Extended producer responsibility fees are to rise by “hundreds of millions” of pounds under government plans for manufacturers to shoulder the cost of burning tens of thousands of tonnes of household plastic.
The plans were revealed in a briefing by Defra bosses this week. They will see local council costs for energy from waste and incineration passed on to the industry in the form of even more eye-watering EPR bills than when the first invoices for the new strategy land next month.
Sources told The Grocer there was “outrage” over the plans, with ministers accused of using the food and drink industry as a “cash cow” to meet the cost of its environmental pledges.
They claimed that a lack of government investment in recycling infrastructure and the failure of policies such as the plastic packaging tax to stop a tide of imported single-use plastic had encouraged local authorities to burn huge quantities of plastic packaging, rather than look to recycle.
A source told The Grocer: “If the government decides to do this it’s going to push up food prices even more. This is yet another example of the government treating the food and drink industry as an easy cash cow.”
Bombshell plans
Defra presented the bombshell plans to waste authorities, recycling experts and producers yesterday, revealing that ministers had decided to go ahead with expanding the so-called UK Emissions Trading Scheme (UK ETS).
Spearheaded by the Department for Energy Security & Net Zero (DESNZ) under Ed Miliband, the four-nation policy was brought in after Brexit for sectors including power and aviation. It is meant to drive move to lower carbon emissions.
After a consultation earlier this year, DESNZ has now decided to expand the scheme to other sectors including council energy from waste and waste incineration. Trials of how the scheme will operate are due to run over the next six months.
No date was given for when the costs will be added to EPR fees. However, the briefing confirmed that sectors in scope of the plans would include direct emissions from energy from waste and waste incineration processes used by local authorities. The sectors are set to be given a cap on the amount of greenhouse gases that can be emitted, which will be reduced over time so total emissions fall.
“The UK ETS is our principal mechanism for pricing the “carbon externality” that greenhouse gas emissions represent, in line with polluter pays principle”, the presentation, seen by The Grocer, says.
“Expanding the scheme to include energy from waste and waste incineration will increase the coverage of the scheme and capture more emission and should lead to positive decarbonisation outcomes for the sector.
“It added: “This is a significant policy intervention into the waste sector during a time of wider collection and packaging reforms – we need to ensure we maintain the waste hierarchy and complement existing and upcoming environmental and waste policies.”
While it did not set out a timeframe, the government made it clear that the industry would be expected to foot the bill by “passing costs back to producers”.
“The UK ETS will align with packaging EPR so that ETS costs incurred by local authorities for disposing of packaging materials through incineration are considered as part of the EPR payments.
The industry source told The Grocer: “There is absolute outrage over this, especially coming at a time when a huge proportion of the cost to industry and therefore pressure on inflation and shoppers bills are coming from government interventions and taxation.
“We believe local authorities should not be doing this in the first place. Burning plastic is a lazy and environmentally damaging way to handle plastic, what they ought to be doing is recycle it, but there is a huge shortage of recycling facilities and a massive influx of cheaper virgin plastic.
“The government wants to decarbonise the waste sector but they are penalising the food and drink industry, which is completely unfair.
“We are telling ministers that this is going to push up prices and push up the cost for shoppers at the till. This is not our responsibility – we don’t have any control over the authorities and their investment infrastructure.”
Recycling report
The shock revelation comes just days after a landmark report revealed more than 150,000 tonnes of flexible plastic could be recycled across the UK within two years but that the potential was being held back because of a critical lack of recycling facilities.
The result of the three-year FlexCollect trial, backed by a raft of leading food manufacturers, showed the market for kerbside collection of flexible plastics was affordable, scalable and had widespread backing from the public.
However, it also revealed the UK had insufficient recycling capacity to meet anticipated demand from 2027, when the government’s Simpler Recycling measures will make it compulsory for councils to collect the material, paid for by the industry under the incoming extended producer responsibility packaging tax.
A government spokesperson told The Grocer: “We are committed to cracking down on waste as we move towards a circular economy.
“Extended producer responsibility for packaging will generate more than £1bn annually to improve recycling collections, benefiting every household across the country, and we have engaged extensively with industry throughout, including on aspects related to the Emissions Trading Scheme.
“Together our packaging reforms will create 25,000 jobs and help stimulate more than £10bn investment in recycling over the next decade.”
The government said EPR would not be used to pay the full extent of local authorities’ ETS liabilities relating to waste.
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