The Environment Act 2021 may have been in place for a year, but this new legislation has the power to trigger future regulations – laws which would impose the full net costs of managing items at the point of disposal on the producer of materials or products.
Disposal is broadly defined and includes not only wastage but also re-use, recycling, recovery and redistribution. In other words, the Act enables the UK Government to manage the impact of products and their packaging throughout their entire lifecycle.
Further to this objective, new regulations are set to come into effect in January 2023, which will impose additional obligations on how those organisations responsible for packaging undertake their recycling responsibilities. The businesses affected by the new rules must take steps to collect correct packaging data from 1 January 2023.
What is the impact for packaging businesses?
The new regulations will apply to all UK businesses (including those based online) that handle and supply packaging. The size of an individual organisation determines the steps required to be taken:
Small organisations are defined as:
· Having an annual turnover of between £1m to £2m and being responsible for handling and supplying more than 25 tonnes of empty packaging or packaged goods through the UK market in a single calendar year
· Having an annual turnover of over £1m and being responsible for handling and supplying between 25 to 50 tonnes of empty packaging or packaged goods through the UK market in a calendar year.
Large organisations are defined as having an annual turnover over £2m and being responsible for handling and supplying more than 50 tonnes of empty packaging or packaged goods in the UK in a calendar year.
Packaging activities are broadly defined and include packaging own-brand products to sell to UK consumers; using a third party to package and sell own-brand goods to UK consumers; allowing third parties based outside the UK to sell packaged products or empty packaging through an online marketplace, and making and then selling empty packaging to third-party organisations that do not need to take action under the regulations.
What action is required?
All organisations affected, regardless of size, will be required to:
· Take steps to record data about the empty packaging and packaged goods that they handle and supply in the UK from 1 January 2023
· Register for the Extended Producer Responsibility packaging online service (the portal opens for small businesses in 2024)
· Pay an annual fee
· Submit data about empty packaging and packaged goods they handle or supply through the UK market.
Large organisations are required to submit data every six months, with smaller organisations submitting on an annual basis, and a late submission of data could result in a penalty charge.
In addition, large organisations must also buy packaging waste recycling notes (PRNs), or packaging waste export recycling notes (PERNs).
The data required to be submitted must include:
· Individual materials used in the packaging, which is handled and supplied
· Materials used in primary (sales unit), secondary (shipment unit) and transit packaging
· Packaging that is likely to become household or non-household waste
· Packaging that is likely to end up in street bins.
Data generated during 2023 will be used to calculate the relevant fee for individual organisations for the following year, as well as the number of PRNs and PERNs which must be purchased to cover the following year’s recycling obligations.
The data relating to the weight of individual material types should be recorded separately to the nearest 1,000kg and must be categorised into material composition including, for example, aluminium, glass, plastic, paper and steel.
The new regulations and obligations on businesses to submit packaging data marks a significant acceleration of the move towards the extended producer responsibility objectives of the Environment Act 2021, and the incentive to reduce unnecessary packaging.
Whilst the data collection exercise is itself unlikely to be controversial, or difficult to obtain, businesses do need to be aware of the new regime and ensure they have procedures in place to capture the required information as soon as it is required.