DEFRA has issued the second iteration of illustrative base fees for Extended Producer Responsibility for packaging (pEPR).
EPR base fees are the fees charged by the Scheme Administrator across eight packaging categories;
aluminium,
fibre based composites,
glass or board,
plastic,
steel,
wood and
‘other’.
Importantly, aluminium, steel and PET plastic drinks containers in scope of the Deposit Return Scheme (DRS) are excluded from EPR, subject to delivery of a DRS.
Overall, EPR and the fees aim to drive environmental benefits through reduction in packaging waste. The fees collected will be used to make payments to individual local authorities to cover the costs of collection, handling, treatment and disposal of household waste. In year two of EPR will include modulated fees based on recyclability.
It is important to note that whilst the fees published by DEFRA are indicative, they can be used as illustrative costs to help your business to prepare. The next set of illustrative fees will be published in quarter one of 2025, with the final fees being issued in summer 2025.
First Round of Illustrative Base Fees (IBF)
On 15 August 2024, the government (4 nations) released initial illustrative base fees for the first year of pEPR (i.e. fees charged to obligated packaging producers by the Scheme Administrator (SA)).
Given the significant data limitations and huge push back from across a number of sectors about the potential impact of the fees, Government has subsequently published refined figures for the illustrative base fees in September 2024.
How it will work:
- Fees will be incurred from 1 April each year, based on packaging supplied by registered producers for the preceding calendar year.
- Fee rates for the first year of pEPR (2025/26) remain unknown until after 1 April 2025.
- It is expected the Scheme Administrator will issue invoices in early summer each year.
- Modulated fees will be introduced in year two from 2026.
- The types of packaging subject to modulated fees from year 2, and the consequential sub-categories of packaging that would need to be reported in 2025, will be released in autumn 2024.
- Each obligated producer’s fees will be calculated by the Scheme Administrator using the fee formula built into the Fees and Payments Calculator (FPC). The legal provisions for the fee formula are set out in the draft Producer Responsibility Obligations (Packaging and Packaging Waste) Regulations.
Interplay with the Deposit Return Scheme (DRS)
- To support investment in the DRS Deposit Management Organisation(s), aluminium, steel, and PET plastic drinks containers in scope of DRS are excluded from pEPR disposal cost fees.
- Glass drinks containers will be covered by pEPR for packaging. The Welsh Government intends to include glass in the scope of DRS and it will eventually be excluded from pEPR disposal cost fees.
- 1 January 2028 DRS backstop remains - i.e. producers of drinks containers meeting the definition of DRS packaging material will be subject to the full range of EPR for packaging obligations, until a DRS is operational.
Second Round of Illustrative Base Fees (IBF)
On 30 September 2024, the government (4 nations) released updated illustrative base fees for the first year of pEPR. The second iteration of the fees has followed significant feedback from industry and has taken into account further information, including; variation in resale value, differences in estimates of packaging material density.
What has changed?
- Compared to the August set of IBF’s, these revised fees have decreased across all materials.*
- The changes are the result of industry engagement from DEFRA and reflect an increase in the amount of packaging data received. Currently there remains a lower, intermediate and higher price, this represents a range of uncertainty as more data is gathered - for the final fees there will only be one value.
- The size of the ranges has also decreased across all the materials (except for wood, which represents less than 1% of packaging on the market).
- Compared to the first IBF release (which used ‘PackFlow Refresh 2023 reports**), this updated release uses the most recent data submitted by large organisations into the Report Packaging Data online portal system for the calendar year 2023 (extracted on 9 September 2024).
- The requirements to report drinks containers for the calendar year 2023 only applied to England, Northern Ireland and Wales. These requirements will extend to Scotland for data from 2024 onwards.***
Using Report Packaging Data (RPD) to calculate fees
- These second set of IBFs use an updated methodology, generally using 'Report Packaging Data’ (RPD) on producer reported tonnages from 2023 alongside DEFRA-modelled Local Authority (LA) costs.
- Please note the above methodology and datasets used will underpin that which the Scheme Administrator (PA consulting) intends to use for final fees from 2025, with all tonnages based on RPD data.
| * Report Packaging Data tonnage figures could be an underestimate as they do not include data from large producers who have still not reported their data yet (despite having been required to). |
| ** Valpak and WRAP (2024) PackFlow Refresh 2023 Reports. |
| *** As a result, there is a risk that the 2023 Report Packaging Data underestimates the amount of household glass packaging placed on the market. To account for this, estimated tonnages placed on the market from PackFlow’s 2023 Refresh Reports (the same as those used in the first release of illustrative base fees) have been used for glass instead of Report Packaging Data. |
| Material | Lower (£ per tonne) | Intermediate (£ per tonne) | Higher (£ per tonne) |
| Aluminium | 320 | 405 | 605 |
| Fibre-based composite | 355 | 450 | 565 |
| Glass | 110 | 175 | 215 |
| Paper & Card | 135 | 190 | 250 |
| Plastic | 360 | 425 | 520 |
| Steel | 220 | 265 | 330 |
| Wool | 145 | 240 | 340 |
| Other | 180 | 205 | 240 |
Next steps and getting ready:
- Producers have an obligation to report their packaging data through an online portal. The next data for 1 July to 31 December 2024 will need to be submitted from January 2025.
- Post 1st April 2025, Government will release the actual fee rates for 2025/26.
- Although the expectation is for the SA to release invoices early summer next year - this is wholly dependent on a fully functional SA being successfully implemented and operational in time. Therefore, Defra has advised to treat this estimation with caution for now.
- We are working with government to provide further feedback on the illustrative base fees and any behaviour such as material switching as a result. We’d love to hear from you.