Before approving the measure, the Lords heard how the new system would help “squeezed council budgets” and consumers could face up to £48 extra costs (at 2019 prices).
The regulations – Packaging Waste (Data Reporting) (England) Regulations 2023 – are being hurried through parliament as they are needed to ensure obligated producer businesses record appropriate data during 2023 so their bills can be worked out when the legislation comes into force in 2024.
Full cost
Yesterday (21 February), Lord Benyon, minister of state at the Department for Environment, Food and Rural Affairs, told the Lords committee reviewing the regulations of the thinking behind the new system. He said: “Extended producer responsibility will move the full cost of dealing with packaging waste away from households, local taxpayers and councils and on to its producer. Producers will pay fees to cover the cost of collecting and treating household packaging waste handled by local authorities.”
The UK has had the PRN system in place since 2007 but the new producer responsibility system will bring greater obligations for producers along with a range of changes as well as extra costs.
Cost shift
An important change will be direct funding for local authorities. Lord Benyon highlighted how there will be a shift of cost from local authorities to producers and that this would provide “an estimated £1.2 billion of funding to local authorities across the UK each year for managing packaging waste, easing the pressure on squeezed council budgets.”
Lord Benyon added that when extended producer responsibility is introduced in 2024, there will be additional costs for businesses that handle packaging through the fees they will be obligated to pay. “This will result in a net gain for the public sector, as producers make payments for the costs of managing household packaging waste by local authorities.”
However, while local authorities may gain a new income stream to cover the cost of packaging recycling, consumers could face higher bills.
Producers
Lord Benyon, in response to questions, said that it is up to producers how much of their additional costs they pass on to consumers. Defra analysis, he said, has said that if costs are passed to consumer this could push up the CPI consumer price inflation index by between 0.04% and 0.09%, the equivalent of a household cost of between £24 to £48 per year.
“This data will be used to calculate producers’ recycling obligations and the extended producer responsibility fees that the producers will be required to pay to local authorities from 2024 to cover the costs of managing this packaging once it becomes waste,” the minister added.
Payments under the new system from 2024 to local authorities will take account of equity and regional considerations
“This will encourage businesses to think carefully about how much packaging they use and to design and use packaging that is easily recyclable. It will also encourage the use of reusable and refillable packaging.”
An impact assessment for the regulation notes that the costs were calculated are in 2019 prices. It also notes that payments under the new system from 2024 to local authorities “will take account of equity and regional considerations by looking at rurality and level of deprivation and performance expectations”.
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