SUSTAINABILITY PROJECT
evidence from their plastic packaging suppliers confirming the PPT has been properly accounted for and paid. This can be done in a number of ways, such as merchants asking for details of the amount of PPT paid by a supplier, or the person with primary liability (if different) so that can be included on invoices. Alternatively, it may be that we start seeing clauses included in commercial agreements or contracts to confirm if the packaging is chargeable to PPT and who is liable. Similarly, sourcing evidence that PPT has been accounted for from the business with primary liability may well become standard practice.
What is the Extended Producer Responsibility legislation? The government also plans to bring in Extended Producer Responsibility legislation in 2024 to incentivise the reduction of overall packaging output. The focus will be on plastic packaging or to adopt recycled materials where a significant reduction in volume may not be possible without impacting product quality, transportation or merchant yard safety. Crucially, this is where significant cost increases to individual Suppliers and some merchants is most likely.
January 2023
Under the EPR system, businesses will be financially obligated if they handle over 50 tonnes of packaging materials per year and/ or have an annual turnover of more than £2 million. While this may not impact every Supplier or merchant, many will either handle 25 tonnes of packaging materials or have an annual turnover of £1 million, which is the threshold for the scheme’s annual reporting requirement.
What are the main differences between PPT and EPR? A major difference between the upcoming EPR and the current PPT is that the former aims to recover 100% of the cost of recovery and reprocessing of packaging waste from a single point of compliance, rather than being split throughout the supply chain. As such, Suppliers, brand owners and importers are likely to see a significant increase to their waste management fees as the party with the greatest influence on the packaging format and materials of the products they are placing on the market. By contrast, merchants will be less impacted as most branded products sold through the merchant are generally branded by the Supplier or brand owner before they arrive.
The exception is merchants with their own label products - they will be liable for the EPR. To aid the transition to more sustainable packaging, the Government plans to introduce a combination of modulated fees to adjust the price of compliance based on the environmental performance of the packaging, and a clear packaging labelling scheme. A new On-Pack Recycling Label will advise ‘Recycle’ for packaging collected by 75% or more of UK local authorities and ‘Don’t Recycle’ for packaging either less likely to be collected or unable to recycled. From 2025, the rates paid for compliance will modulated in line with the environmental impact of the packaging. Companies obligated to pay charges will do so in the form of Packaging Recovery Notes and Exported Packaging Recover Notes, both of which are certificates used as evidence that a company has fulfilled its recycling obligation. The costs of these will be determined by supply and demand; both are expected to increase considerably to ensure the full net cost of recovery and reprocessing is covered. Nick Oates, Managing Director of NBG says: “We’re going through a steep learning curve at the moment regarding building materials’ packaging sustainability, and this is set to continue as new legislation is phased in. The introduction of the PPT and coming EPR legislation have opened up a wider conversation in the sector about why building materials packaging is important and the purpose that it serves. In short, the businesses best placed to mitigate the expected costs will be those most committed to using less and recyclable packaging. “The NBG Sustainability Project has been
created in light of the introduction of the PPT and ongoing plastic packaging reduction legislation. Its purpose is to help merchants and suppliers navigate through the changes to plastic packaging waste regulations and how associated costs might be mitigated.”
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