‘Competition is a must for EPR reforms’

We are urging all stakeholders to consider some of the implications of Defra’s EPR consultation in relation to cost and competition proposals and consider the importance that a competitive model would play in managing producers costs and ensuring the success of the new system.

It has been proposed that the introduction of EPR into the UK will cost obligated producers around £2.7 billion per annum. To put this into context, the current PRN system costs producers around £375 million per annum. The difference is staggering and clearly the cost increases to producers will be eyewatering.

It’s just not producers who may raise an eyebrow or two; the proposals in the consultation also appear to suggest a shake up of how the waste industry in the UK is funded. The formation of a central scheme administrator with powers to dictate the price for collection and sorting costs net of any value seems to be firmly on the cards. Agreeing and setting rates of funding for local authorities may be palatable, but setting rates that interfere in commercial waste contracts between two private companies would appear challenging, certainly given the myriad strict UK competition laws.

Healthy competition

Healthy competition has always been part of the foundation of all of our producer responsibility regimes and EPR for packaging should be no different.

Competition will drive innovation, competition will give stakeholders choice and, above all, competition will manage cost, which is vital and fair to producers, who after all are facing a tenfold increase in their annual compliance costs. Competition is also fair to waste operators who should be left to manage their businesses accordingly.

There is no doubt that the new system will need a central scheme administrator. Setting the rules around modulating fees, agreeing a standard set of recycling labels, coordinating national advertising campaigns and distributing funds to local authorities could be carried out successfully by a central body, but extending its remit to managing and controlling the entire system, extracting huge amounts of data and massive sums of money from producers without question whilst interfering in the commercial operation of the waste industry, would almost certainly not deliver the government’s desired outcomes and would most likely be open to legal challenge.

‘Once in a generation opportunity’

Reading between the lines, it seems that the government recognises some of these issues. References to concerns of barriers to market and governance model options which recognise competitive models are all cited within the consultation. Competition is even one of the governing principles of EPR.

However, the government has stated that it currently does not have a preferred option and therefore we urge all stakeholders to take this once in a generation opportunity to respond to the consultation and help build a system that delivers the desired outcomes, is cost effective and is above all a new system that is fair and proportionate to all stakeholders.