Valpak Policy Advisor, Henry Smith discusses the aftermath of the UK General Election and its implications for environmental policy. He highlights the industry's need for stability and touches on the urgency for new ministers to clarify Extended Producer Responsibility (EPR) fees and eco-modulation to help industries prepare for future financial obligations.
Industry is craving certainty from the new administration. It is fair to say that many stakeholders were disappointed that mentions of the resources and waste reforms were few and far between across the election manifestos, and not mentioned at all in the Labour’s manifesto nor during the campaign. Despite this, the incoming Defra secretary of state, Steve Reed, has listed in his top priorities the desire to ‘create a roadmap to move Britain to a zero-waste economy’, creating optimism across the sector that Defra won’t be forced to place the brakes on reforms now over a half-decade in the making. The recent announcement that Mary Creagh would take on responsibility for the recycling brief is further cause for optimism, as she has prior experience in our sector, having worked on relevant select committees during her time in opposition.
Should ambitions to introduce EPR fee and payments from October next year remain, there is not long for new ministers to provide the assurances on the future of the reform programme and pick up where the last administration left off. The first, and likely most significant action to take is undoubtedly the publication of EPR base fee estimates, previously expected to be published alongside a new round of industry consultation on eco-modulation.
Without this clarity on first full estimates of the impact of the scheme on producers, it will be hard for industry to budget adequately for their 2025 financial obligations. Further, the need to receive more information on the direction of travel for eco-modulation is nearly comparable, given that should modulation of fees still be pencilled in for mid-2026, producers would have to capture packaging going onto the market in 2025 by new, more detailed parameters.
But publishing the consultation is only one side of the equation. The experience endured by those eager to inform the reforms has shown that it’s equally important for Defra to respond to consultations held with decisions and next steps; with multi-year waits for responses frustratingly frequent in recent times.
Looking towards the remainder of the year, The Producer Responsibility Regulations (Packaging and Packaging Waste) 2024, which will facilitate the charging of EPR fees, eco-modulation and labelling requirements have now cleared their notification period with the EU and World Trade Organisation (WTO). This should enable Defra to move to presenting that legislation in parliament in the Autumn. Assuming it completes the parliamentary process unhindered, producer obligations in 2025 would look markedly different, with producers relieved of reporting under the 2007 Packaging Waste Regulations.
Whilst that may seem a lot to be getting on with, Valpak is keen that other important matters are addressed sooner rather than later. For us, the matter of Packaging Waste Recovery Note (PRN)/ Packaging Export Recovery Note (PERN) reforms is too often overlooked, especially with it being the only financial mechanism that’s confirmed to be in place next year.
Earlier this year Valpak, alongside leading representatives across the packaging value chain, wrote to Defra officials urging them to look again at the opportunity for reforming the PRN mechanism to protect market stability, and whilst Defra were initially welcoming of our input, little appetite to re-investigate the matter has prevailed since. Hopefully the new administration will understand the great benefits that reforms to the PRN system could lead to, but also appreciates the risk that inaction poses.
On the topic of opportunity, we’re hopeful the HMRC will also take heed industry’s calls to confirm the allowance of mass balance accounting for chemically recycled plastic and reassess the allocation of revenues raised by the Plastic Packaging Tax. For us it is undoubtedly time to reinvest the Tax revenues into supporting the circular economy and investing in our domestic recycling infrastructure.
The new Defra ministerial team has much to do but many across industry remain optimistic that the long-awaited clarity of direction will now be firmly cemented, and so we can now look to fully establish pEPR in the UK and begin the task of rolling out the other reforms to the UK’s waste management system in a manner that is efficient and fit for purpose.