Reduction or recycling of packaging waste can be promoted in various ways. For the UK, the direction of travel is to make businesses fully account for the costs of recycling packaging and set the fees payable by those businesses in a way that encourages reduction and/or recycling of packaging waste. To do so, the Government needs the latest data to work from and such data needs to be first collected and reported by relevant businesses.
The Packaging Waste (Data Reporting)(England) Regulations 2023 (Data Reporting Regulations), which came into force on 28 February 2023, require “producers” to collect and, depending on their turnover and the volume of packaging or packaging materials that they supply in the UK, report detailed data on the packaging that they supply in the UK. The Data Reporting Regulations assume the introduction of other legislation which, once introduced, will expand the scope of the producers who will be responsible for the recycling costs of packaging waste to beyond those covered under the current rules.
Background
Several consultations relating to recycling and waste management took place in the UK in recent years. The Data Reporting Regulations are based on the Government response to the consultation on Extended Producer Responsibility (EPR) for Packaging, which was published on 26 March 2022 and sets out wider changes to the existing EPR regime under the Producer Responsibility Obligations (Packaging Waste) Regulations 2007.
The Government’s position in its response to the consultation was that current producer responsibility system does not cover the full disposal costs of packaging waste. The new legislation on extended producer responsibility for packaging (new EPR Regulations) is expected to be introduced separately with a view to making producers more responsible for the costs of their packaging throughout its life cycle. This, coupled with the fees payable by the producers, is expected to encourage producers to reduce their use of packaging and use packaging which is easier to recycle.
The Data Reporting Regulations precede the new EPR Regulations that the Government plans to implement from 2024 (although no draft has been published) and are expected to last only until the new EPR Regulations come into force. The obligations under the Data Reporting Regulations are expected to be replicated in the new EPR Regulations and continue under those regulations. We are in an interim period where only part of the wider new EPR regime in the form of data collection and reporting obligations has become law while the system in which such data will be used does not exist.
The headlines
The scope
The Data Reporting Regulations apply to persons with a registered office in England or, if none, the head office or principal place of business in England. They also apply if the registered office, head office or principal place of business is outside the UK but a branch or postal address is in England. Separate regulations apply to other parts of the UK.
If both the person’s annual turnover and the aggregate turnover of the companies in the same group which are producers in the last financial year before 7 April were £1 million or less, and/or each of the aggregate amount of packaging or packaging material and that of the companies in the same group which are producers supplied in the UK (excluding exempt packaging, for example, packaging that has been exported from the UK) was 25 tonnes or less, then the data collection or reporting obligations under the Data Reporting Regulations do not apply although special rules apply if there is a merger.
Who is responsible for what
If you are in-scope, the following things need to be assessed in light of your role in connection with the relevant packaging or packaging material:
- The packaging or packaging material in respect of which data must be collected differ depending on the type of “producer” into which you are classified i.e. brand owner, packer/filler, importer, distributor, online marketplace operator, service provider, seller, pub operating business or licensor. The businesses that will be classified as producers will be broader than that under the current rules.
The packaging or packaging material that is relevant to each producer is specified so that there will be one producer who is responsible for the data on the same in-scope packaging or packaging material. For example, a person who manufacturers or imports unfilled packaging and supplies it to another person is classified as a distributor and is responsible for data on any unfilled packaging manufactured or imported by it and supplied to a person. However, this does not apply when the packaging is supplied to a large producer (as discussed below) who has the data collection and reporting obligations or where a brand owner is treated as the producer once it is filled (for example because the packaging becomes branded).
- The size of the turnover and the amount of packaging waste a producer supplied in the UK determine whether the producer must collect and report data or only collect data. There are two types of producers:
- large producers, whose turnover in the last financial year before 7 April was over £2 million and who supplied in the UK in aggregate more than 50 tonnes of packaging or packaging waste; and
- small producers, whose turnover in the financial year before the same date was more than £1 million but not more than £2 million and who supplied in the UK in aggregate more than 25 tonnes but 50 tonnes or less of packaging or packaging waste.
The same thresholds apply to a group of companies and each producer within the group is classified as a large or small producer accordingly.
Large producers must both collect and submit data. Small producers must only collect data however the Government has indicated that they will be expected to submit data under the new EPR Regulations. This means that small producers do not have to report any data at least in 2023 while the Data Reporting Regulations are in force but will likely to be asked to do so in 2024 once the new EPR Regulations come into force.
- Packaging includes all products to be used for the containment, protection, handling, delivery and presentation of goods from raw materials to processed goods. Packaging is classified into four types: primary, secondary, tertiary and shipment. There are over seven packaging categories: aluminium, glass, paper or board, plastic, steel, wood and “other materials” which under the guidance could include, for example, biodegradable plastics, cork, cotton and rubber. The classification is relevant as the data needs to be broken down by (among other things) each packaging category and packaging type.
Certain data also need to be broken down “by nation” within the UK. Small producers and brand owners who are large producers must collect the data, for each of England, Wales, Scotland and Northern Ireland, and for each packaging category, the weight of (i) all packaging the producer supplies, where the producer is a seller, online marketplace operator, distributor or service provider; and (ii) all packaging the producer discards, where the producer is an importer. Other large producers must also report the volume of its or other person’s packaging waste that it collected from each nation within the UK and the amount sent for recycling to another nation.
When to report
If you are a large producer, the first report must be submitted on or before 1 October 2023 for the six months ending on 30 June 2023 or, if you do not have sufficient data to report on the period between 1 January and 28 February, from 28 February to 30 June 2023, although guidance says that data must be collected from 1 March 2023 (England, Northern Ireland and Scotland) and from mid-2023 for Wales. Thereafter, data must be submitted twice a year, on or before 1 April for the period 1 June to 31 December and 1 October for the period 1 January to 30 June. Format of the data file and other technical details can be found in guidance issued by the Government.
What does this mean in practice
Your obligations under the Data Reporting Regulations can be different for each supply chain. This can depend not only on your role in the handling of the packaging, packaging material or packaged goods concerned but also on other businesses’ relationship with or their handling of those items.
To find the details of your obligations under the Data Reporting Regulations, you need to identify the type of producer into which you are classified for each supply chain, the packaging or packaging material in respect of which you are responsible as a producer and whether you are a large or small producer. There is an online tool for this assessment to start with.
Those who sell packaged products into the UK but have no presence in the UK are likely to be asked by their importers (or an online marketplace operator if you sell on a third party online platform) established in England (or other parts of the UK under other regulations) to provide relevant data for the importers (or the online marketplace operator) to comply with their obligations.
Next steps – and what to look out for
You may need to request information from other businesses. Your compliance with the Data Reporting Regulations may depend on timely provision of data by third parties and their accuracy. This could mean an introduction of a procedure for receiving relevant data every six months in a certain format and ensuring the accuracy of data that will be provided. You might wish to check whether they can be achieved under the existing supply or other agreements and if not consider taking necessary steps.
The fees that will be charged under the new EPR regime are not known. The formula that will be used in calculating those fees have not been published either. Therefore, it is yet to be seen whether the new recycling fees should or could be passed onto those in the upstream of the supply chain and how and to what extent this might affect the pricing or the packaging or packaging material that is used for the goods placed on the UK market. Future publications of the new EPR Regulations and related guidance need to be monitored.
Whilst guidance and other publications have been issued to help businesses comply with the Data Reporting Regulations, they also discuss the rules that are envisaged under the new EPR regime as if they would be implemented as envisaged even though there is not even a draft bill for the new EPR Regulations. Details of the new EPR regime are yet to be seen and the timing of implementation could move (as happened with the implementation of the Data Reporting Regulations) although that does not necessarily mean that the preparation for the new EPR regime should be paused.
Authored by Michiko Jo.
