Interview: Practitioners on Extended Producer Responsibility (EPR)

With the UK's Extended Producer Responsibility scheme now requiring producers to cover the full net cost of packaging waste management—an estimated £1.7 billion annually by 2025—companies face a fundamental shift in how they design, source, and recover materials. According to DEFRA's 2024 impact assessment, EPR reforms will drive a 65% increase in producer obligations compared to the previous Packaging Recovery Note system, fundamentally reshaping supply chain economics across every sector from FMCG to electronics.

This investigation draws on conversations with sustainability directors, compliance officers, and circular economy practitioners who have navigated EPR implementation at leading UK companies. Their insights reveal not just regulatory compliance strategies, but transformative approaches to product design, material selection, and end-of-life recovery that are redefining what producer responsibility means in practice.

Why It Matters

Extended Producer Responsibility represents one of the most consequential shifts in environmental regulation since the introduction of the landfill tax. The UK's reformed EPR scheme, which began phased implementation in 2024, requires producers to fund the collection, sorting, and recycling of packaging they place on the market—calculated through modulated fees that reward recyclable, reusable, and compostable materials while penalising hard-to-recycle formats.

The financial implications are substantial. The Environment Agency estimates that large obligated producers—those placing more than 50 tonnes of packaging annually—will see compliance costs increase by 200-400% compared to PRN-based obligations. For a typical multinational FMCG company operating in the UK, this translates to annual fees ranging from £15 million to £40 million, depending on packaging portfolio composition.

Beyond packaging, the UK is expanding EPR principles to new waste streams. The 2024-2025 period has seen regulatory development for textiles EPR (consultation closed October 2024), batteries and electric vehicle batteries (new regulations effective January 2025), and electronics (updated WEEE regulations with enhanced producer obligations). The Department for Environment, Food and Rural Affairs projects that comprehensive EPR coverage across these streams will generate £2.3 billion in annual producer funding by 2027, fundamentally transforming waste management infrastructure investment.

For UK-based practitioners, EPR compliance is increasingly intertwined with broader sustainability commitments. The Task Force on Climate-related Financial Disclosures and incoming ISSB standards require companies to report on circular economy metrics, making EPR performance a material consideration for investors and stakeholders alike.

Key Concepts

Biomaterials refer to packaging and product components derived from renewable biological sources—including paper, cardboard, wood-based fibres, and emerging bio-plastics such as PLA (polylactic acid) and PHA (polyhydroxyalkanoates). Under the UK's EPR modulated fee structure, biomaterials that are certified home-compostable or industrially compostable receive significant fee reductions, typically 40-60% lower than conventional plastic equivalents. However, practitioners note that biomaterial classification remains contentious, with the Scheme Administrator requiring specific certification standards (EN 13432 for industrial composting, AS 5810 for home composting) to qualify for reduced rates.

Circularity describes the systemic approach to keeping materials in productive use through design for recyclability, reuse systems, and closed-loop recovery. The UK EPR scheme incentivises circularity through its modulated fee structure, where packaging formats achieving >95% recyclability in practice (not just theory) qualify for the lowest fee bands. Practitioners emphasise that true circularity requires infrastructure alignment—a point underscored by the 2024 finding that only 44% of UK local authorities collect flexible plastics, despite many such formats being technically recyclable.

Certification encompasses the third-party verification systems that validate recyclability, compostability, and recycled content claims. Key certifications relevant to UK EPR include OPRL (On-Pack Recycling Label) for consumer-facing recyclability guidance, REDcert and ISCC for chain-of-custody recycled content verification, and TÜV Austria's OK Compost certifications. The EPR Scheme Administrator accepts specific certifications as evidence for modulated fee calculations, making certification strategy a critical compliance consideration.

CAPEX (Capital Expenditure) represents the upfront investment required to redesign products, retool manufacturing lines, and establish collection infrastructure for EPR compliance. Industry surveys from 2024 indicate that major UK producers have allocated £500 million to £1 billion collectively in EPR-related CAPEX, encompassing packaging redesign, sorting technology, and take-back scheme development. The payback period for such investments typically ranges from 3-7 years, depending on fee modulation benefits achieved.

Battery EPR specifically addresses the end-of-life management of batteries, from portable consumer cells to large-format electric vehicle and industrial storage batteries. The UK's Battery Regulations 2024, implementing post-Brexit domestic requirements aligned with EU Battery Regulation principles, mandate producer funding for collection, treatment, and recycling. With EV battery volumes projected to reach 100,000 tonnes annually by 2030, battery EPR represents a rapidly growing compliance obligation with distinct technical challenges around lithium recovery and fire safety.

What's Working and What Isn't

What's Working

Modulated fee structures driving design changes: Practitioners consistently cite fee modulation as the most effective policy lever. "When we modelled the fee differential between our legacy multi-material sachet and a mono-material PP alternative, the business case for redesign became undeniable," explains a packaging director at a major UK food manufacturer. Companies achieving >90% recyclability ratings report fee savings of 25-35% compared to 2023 baseline projections, creating genuine financial incentives for sustainable design.

Producer collaborations on collection infrastructure: Sector-specific collaborations are accelerating infrastructure development where individual company action would be insufficient. The UK Plastics Pact, coordinated by WRAP, has enabled collective investment in flexible plastic recycling capacity, with participating companies contributing to the Flexible Plastic Fund that has supported 12 new collection trials reaching 4 million households by late 2024. Similarly, the Aluminium Packaging Recycling Organisation has achieved 82% recycling rates for aluminium packaging through shared reverse logistics networks.

Digital tracking enabling compliance verification: The adoption of digital watermarking and chemical marker technologies is solving the long-standing challenge of material identification in sorting facilities. HolyGrail 2.0 pilots in UK MRFs (Materials Recovery Facilities) demonstrated 95% accurate identification of digitally watermarked packaging in 2024 trials, enabling premium pricing for high-purity recycled streams and verifiable compliance reporting.

Reuse systems gaining traction in specific categories: Closed-loop reuse schemes, while still nascent, are proving viable in targeted applications. Loop UK's partnership with major retailers has scaled to 400+ SKUs available in reusable packaging, with return rates exceeding 85% in mature product categories. Deposit Return Scheme infrastructure development (Scotland operational, England and Wales implementing 2025) is creating the logistics backbone for broader reuse expansion.

What Isn't Working

Fragmented local authority collection systems: Despite EPR's promise of consistent, producer-funded collections, the reality of 300+ different local authority collection systems remains a fundamental barrier. Practitioners report that packaging designed for recyclability in one region may be landfilled in another due to collection variations. "We designed a fully recyclable bottle, only to discover that 30% of UK councils don't collect HDPE at kerbside," notes a sustainability manager at a household goods company. The Scheme Administrator's attempts to standardise collections face resistance from local authorities protective of operational autonomy.

Recycled content supply constraints: Mandatory recycled content targets are colliding with physical supply limitations. The UK currently processes approximately 500,000 tonnes of food-grade recycled PET annually, against estimated demand of 750,000 tonnes to meet 2025 targets across obligated producers. This supply-demand imbalance has driven rPET prices to 40-60% premiums over virgin material in 2024-2025, challenging the economic viability of recycled content commitments.

SME compliance burden disproportionality: While de minimis thresholds exempt the smallest producers, mid-sized companies placing 25-100 tonnes annually face compliance costs that can exceed 5% of packaging spend. "The data collection requirements alone consumed 2 FTE for six months," reports the operations director of a regional food producer. Industry associations are advocating for simplified reporting pathways and collective compliance mechanisms for SME clusters.

Biomaterial infrastructure gaps: Despite fee incentives for compostable packaging, industrial composting infrastructure remains inadequate. The UK has approximately 170 in-vessel composting facilities, but fewer than 20 accept food-contaminated compostable packaging. The result is that well-intentioned biomaterial adoption often ends in landfill or incineration, undermining both environmental outcomes and producer investments.

Key Players

Established Leaders

Tesco PLC: The UK's largest retailer has committed £1 billion to packaging sustainability, including EPR compliance infrastructure. Tesco's 4Rs strategy (Remove, Reduce, Reuse, Recycle) has eliminated 1.5 billion pieces of packaging since 2019, with 2024 focus on soft plastic collection points across 800+ stores achieving 3,000+ tonnes annual recovery.

Unilever UK: Operating one of the UK's most comprehensive EPR compliance programmes, Unilever has achieved 99% recyclable, reusable, or compostable packaging across its UK portfolio. The company's Cif ecorefill system demonstrates viable reuse economics, with refill sachets using 75% less plastic than standard bottles.

Nestlé UK: Investing £50 million in UK packaging innovation between 2023-2025, Nestlé has pioneered paper-based wrappers for confectionery and developed closed-loop recycling for coffee capsules through partnership with Podback, achieving 85% recovery rates in participating postcodes.

Coca-Cola Europacific Partners (GB): CCEP has reached 50% recycled content across its GB portfolio ahead of 2025 targets, supported by investment in Esterform Packaging's UK PET recycling facility capable of processing 45,000 tonnes annually.

DS Smith: As both a packaging producer and recycler, DS Smith occupies a unique position in EPR value chains. The company's UK closed-loop recycling system processes 700,000 tonnes of corrugated packaging annually, demonstrating vertically integrated compliance models.

Emerging Startups

Notpla: This London-based startup produces seaweed-based packaging that biodegrades in weeks. Notpla has supplied 2 million+ sachets to events including the London Marathon, offering producers a pathway to zero-fee compostable packaging under EPR modulation.

Polytag: Developing UV-fluorescent tags invisible to consumers but detectable by sorting equipment, Polytag enables package-level tracking through the waste stream. The company's technology is deployed in pilots with major UK retailers, supporting compliance verification.

CLUBZERØ: Operating reusable container systems for food delivery and takeaway, CLUBZERØ has partnered with 500+ UK restaurants and processes 100,000+ reuse cycles monthly, demonstrating scalable reuse infrastructure for food service packaging.

Recycleye: Using AI-powered vision systems for waste sorting, Recycleye's technology achieves 95% material identification accuracy, enabling MRFs to produce higher-purity streams that command premium recycled material prices.

Biome Technologies: Developing bioplastics that meet compostability certifications while matching conventional plastic performance, Biome supplies packaging solutions for applications from tea bags to cosmetics, enabling producers to access reduced EPR fee bands.

Key Investors & Funders

UK Infrastructure Bank: Allocated £500 million to circular economy infrastructure, including sorting facilities and recycling capacity that underpins EPR system functionality.

Circularity Capital: Edinburgh-based growth equity firm with £200 million focused on circular economy investments, backing companies including Reconomy and Grover that enable EPR compliance.

WRAP (Waste and Resources Action Programme): Government-backed charity administering £50 million+ annually in circular economy innovation funding, including the Plastics Innovation Fund supporting EPR-relevant technologies.

Closed Loop Partners: US-based but active in UK markets, investing $500 million globally in recycling infrastructure, including the Beyond the Bag initiative developing reusable shopping bag systems.

SYSTEMIQ: Strategic advisory and investment firm that has mobilised £100 million+ for UK circular economy projects, including the UK Plastics Pact infrastructure development.

Examples

Example 1: Walkers Crisps Packet Recycling Scheme PepsiCo UK's Walkers brand faced significant EPR exposure from its metallised film crisp packets—a format historically unrecyclable in UK infrastructure. In 2024, Walkers partnered with TerraCycle and invested £7 million in collection points across 4,500 locations and a dedicated recycling facility capable of processing 1,500 tonnes annually. The scheme has collected 8 million packets in its first year, reducing the brand's EPR liability by an estimated £2.3 million annually while generating recycled plastic pellets for non-food applications. Practitioners cite this as evidence that even "problem" formats can achieve circularity with sufficient producer investment.

Example 2: Co-op's Compostable Carrier Bag Transition The Co-operative Group transitioned all 2,500 UK stores to certified home-compostable carrier bags in 2023, representing 60 million bags annually. Working with supplier BASF on certified materials and investing £1.2 million in staff training and consumer communication, Co-op achieved verified composting rates of 45% (with remainder recycled or landfilled). The transition reduced the retailer's EPR obligation by £400,000 annually through fee modulation benefits, while consumer research showed 78% positive reception. The case demonstrates successful biomaterial transition at scale, though practitioners note the importance of complementary consumer education investment.

Example 3: Diageo's Glass Bottle Closed-Loop System Diageo implemented a closed-loop glass collection and recycling programme for its Scotch whisky brands in 2024, partnering with recycler Encirc to process bottles collected from 15,000 UK on-trade venues. The system achieves 92% collection rates in participating venues, with collected glass returned to Encirc's Cheshire facility within 48 hours for cullet production. The programme processes 25,000 tonnes annually, reducing virgin glass requirements by 40% and cutting Diageo's glass-related EPR obligations by £1.8 million. The on-trade focus demonstrates viable closed-loop economics in controlled commercial environments, with potential expansion to retail return points under Deposit Return Scheme infrastructure.

Action Checklist

FAQ

Q: How are EPR fees calculated under the UK's modulated fee structure? A: EPR fees are calculated based on packaging tonnage placed on market, multiplied by material-specific and format-specific fee rates set by the Scheme Administrator. Rates are modulated to reflect actual recyclability (not just theoretical recyclability), with discounts for formats achieving >95% recycling rates and surcharges for hard-to-recycle materials. Fees also incorporate regional collection cost variations and are adjusted annually based on system cost data. Large obligated producers must report quarterly, with final fee calculations reconciled annually.

Q: What happens if our packaging is technically recyclable but not collected by most UK councils? A: The EPR scheme bases modulation on practical recyclability—meaning whether packaging is actually collected and recycled in practice, not whether it could theoretically be recycled. Packaging formats collected by fewer than 75% of UK local authorities will typically face higher fee bands regardless of technical recyclability. Producers can improve practical recyclability through investment in collection infrastructure, partnership with Collection Service Providers, or transition to formats with established collection pathways. WRAP's Recyclability Assessment Tool provides guidance on current collection rates by format.

Q: How does battery EPR differ from packaging EPR? A: Battery EPR operates under separate regulations (Battery Regulations 2024) with distinct obligations. Producers must register with an approved battery compliance scheme, meet collection targets (currently 45% for portable batteries, rising to 65% by 2030), and fund treatment and recycling. Large-format batteries (EV, industrial) have additional requirements including battery passports containing material composition and recycled content data. Unlike packaging EPR's modulated fees, battery EPR uses tonnage-based fees with material-specific treatment cost allocations.

Q: Can producers claim EPR fee reductions for using recycled content? A: Yes, the UK EPR scheme provides modulated fee reductions for verified recycled content, though requirements are stringent. Recycled content claims must be supported by mass balance or chain-of-custody certification (ISCC, REDcert, or equivalent). The fee reduction typically ranges from 10-25% depending on recycled content percentage and material type. Post-consumer recycled content receives greater recognition than pre-consumer/post-industrial material. Producers must maintain audit-ready documentation and may face verification requests from the Scheme Administrator.

Q: What are the penalties for EPR non-compliance? A: Non-compliance penalties include financial sanctions up to £250,000 per offence, with daily penalties for continuing violations. The Environment Agency can also issue enforcement notices requiring corrective action within specified timeframes, and persistent non-compliance can result in director liability. Reputational penalties are also significant—the Scheme Administrator publishes compliance data, and major retailers increasingly require EPR compliance evidence as a supplier qualification criterion. Most practitioners recommend conservative compliance approaches given enforcement uncertainty in the scheme's early years.

Sources

Department for Environment, Food and Rural Affairs. (2024). Extended Producer Responsibility for Packaging: Regulatory Impact Assessment. DEFRA Policy Paper, March 2024.
WRAP (Waste and Resources Action Programme). (2024). UK Plastics Pact Annual Report 2024: Progress Towards 2025 Targets. WRAP Publications.
Environment Agency. (2024). Packaging Producer Responsibility: Guidance for Obligated Producers. EA Regulatory Guidance Series.
Ellen MacArthur Foundation. (2024). The UK Plastics Pact: Four Years of Progress. EMF Case Study Series.
British Plastics Federation. (2024). Recycled Plastic Market Report Q3 2024: Supply, Demand and Pricing Trends. BPF Industry Analysis.
House of Commons Environment, Food and Rural Affairs Committee. (2024). Extended Producer Responsibility: Implementation Progress. Parliamentary Report HC 245.
Valpak. (2024). EPR Fee Modulation: Preparing for the New Compliance Landscape. Industry Guidance Document.

Interview: practitioners on extended producer responsibility (epr) (angle 7)