Packaging Extended Producer Responsibility
Packaging extended producer responsibility (pEPR) is a UK-wide scheme that requires packaging producers to cover the full cost of managing household packaging waste. This includes the costs of collecting, sorting, recycling and disposing of packaging once it is discarded by consumers.
A revised scheme began in April 2025 and replaces a previous system where producers paid only a proportion of these costs. Local authorities will continue to manage household recycling services but will now receive funding from producers through pEPR [1].
Background to reform
The UK’s original packaging producer responsibility scheme was introduced to meet obligations under the EU Packaging and Packaging Waste Directive. It required businesses over a certain size to recover and recycle a proportion of the packaging they placed on the market. Compliance was demonstrated through Packaging Recovery Notes (PRNs) or Packaging Export Recovery Notes (PERNs), issued by accredited reprocessors (for example, recycling plants) and exporters [1].
The original scheme was heavily criticised. In 2017 the House of Commons Environmental Audit Committee found that producers covered only around 10% of packaging waste disposal costs, with taxpayers funding the rest. It recommended reforms to incentivise better recyclability of products and improve transparency. The National Audit Office raised concerns in 2018 about the lack of checks on exported waste and the risk of fraud. Industry groups, such as the British Plastics Federation, also criticised the scheme for encouraging exports over domestic recycling investment [1].
Development of the revised scheme
The revised pEPR scheme was developed through a series of consultations between 2019 and 2023. These sought views on policy design, technical aspects of PRNs and PERNs, and draft regulations.
The scheme is being implemented under the Producer Responsibility Obligations (Packaging and Packaging Waste) Regulations 2024. It is administered by PackUK, a body within the Department for Environment, Food and Rural Affairs (Defra), and operates across all four UK nations. Producers must register with their respective environmental regulator and report packaging data.
In April 2025, the revised scheme started to be phased in across the UK. It will put the full cost of collecting, sorting, recycling and disposing of household packaging waste onto packaging producers rather than on local authorities. Household recycling will continue to be managed by local authorities who will receive funding through pEPR
Each part of the UK will separately evaluate the scheme, with the first review due to be completed by December 2028 [1].
Fees and Payments
Large packaging producers (those that have a turnover of £2 million and handles more than 50 tonnes of packaging per year) must pay fees based on the amount and type of household packaging they supply. These fees are passed to local authorities via PackUK. The government estimates the shift in cost from local authorities to producers will total around £1.2 billion annually. Local authorities are expected to use the funding to improve recycling services and infrastructure. PackUK can reduce funding to a local authority if there is evidence it is being spent elsewhere.
In the first year (2025 to 2026), producers will pay flat base fees per tonne of material. These reflect average handling and recycling costs and are not adjusted for recyclability. For example, the base fee for plastic is £423 per tonne, while for glass it is £192. From the second year (2026 to 2027), fees will be adjusted and based on recyclability, using a red–amber–green (RAG) rating system. Packaging rated green will incur lower fees, while red-rated packaging will attract higher charges.
Modulated Fees
One of the key parts of the revised scheme is the introduction of modulated fees for large producers, which are designed to encourage businesses to make more environmentally responsible choices.
Under this system, (which will apply from the 2026 to 2027 scheme year), the fees that packaging producers pay will vary according to the recyclability and environmental impact of their packaging materials:
Lower fees will apply to packaging that is easier to recycle, made from materials with a lower environmental impact, or designed for reuse. Higher fees will be imposed on packaging materials that are harder to recycle, have a greater environmental impact, or contribute significantly to waste.
The formula used to calculate modulated fees: Total Modulated Fee = (Weight of Material x Base Fee per Material x Recyclability Factor)
Weight of Material: The total weight of the packaging material (in tonnes) that the producer has placed on the market.
Base Fee per Material: Each material category (e.g., plastic, glass, paper) has a specific base fee, which is set by the regulatory authority. These base fees reflect the environmental impact of each material, with more polluting materials incurring higher base fees.
Recyclability Factor: This factor adjusts the fee based on how easily the packaging material can be recycled. Materials with higher recyclability have lower factors (e.g., 0.5), while less recyclable materials have higher factors (e.g., 2.0). This adjustment reflects the additional environmental burden of less sustainable packaging [1]
PackUK
On the 23 March 2026 UK Packaging (PackUK) were appointed as the Producer Responsibility Organisation (PRO) for the UK's packaging Extended Producer Responsibility (pEPR) scheme [2].
UK Packaging PRO is a producer-led organisation created to help deliver one of the most significant environmental programmes in a generation. pEPR will help drive the shift to more recyclable materials and reduce waste from going into the nation’s landfills.
UK Packaging PRO has brought together more than 100 of the UK’s largest brands, retailers and trade bodies, supported by the Food and Drink Federation (FDF) and the Industry Council for Packaging and the Environment (INCPEN), amongst others [2].
Packaging Recovery Notes (PRNs) and Packaging Export Recory Notes (PERNs)
Packaging recovery notes (PRNs) and packaging export recovery notes (PERNs) are official certificates that prove a tonne of packaging waste has been recovered and reprocessed, or exported for reprocessing. These certificates are issued by accredited waste reprocessors (companies or facilities that turn discarded packaging into new products) and by exporters who handle packaging waste. Large producers purchase PRNs and PERNs as evidence that the packaging waste equivalent to their recycling obligation has been processed. A producer compliance scheme (an organisation that helps packaging producers meet their EPR legal obligations) or the producer themselves reports these PRNs/PERNs to the environmental regulator (for example the Environment Agency in England) [1]
Large producers must obtain PRNs and PERNs for each type of material they place on the market, in amounts that match their recycling obligation. This obligation is based on annual recycling targets set by the government and shown in the table below. For example, if a producer placed paper packaging on the market in 2026, they would need PRNs or PERNs covering 77% of the total weight of that paper packaging, rounded to the nearest tonne [1].
