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Packaging modulated fees

Are you aware of how the packaging modulated fees will impact your business? Act now to mitigate increased costs.
What are packaging modulated fees?

What are packaging modulated fees?

Modulated fees for packaging were first suggested by government in the Resources and Waste strategy in 2018 and are set to be implemented in place of the PRN evidence system that currently exists. They will be used to financially incentivise the use of more sustainable and recyclable materials, with the fee adjusted depending on the environmental impact of the material that a producer places on the market.

Am I affected?

If you are a producer of packaging in the UK, you will likely be part of the Extended Producer Responsibility system and therefore will be affected by modulated fees. The small producer exemption for those placing less than 50 tonnes of packaging on the market and with an annual turnover under £2 million will remain under EPR, but those placing more than 25 tonnes of packaging on the market with an annual turnover of more than £1 million will have reporting-only obligations under the modulated fee system from 2024.

When is it taking place?

Extended Producer Responsibility for packaging is scheduled to be implemented in 2024. However, liable producers will have to start preparing for more detailed reporting requirements that will be introduced in 2023. This is so, in the first year of EPR, producer costs can be shaped by material type against the modulated fee criteria. By 2025 the costs will be based on mandatory recyclability criteria designed by the scheme administrator. The above will only apply to packaging that exists in the household waste stream, the current producer responsibility – or ‘PRN’ – system will remain in place until 2026/2027 and act alongside the new system until then.
Find out more about the consultations

How much will modulated fees cost?

The actual costs of the modulated fee system will be confirmed after the consultation process when government have finalised key decisions. As yet there is no information on the potential costs producers may incur. However, we do know that less sustainable materials will attract higher fees. For instance, hard to recycle plastics such as polyvinyl chloride and polystyrene will cost producers more than easily recyclable materials. Implementing more re-use activities and refill systems, where possible, will also certainly be rewarded in the new system.

What do I need to do now?

Government have yet to release detailed guidance, so the details surrounding the methodology and processes producers will have to adhere to for modulated fees are not yet fully known. However, we strongly advise you to start preparing now to ensure that your business is ready for when modulated fees are implemented. Here is what you need to do:

1. Make sure you stay fully informed

It is important that you stay abreast of the latest updates from government as they will directly impact your business, from the official consultation responses to the draft and implemented legislation. Being fully informed means you can ensure your wider team not only know the impacts to expect, they can respond proactively sooner. We inform our members of important milestones and updates and we always publish the latest news on our website.

2. Ensure you are capturing the right data

Modulated fees will require a much higher level of data reporting than the current packaging compliance requirements. You don't need to wait until modulated fees are implemented to start this. By collecting this level of detail now, you will achieve full transparency of the potential impact on your business and you will be able to efficiently comply when they come into force. Our team can get you started with this requirement now, contact us to find out how.

3. Start modelling your costs 

Once you have control of your data, you can model your costs to assess the full impact of modulated fees, before it comes into force. Our team are on hand to enable you to do this with the minimum of fuss, contact us to find out more.

4. Adapt your strategy ahead of the legislation implementation

The main driver of modulated fees is to incentivise better material use for packaging placed on the market. With full control of your data you can start to take strategic decisions about how to reduce the environmental impact of your packaging and your modulated fee costs. Our team are again on hand to help you do this, contact us to find out more.

 

 

Contact the Ecosurety team for help

We are here to support you

If you think you will be affected by modulated fees, we can assist you through data assurance and analysis, including cost forecasting to model how your business will be impacted so that you can be fully prepared - helping you to budget for the increased costs and reduce the environmental impact of your packaging.
Request modulated fee support now

Future services and support

We are developing further services to support our members with the future requirements of packaging EPR and are working with government and industry to seek further clarification on the mechanics and requirements of modulated fees. We will continue to offer guidance as legislation is updated and we will let our members know what further support we will provide in the future.

Find out more about packaging EPR

Discover if other Extended Producer Responsibility measures will impact you, including the Plastic Packaging Tax and the Deposit Return Scheme.
Find out more