Supermarket and supplier bosses have warned they risk writing a multi-billion “blank cheque” as crisis talks over the government’s flagship environmental proposals ended with calls for the controversial Extended Producer Responsibility (EPR) scheme to be delayed.

Environment secretary Thérèse Coffey held an ermergency meeting with the BRC and FDF along with executives from Marks & Spencer, Nestlé, PepsiCo, Sainsbury’s and Unilever last week, on the rollout of scheme.

However, The Grocer has learnt the talks failed to quash industry fears that EPR is heading for disaster, with just six months to go before major businesses are due to begin paying for the costs of recycling.

This week the leaders of the BRC, FDF and industry packaging umbrella body Incpen wrote a stinging 1,500-word letter to Coffey calling for ministers to “take the time needed” and work with industry to co-design a better scheme, or risk a huge failure in a once-in-a-generation chance to create a more circular economy.

The letter, seen by The Grocer, attacks the lack of ring-fencing for the new charges, which will hit any £1m-plus turnover businesses or organisations handling and suppling packaging to consumers or businesses and responsible for more 25 tonnes of it in a calendar year.

With Defra having held a series of “industry readiness” meetings since November, it emerged supermarkets and suppliers were unaware until days ago of key elements of the plan, including how local authorities will be held to account for spending the money raised by EPR.

“We had not understood with any clarity until last week’s meeting the sequencing your department is following in the rollout of EPR,” says the letter, signed by FDF CEO Karen Betts, BRC CEO Helen Dickinson and Incpen CEO Paul Vanston.

“We were reassured to be told that the regulations you plan to pass on consistent collections of household recycling will contain stretching statutory targets, incentives and penalties for local authorities on the volume and quality of the material streams.

“However, we believe these performance targets must be part of EPR from the outset – that is, from the point at which producers are obliged to pay significantly higher fees for packaging placed on the market, local authorities must be obliged to deliver value for money for those increased payments.

“Without this clarity, as you recognised, the government is in effect obliging producers to write a blank cheque without any legal comfort on what our increased fees are paying for, and with no line of sight of how the circular economy we all agree we need will actually be achieved.”

The letter goes on to say that despite EPR having been in the pipeline for years, industry leaders “do not understand” Defra’s overarching plans for the various regulations needed to implement it.

“We hope it was clear from our meeting how important it is for us to have visibility across the piece – that is, a clear view of all regulations and what they mean strategically for EPR.”

The letter also calls for a maor government rethink on the use of controversial “chemical recycling” for food contact materials, without which it says a “staggering” amount of plastic is ending up in landfill.

“While we acknowledge that chemical recycling isn’t perfect, it’s evolving fast and is, for now, the only method of recycling food contact materials and flexible plastics. The government’s unwillingness to recognise chemical recycling to date is hampering UK recycling rates overall and is leaving the UK behind in developing and investing in new (and exportable) technologies, which are now advancing across much of Europe. We also urge government to permit the mass balance accounting of chemically recycled plastics.”

Retailers and suppliers have long complained that EPR has suffered with a lack of industry involvement in the design. They have also been highly critical of the lack of information from Defra, with a 4,000-word revised guidance document only emerging just over a week ago.

It is a year since the government watered down elements of EPR to reduce the cost to industry, which had faced a £2.7bn annual cost previously. However, the latest talks have failed to pacify concerns.

This week’s letter calls for Coffey to agree to a “dynamic review” of the scheme in partnership with industry and as well as for producers to be included in an EPR pilot in Birmingham, from which they are currently excluded.

It concludes: “We do understand that EPR is complex and we admire your ambition not to allow this complexity to undermine EPR’s rapid rollout. As we say, we want to see EPR create a circular economy in the UK as soon as possible too.

“All in all, it seems to us far better to take the time needed now to deliver this once-in-a-generation opportunity for recycling reform than to risk establishing a scheme that does not deliver.”

A senior industry source told The Grocer: “This letter is an indication of how the industry and the government are poles apart when it comes to the introduction of EPR.

“The whole thing is a total mess and with just months to go before companies are due to start paying, it’s looking more and more like being a spectacular car crash.”

Last month, a survey of of 300 companies by compliance experts Ecoveritas found 86% of companies had yet to establish their data collection for packaging waste, despite being required by law.

It’s understood tens of thousands of companies are still not collecting the data.