a global thing, isn’t it? Lots of countries have started to introduce it and the UK sort of introduced it last year and it’s progressing with what you have to do as a producer. So as a producer, and the term producer is quite broad, so that’s whether you’re going to be a brand owner, a packer filler, an importer, distributor, it’s do you handle packaging that is going to be disposed of in the UK. So we said, yes, you are but your obligations are different depending on the size of your organization, like your turnover and also the amount of packaging that is produced or handled by yourself so it’s like the tonnage of waste. So first things first, you would need to check your obligation, whether you are an obligated producer and you can do that by going on the DEFRA website – we’ve got a link to it on our website – but if I just say it’s if you’ve got a turnover of between 1 and 2 million pounds and you also handle between 25 and 50 tonnes of packaging you will be, well that’s unfilled or filled packaging, you will be classed as a small organization and you will be required to report on your data. You have to register and report. If, however, you now do over 2 million pounds in one year, so this is looking at the 2023 turnover, and you handle more than 50 tonnes of packaging you are a large organization and your obligations are quite significant. Basically EPR has come in as a review to the existing waste regulations so large organizations would have been having to report their waste annually anyway. But EPR has come in to encourage people to look at the full life cycle of your product, so it’s not just what you produce, it’s what happens to it at the end, what happens to it when it becomes waste and is it recycled. EPR is giving the responsibility back to the producers to say you’re going to pay a fee for whatever you produce, There will be a fee to pay to so that the burden of cost isn’t with local authorities, it’s going back to the producers that are putting the packaging on the market.”

Joel: “So that sounds interesting and let’s say since I just started out, I’m one of those smaller organizations, but I am successful enough that I unfortunately have to report – or lucky because it’s good for the environment. So packaging is a very broad topic: what materials? Is it just primary packaging so the actual product packaging? Does it include secondary packaging for when I put it on the shelf? What about my supply chain? What about the tertiary packaging? So if I wrap my pallets in stretch wrap, for example, what goes into the calculation?”

Claire: “They’ve covered everything when we say packaging, so like you say it’s we know you’re a producer but then it’s also what are you producing and what sort of packaging is it, so you’re right, it covers everything. It’s primary, secondary, shipment and tertiary. I don’t know if you want me to go into detail on what, a little bit, what each of those things are just with an example. Perhaps a box of hair care products, the primary packaging is your box of hair dye but it’s also what’s inside it. You know, you’ve got the two plastic bottles with the liquids, the lids, the capsules, the gloves, the paper instructions, that’s all what comes, that’s your primary packaging, that’s what the consumer touches, holds and that’s what we think will be thrown away by a consumer in a household. But then the secondary packaging is how is it sold? So in this instance, let’s say it’s on the supermarket shelf and it’s been delivered in, say 10 boxes of those individual hair dyes, and it comes on a tray. That tray there, that’s secondary packaging and my 10 boxes of hair dye came in boxes of 50 in an outer transit packaging, so that’s your tertiary packaging but it was wrapped in pallet wrap, it had layers in between, it came on a stack. What was that pallet made of, was it wood, was it plastic, is it reusable, is it recyclable, what labels are on this? All of that information has to be reported on from all the way through the value chain and all the way through the cycle. It’s a lot of information to report and what’s also really important to notice, is that each individual piece of packaging must only get reported once. So that hair dye might have come from Germany, it’s been imported into this country, it’s gone around, it came filled and it’s getting delivered to the supermarket so there’s been a few touch points but only one person has to take responsibility for that primary packaging. So it’s important to know through the chain, at what point you’re obligated so the data doesn’t get reported or charged twice.”

Joel: “That does sound quite complicated; so is that something that you and your organization help with in setting up the report?”

Claire: “We do, we do. So our reporting system will allow you to collect all of your information, every product you produce down to the component level. We will be collecting all of your materials data, or for each of the components, all on a database that’s accessible by you or everyone within your organization. You would then turn those components into a product, you would then say what it is in terms of what material it is. You have to report the weight and material so you’d say it’s plastic, it weighs 11 grams, that’s the pot, but it’s got a paper label or a plastic label and it weighs this and it’s a cardboard box and it weighs this and it goes into a pallet which is this. Do you know what I mean? So it logs everything for you. Also important to say who the customer is, what the customer size is, to say it’s not me – it’s going to a large supermarket so they’re the brand owners so it’s their responsibility for reporting the primary and secondary packaging.  I’m going to say that I’m responsible for the tertiary and shipment packaging. The pallet was mine, I disposed of that in my organization. The software will do all the data categorization for you. You pump in the data to say what the product is, what it looks like when you put it as a shipment where is it going and then it logs that so at the end of every six months as a large organization, or every year for a small organization, when it comes to the time that I’ve got to report on this data, it’s so simple to be able to do that. At a touch of a button, it’ll just add up for me, what did I do as a brand owner, what did I do as a supplier, what did I do as an online marketplace, and break it down for me in the way that HMRC or DEFRA are asking for.  So I want to be able to know what have I done that’s wood, cardboard, plastic, steel, aluminium or other. What have I done and what part of that was primary, secondary, shipment, tertiary and what is the total weight of all of those things.  So that when we do have mandatory fees, we’re going to have to report those separately as well, so that they want to be able to do another report to say thanks for that but now I need you to really drill down and go tell me what was PVC, what was black, what was you know, because they need to see that data and they need to be able to then invoice you for what you have put onto the market that is going into the waste stream, that is going to be recycled or not recycled but disposed of by a consumer.”

Joel: “So it sounds incredibly complex and very, very detail oriented.  I have a practical question before we get into, I think there is a lot of benefit especially again speaking from an environmental standpoint of that level of detail. Is there a central database where I can say, it’s like okay, it’s a plastic wrap for, I don’t know a chocolate bar, 10g chocolate bar, and this is about as much as the material weighs or do I then have to basically start a lab in my office and start weighing in every single individual item or is there like an orientation framework around.”

Claire: “It depends, if you were the manufacturer of that plastic you would have that information.  So you will have somebody in your organization would have that.  So that’s interesting you’re saying you know, do I have a central database, your organization might have the information spread out about six or seven different places. To have it in a hub would be ideal but let’s just say you’ve bought that in so your supplier should have that information and you have to ask them for it but at least once you’ve asked the question once, you bring it into your system, log it and it’s logged for everyone to know and see. And then for when you pass the information on, so if you were the wholesaler or distributor of that, you’d have that information to be able to pass on to the next people. “

Joel: “And another practical question because it sounds like I can just negotiate a lot with all the people in my value chain and say it’s like I think the responsibility is on you, I think it’s on you, like it starts to be a bit of a finger pointing exercise or is there a hierarchy? So if I’m the brand owner, let’s say and I run a direct consumer business and I sell shampoo, I import the packaging maybe from China, the product is filled in, I don’t know southern Germany, and then it ships into the UK and I sell it online but I also have a retail relationship, let’s say with Tesco because I’m very successful. Who says who’s responsible then? Isn’t that like a massive communication issue also?”

Claire: “So DEFRA have said who’s responsible by saying Tesco’s are generating over 2 million pounds and dealing with over 50 tonnes: they are a large organization. As soon as their logo goes on this shampoo they’re responsible for it. They’re responsible for the primary or whoever’s logo is on that packaging, they’re responsible as long as they are a large organization. If you are dealing, if you’re a brand owner that’s a small organization, you’ve put the product onto the market so you are responsible for it in terms of reporting but in terms of a fee, you’re not. There won’t be any modulated fees that you’re responsible for.”

Joel: “Interesting. So it does sound like I would definitely contact you if I would start a brand because I would want to have my data centralized so that’s already clear. The other question and this is where we’re probably then also stepping a bit into a grey zone, is how like at this level of detail, who’s controlling that and what are the fines if I don’t comply, because I can just say look I’m making more than 2 million but I don’t produce 25 tonnes, prove me wrong.”

Claire: “Well this came up in the chat we had with DEFRA doing monthly forums, business readiness forums so we had one this week and it was great because we met the scheme administrator who’s supporting DEFRA in actually implementing this. That question came up to say, well hold on a minute, like you say are Tesco’s going to actually really want to take the brunt of this 3 billion pounds worth of fees? What happens if only one person says that they are a large organization? It’s like don’t worry, they have got things in place to know because remember this is an addition to the waste regulation that’s been running for 15-17 years. People have already said what they’ve been doing turnover and wastewise, so it’s going to look a bit strange if they suddenly drop off the face of, you know, no more reports. There will be fines in place so we’re saying the deadline, we talked, and said the first deadline for large organizations to produce their annual data for 2023 is the 1st of April. We were supposed to do six months of it back in October but let’s just say 1st of April is your deadline but they have said no penalties will be enforced until the 1st of May, I think May, let’s say May, but I don’t know what that penalty is. But you know, we have seen the Environment Agency penalizing people for not conforming to the current regulations. If you haven’t been doing the data in the way that we’re asking you to, or if you haven’t been sticking to a responsibility of recycling as much as you said you would or should, you will get a fine so we we’ve seen that happening so people have to be aware that there are implications for non-compliance. It’s not just paying for more than you should, there is also the other end of, if you don’t report accurate data correct data or if you’re not complying to any of the things that DEFRA are asking you to do that there will be penalties and fines in place but don’t know what they are yet.”

Joel: “Interesting and my assumption, correct me if I’m wrong, so if I have to break this down into the different material categories and says like this can be recycled, this can’t be recycled, this is cups that are recyclable, maybe this is not, I hope that the regulation is designed in a way that it promotes recycling so if I put out material that is fit for the circular economy that can have a second life then I will have lower fees. If I put out multi packaging that I can’t recycle that has to be disposed of then I would have to pay a bit more, is that a correct assumption?”

Claire: “It is absolutely. I mean that’s one of the main focuses is, this is environmental policy to encourage producers to think about the whole life cycle and to produce products that are going to be either recycled or use materials that have come from recycled materials. So there’s a RAM methodology which is, I’m reading it here, Recyclability Assessment Methodology, which hasn’t been defined yet but it’s in discussions but let’s just say it’s totally encouraging that they want people in the industry to use materials that are better for the environment, in terms of using materials that are using recycled content and can be recycled. The fees, it’s called modulated fees for that reason, so I think they in discussions with about 13 materials at the moment and let’s just look at plastic as one of those examples. It’s going to encourage you through the fees system or the modulated fees system to say if you, let’s say the base fee is here, PVC has a modulated fee of 1.2 so it’s going to charge you 20% above the base rate for using a product that we deem to be not great and it will just get worse and worse and worse for what they deem as bad materials. And then there’ll be an offset to say, well underneath the base rate, if you are using packaging that comes from seaweed, anything like this you know comes from a great source and can easily be recycled, then it might be a 0.8 so it’s 20% more or 20% less so it’s totally going to go in the similar way to Plastic Packaging Tax. The fee you pay will be dependent on how environmentally friendly those things are but we haven’t heard yet exactly which products are coming under modulation. We haven’t heard yet exactly how they’re going to be doing the RAM methodology, you know how are they going to really class what is recyclability, but at the moment it’s just important, it’s just the large producers that are going to have this modulated fees and it’s only household packaging that’s the focus at the moment and the focus is on recyclability. But as EPR comes out and we move in the next 3, 5, 10 years, their focus might not be on just recyclability, it might be on reusability or reducing the size of thing to say you know, that’s a waste, a total waste of packaging, there’s x amount of air in that or why have you put five pieces of cardboard around something or why did you use cardboard when actually plastic would have been better in that scenario. What are the models that we can use and that’s in discussion at the minute with the, like I said, with the scheme administrator and the Steering Group with DEFRA that’s all coming out.”

Joel: “I love the concept even though it is complicated or it sounds like it’s quite a complicated or a complex task to calculate or that the direction where that is going, to me personally, sounds fantastic because, if you behave well in line with nature, you pay less, if you don’t, you pay more. I think the biggest question then is going to be, what’s the price point of the actual packaging right? So if I can procure the, let’s say, more sustainable, better recyclable packaging at maybe a little bit higher price than the less sustainable one, the effects need to grip right because else from a bottom line perspective, I can then still say it’s like all right. I might accept the higher fee that I have to pay through EPR but for that I have way lower procurement price for my packaging so if somebody’s just looking at it from a financial perspective right, so I don’t want to be the person that has to design all their policies because it does sound like a very complex task.”

Claire: “Well they’re using, you know, they’re taking advice from the industry you know the whole packaging value chain is complicated and so the people that are making these decisions, yes it’s the government, but it’s really being driven, it’s being value led by the producers that are going to be responsible for paying it so they’re going to have a massive, massive amount of input into well, how is it actually going to run. You know, is that fair? Why am I being asked to change to this when like say economic side of things going I can’t source anything or when I do try and source it, it’s five times more expensive so I’m not going to use recyclable materials, fine me. So I think the whole point of EPR is not a massive tax on people, it’s not just to collect amount of money, it really is to encourage well, just you know, for organizations to look at what do you pack, what packaging is going on the market. Have you made the best choice for you financially or environmentally because now if you’re going to have to think about the end of life, where is it going, who’s going to pick up the cost for that. It just makes you start thinking about it but hopefully within the next few years that, you know, there’ll be the money that is going to come in from EPR, it’s estimated I think, they said let’s say 2, I think they currently get 200 million from producers paying the annual waste fees and it’s projected to maybe be 3 billion pounds that is going to be collected through EPR. And this is to encourage the circularity, you know, we’re going to address the flow of materials they want to be able to make sure that we have got the infrastructure within the UK that if we say it’s recyclable, we don’t mean just in one local Authority, it’s or it’s recyclable but not at home, not at curb side you’ve got to then go and take it to the recycling centre down the road, a tip or you know but it’s us as consumers to get into that habit you know. Drink a lot of wine, I go to the glass recycling, you know, and that’s just become habit isn’t it? You eat your crisp packets – we go through an awful lot, I’ve got three children – so be able to recycle those with my curb side would be great but you know we’re not quite there yet, but we should hopefully get there if we can get this amount of money and the infrastructure and it’s to go round and round in that circle.”

Joel: “But it sounds like they are setting the rails really well and maybe a final question from my side. I also saw that the UK introduced the plastic tax. Is that coming on top of EPR?”

Claire: “It is yes so you will be responsible for both. So Plastic Packaging Tax you have to report four times a year. If you are a large organization for EPR, you’re going to have to do it another two times a year for this and, yes, you will be liable for both taxes. But that’s why I’m saying with the modulated fees, maybe they’ll take that into account that if you’re already, we’re already looking at plastic, what parts of those plastic are we going to look at in terms of the modulated fees.”

Joel: “Okay so I think even though there’s a lot of work to do this is clearly a sign in the right direction so I’m crossing my fingers that all will go well. My takeaway is if you’re a large organization meaning you make more than two million in turnover and you have more than 50 tonnes, watch out for the 1st of April make sure that you hand in your data else you’re going to be in trouble. If you need help with that contact Claire. If you listen to this not live but, I don’t know on YouTube etc., we’re going to link the contact details, we’re going to link PackTotal that can help you produce that reporting and I think there’s no questions from the audience so that means we answered all of them I think else you can find Claire on LinkedIn I think it’s fine to contact you to message you if there’s any questions and thank you so much. I think that was a fantastic and very very insightful session. I would feel a lot more comfortable now launching a brand in the UK but I might just continue doing what I’m doing and leave that stuff to those. Claire thank you so, so much and have a great day.”

Claire: “And you.”

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