I beg to move,
That the Committee has considered the draft Producer Responsibility Obligations (Packaging and Packaging Waste) Regulations 2024.
It is a pleasure to serve under your chairmanship, Mr Pritchard.
The regulations, which were laid in draft before the House on 24 October 2024, introduce extended producer responsibility for packaging, referred to as pEPR, in England, Wales, Northern Ireland and Scotland. PEPR is one of the three core pillars of the Government’s ambitious packaging reforms, alongside the forthcoming deposit returns scheme and the simpler recycling programme in England. It will overhaul the packaging waste system, introducing the biggest change to policy in a generation—since the last Labour Government introduced the landfill tax. Collectively, the packaging reforms are estimated to deliver carbon savings of more than 46 million tonnes of carbon dioxide-equivalent by 2035, which is valued at more than £10 billion in carbon benefit.
The new system established under the regulations will modernise the producer responsibility system for packaging in the United Kingdom by shifting the costs of managing discarded household packaging from taxpayers to businesses that supply packaging, thereby applying the “polluter pays” principle. The regulations implement the international best practice exemplified by the mature systems of our European neighbours, including Belgium and Germany, where comprehensive pEPR schemes have been in place for some time. This is a foundational pillar of our transition to a circular economy, moving away from the linear take, make and throw model, which we know harms our environment and society, to an economic model that keeps valuable material resources in use for longer.
The revenue raised by the new system will generate more than £1 billion a year to support local authority collection, recycling and waste disposal services, which will benefit every household in the UK and stimulate much-needed investment in our recycling infrastructure. It will make a substantial contribution to the benefits of the packaging reforms which together—those three pillars of the DRS, simpler recycling and today’s regulations—are estimated to support 21,000 jobs across nations and regions, and to help to stimulate more than £10 billion of investment in recycling capability over the next decade. Revenue from pEPR will create a much-needed injection of resources to local authorities to improve the household kerbside collection system across the UK.
In England, the revenue will fund the simpler recycling reforms that will enable consistent collection of all dry packaging materials, ending the postcode lottery for recycling. Taken together, the reforms will support this mission-driven Government’s ambition to kickstart economic growth and create the foundations that are required to transition towards a circular economy for packaging in the UK, ensuring that resources are used for longer. It is a critical first step towards meeting our manifesto commitment to transition to a resource-resilient, productive circular economy that delivers long-term sustainable growth.
Let me draw hon. Members’ attention to the new obligations in the statutory instrument. First, the regulations introduce an obligation on businesses that supply household packaging, referred to as “producers”, to pay the costs incurred by local authorities in managing that packaging once it has been discarded. Producers will also be obligated to meet the cost of providing public information about the correct disposal of packaging. Producers will start incurring fees from April 2025, and invoices will be issued from October 2025 for the 2025-26 scheme year.
Additionally, from the second year of the scheme, producer fees will be adjusted to incentivise producers to make more sustainable decisions at the product design stage, including decisions that make it easier for products to be reused or recycled at their end of life. That will mean that a producer that uses packaging that is not environmentally sustainable, such as packaging that is not widely recycled, will incur higher fees. Conversely, those using packaging that is sustainable and readily recyclable will incur lower fees.
It is right that businesses bear the costs of managing the packaging they place on the market, but we must also protect small businesses, which are the lifeblood of our high streets and the backbone of our economy. That is why only businesses that have a turnover of more than £2 million and that supply over 50 tonnes of packaging a year will have to pay disposal fees under the new system. To administer the system, the regulations require the appointment of a scheme administrator jointly by the four nations. This body will be responsible for the implementation of pEPR, including the setting of producer fees, and the apportionment and payment of those fees to local authorities to fund their waste management services. The scheme administrator will initially be hosted by the Department for Environment, Food and Rural Affairs.
Let me turn to the detail of the obligations retained from the current producer responsibility system. The instrument revokes and replaces the Packaging Waste (Data Reporting) (England) Regulations 2023, along with the equivalent regulations in Wales, Northern Ireland and Scotland. The requirement for packaging producers to collect and report data on the amount and type of packaging they supply is carried over from the 2023 regulations, as amended. The data is used to calculate producers’ recycling and fee obligations.
The instrument also revokes and replaces the Producer Responsibility Obligations (Packaging Waste) Regulations 2007 and the equivalent regulations in Northern Ireland. As was the case under those regulations, the draft instrument places obligations on producers to ensure that a proportion of the packaging they supply is recycled and requires them to provide evidence of that to the regulator. Those requirements apply to all packaging, not just packaging likely to be disposed of in local authority household collections. To meet that obligation, producers must demonstrate compliance by obtaining packaging recovery notes and packaging export recovery notes from recycling facilities, or from those that export packaging waste for recycling.
Finally, the instrument provides the four national regulators with enforcement powers and a duty to monitor compliance. It contains strong enforcement measures, including criminal offences and powers for regulators to impose civil sanctions in cases of non-compliance. As is currently the case, the monitoring and enforcement activity for the producer responsibility regime will be funded by the associated charges in the draft regulations, such as those for registration and accreditation. The charges operate on a cost recovery basis. They have therefore been increased from the levels in the 2007 regulations to reflect the new duties placed on the regulators and the increased level of monitoring and audit activities.
To conclude, there is no such place as “away”; everything that we put into the planet we put into our environment and, ultimately, into ourselves. It is therefore critical that we create the foundations to transition to a circular economy for packaging, ensure resources are kept in use for longer and secure vital carbon savings. As we look at the global plastic pollution treaty negotiations in Busan, South Korea, we certainly hope to play our part in that work.