The government is to announce major concessions to the food and wider packaging industry over the rollout of its controversial extended producer responsibility (EPR) strategy in a bid to prevent a full scale producer rebellion from derailing the scheme.
The Grocer understands Defra will include amending the EPR regulations to appoint a producer responsibility organisation (PRO) to tun the scheme, in a similar way to the DMO appointed earlier today to run the deposit return scheme system for plastic drinks containers.
Its understood Pack UK, the body set up by Westminster to oversee packaging policies in the UK, will launch a formal process to appoint a PRO in October, with a bid being lined up by the FDF seen as favourite to take over running of the scheme.
Meanwhile Defra is also going to announce a series of further measures to try to tackle concerns over the operation of EPR before it comes into force in October.
Its measures will include making exemptions from the impending EPR bills for so-called closed loop recycling schemes, such as that offered for care homes by the meals on wheels service for elderly people Apetito, which sources said could become a model for a series of new closed loop launches.
At a stakeholder forum held today, Defra also confirmed it was bringing forward plans for the acceptance by HMRC of mass balance accounting from 2029 to April 2027, another major concession by ministers.
EPR under threat
The moves announced by Defra come with the government facing the prospect of major companies withdrawing support from the EPR rollout.
In February, The Grocer exclusively revealed food and drink bosses had threatened to withdraw support unless ministers promise to take concerted action to mitigate its impact.
At the time, the FDF told circular economy minister Mary Creagh patience had run out among manufacturers, as well as retailers, as the £1.4bn bill due to hit companies in October got closer.
The Grocer understands the new moves will ensure that the FDF continues to support the rollout of the scheme, although EPR will still continue to be hugely controversial. Producers using glass are particularly angry at sky high fees for the material, while small producers claim they were not given adequate information about the fees, which they say will put many out of business.
However, it is understood ministers have promised to tackle another major industry concern, when it comes to the ring fencing of the funds from EPR. Defra is set to announce that the governments of the four nations are looking at bringing forward a programme to support and strengthen the UK’s recycling infrastructure to ensure it works closely in tandem with the funds raised by EPR.
Incentives
Defra is also looking at further measures to support and incentivise improved efficiency and effectiveness of local authority services to manage packaging waste.
The Grocer revealed in October that Creagh planned to cede elemnts of power over EPR to a new producer-led organisation, with the minister and her counterparts from the Welsh, Scottish and Northern Irish governments agreeing to measures to lead to a producer responsibility organisation (PRO).
In March the FDF announced former M&S head of packaging and OPRL director Karen Graley had been appointed as head of the new Producer Responsibility Organisation (PRO).
However, today’s sweeping changes go much further in putting manufacturers in the driving seat.
“EPR is a once in a generation opportunity to revolutionise our recycling and use of packaging, building on best practice in the UK and around the world,” said Jim Bligh, director of corporate affairs and packaging at the FDF.
“Every successful EPR scheme is run by producers, who are now legally on the hook for pushing up recycling rates.
“For many years, we have urged the UK’s governments to follow international best practice and hand over as much responsibility as possible to producers, through appointing a Producer Responsibility Organisation (PRO).
“We are delighted that the four nations are legislating to appoint a PRO, which gives industry the green light to drive forward an EPR scheme that will work collaboratively across the value chain to create the innovative and effective recycling system the UK needs.
He added: “We’re also pleased to see that government has listened to industry’s concerns and changed the law, so that it no longer unfairly penalises innovative manufacturers that use their own closed loop recycling systems.”
Industry-wide support needed
Graley said she hoped the FDF’s bid would enable a strong cross-industry body to drive an effective EPR system.
“FDF has convened more than two dozen leading businesses from across sectors to develop a PRO which enables a circular economy for packaging recycling,” she said.
“Our vision is for a collaborative, representative not-for-profit organisation that supports industry to cut its use of packaging, supports councils and waste managers to improve recycling performance, and ensures value for money for producers’ billions of pounds of fees. We will now submit a formal expression of interest to be appointed the PRO, and we would be delighted to involve any obligated producers in this important work.”
Bligh added: “While many of the changes made by government are huge leaps forward in the right direction for EPR, there’s still significant work to be done to make the policy viable ahead of its fast-approaching start date.
“Food and drink manufacturers support EPR in principle, because it is a proven way of creating a circular economy for packaging recycling. But EPR will cost producers billions of pounds from this year, and is likely to push up food prices.
“So it is imperative that government and businesses work together to ensure this investment delivers a return, and that we have an efficient and effective recycling system for household packaging waste.
“Government should go further as soon as possible by ensuring producer fees are ring-fenced at local authority level, so money invested in recycling is spent on recycling.”
“This includes the fact that government’s current definition of ‘household waste’ simply doesn’t work. With the current phrasing, food and drink that is consumed at bars, restaurants, and even by hospital patients, will still be classed as ‘household waste’. This is unfair. We urge the government to resolve this issue and prevent both the NHS and consumers from unnecessarily spending millions of pounds by double-paying for waste collection.”
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